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VALIDATION REPORT

for the CDM Project Activity

8MW Cirompang Mini Hydro Power Plants


at Bungbulang, Garut, Indonesia

in
Indonesia

Report No. 01 997 9105067713


Version No. 02, 2012-06-01

Designated Operational Entity (DOE)


TV Rheinland (China) Ltd
Unit 707, AVIC Building, No. 10B, Central Road, East 3rd Ring Road,
Chaoyang District, Beijing 100022,
Peoples Republic of China.
Tel.: +86 10 65 66 66 60 (ext.169)
FAX: +86 1065 66 66 67
E-mail: ghg-doe@bj.chn.tuv.com

Validation Report

01 997 9105067713

I. Project description:
Project title:

8MW Cirompang Mini Hydro Power Plants


at Bungbulang, Garut, Indonesia

Report No.: 01 997 9105067713

Host Country:

Indonesia

Current revision No.: 02

Methodology:

AMS-I.D version 17

Date of current revision: 2012-06-01

Large Scale
Small Scale

Date of first issue: 2012-02-10

Annual average emission reductions (estimate):


GHG reducing
measure/technology:

The project activity utilizes hydropower technology for grid-connected renewable


power generation

Party

Indonesia (Host)
Kingdom of
Sweden

33,847 tCO2e/yr

Party considered a
project participant

Project Participants

PT Tirta Gemah Ripah (Public Entity)


Nordic Environment Finance Corporation NEFCO
in its capacity as Fund Manager to the NEFCO
Carbon Fund (NeCF) (Private Entity)

Contract
party

No
No

II. Validation Team:

Vietnam
Indonesia
China

1
N/A
1

Trainee TR

Expert to TR

Technical Reviewer

Trainee Auditor

Acting Tech. Expert

Technicla Expert

Team Member (Auditor)

Team leader

Mr. Truong Le Tien Dung


Mr. Ramaiyer Ramachandran
Ms. Danae Diaz

Local Expert

Role
Appointed for
Sectoral Scopes
(Technical Areas)

Acting Team Leader

Validation Team
Affiliation
TV
Rheinland

Full name

X
X
X

Validation Phases and Validation Status:


Desk Review
Follow up interviews
Corrective Actions / Clarifications Requested

Resolution of outstanding issues


Full Approval and Submission for Registration

Rejected

III. Validation Report:


Final approval
Date: 200X-XX-XX

Released

By: Mr. Praveen Urs

Rev No.: 01 ( 01/11/2011)

Distribution

No distribution without permission from the Client


or responsible organizational unit
Unrestricted distribution

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01 997 9105067713

Executive Summary Validation Opinion


The validation team assigned by the DOE (TV Rheinland (China) Ltd.), here after called TRC, is been
assigned by PT Tirta Gemah Ripah to perform the validation of their project 8MW Cirompang Mini Hydro
Power Plants at Bungbulang, Garut, Indonesia. The validation was performed on the basis of UNFCCC criteria
for the Clean Development Mechanism. The scope of the validation is defined as an independent and objective
review of the project design document, the projects baseline study and monitoring plan and other relevant
documents. The information in these documents is reviewed against CDM Validation and Verification Manual
(Version 01.2), Kyoto Protocol requirements, CDM Executive Board/UNFCCC rules.
The report is based on the assessment of the project design document undertaken through stakeholder
consultations, application of standard auditing techniques including but not limited to document reviews, site
visit, stakeholder interviews, review of the applicable methodology and its underlying formulae and
calculations.
Validation methodology and process
The validation has been performed as described in the VVM version 01.2 and constitutes the following steps:
- Publication of the PDD on the UNFCCC website (09th December 2011 to 07th January 2012)
- Desk review of the PDD and the relevant documents
- On-site assessment (04th to 06th January 2012)
- Issuance of Validation Report
Validation criteria
The following CDM requirements have been considered:
- Article 12 of the Kyoto Protocol,
- Modalities and procedures for CDM (Marrakech Accords)
- Subsequent decisions by the COP/MOP and CDM Executive Board
- Host country criteria
- Criteria given to provide for consistent project operations, monitoring and reporting.
The host part is Indonesia and the Annex I country is Kingdom of Sweden. Both parties fulfil the participation
criteria and have approved and authorized the project and the project participants. The DNA from Indonesia
confirms that the project assists in achieving sustainable development.
The project correctly applies the baseline and monitoring methodology AMS-I.D., version 17.0, Grid
connected renewable electricity generation.
The project results in reductions of CO2 emissions that are real, measurable and give long-term benefits to the
mitigation of climate change. It is demonstrated that the project is not a likely baseline scenario. Emission
reductions attributable to the project are hence additional to any that would occur in the absence of the project
activity.
The validation did not reveal any information that indicates that the project can be seen as a diversion of ODA
funding towards Indonesia.
The monitoring plan provides for the monitoring of the projects emission reductions. The monitoring
arrangements described in the monitoring plan are feasible within the project design and it is TRCs opinion that
the project participants are able to implement the monitoring plan.
By utilizing hydropower technology for grid-connected renewable power generation, the project activity will
result in reductions of greenhouse gas (GHG) emissions that are real, measurable and give long-term benefits to
the mitigation of climate change.
The total emission reductions from the project are estimated to be 338,470 t of CO2e over a 10-year crediting
period, averaging 33,847 t of CO2e annually. The emission reduction forecast has been checked and it is
deemed likely that the stated amount is achieved given the underlying assumptions do not alter.
The validation protocol describes a total of 25 findings which include:
16 Corrective Action Requests (CARs);
8 Clarification Requests (CLs);
1 Forward Action Requests (FARs); and all findings have been closed satisfactorily.

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TRC concludes that the CDM Project Activity 8MW Cirompang Mini Hydro Power Plants at Bungbulang,
Garut, Indonesia in Indonesia, as described in the PDD (version 2.1, dated 25 May 2012), meets all relevant
requirements of the UNFCCC for CDM project activities including article 12 of the Kyoto Protocol, the
modalities and procedures for CDM (Marrakesh Accords) and the subsequent decisions by the COP/MOP and
CDM Executive Board.
The selected baseline and monitoring methodologies (AMS-I.D., Version 17) are applicable to the project and
correctly applied. The TRC therefore requests the registration of the project as a CDM project activity with
UNFCCC.
Mr Truong Le Tien Dung (Team Leader)
(add signature)

Mr. Praveen Nagaraje Urs (DOE Manager)

TV Rheinland Vietnam Co. Ltd.


Ho Chi Minh City, 2012-XX-XX

TV Rheinland (China) Ltd.


Beijing, 2012-XX-XX

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Abbreviations
ACM
AMS
BM
BOD
CAR
CDM
CDM EB
CEF
CER
CH4
CL
CO2
CO2e
DNA
DoE
DOE
DR
EB
EIA
EPC
ER
ERPA
FAR
FSR
GHG
GWP
I
IDR
IETA
IPCC
IRR
kWh
LoA
MCF
MoV
MP
MW
MWh
NEFCO
NeCF
N2O
NGO
ODA
OM
PDD
PLN
PPA
QA/ QC
t
tCO2e
TRC
UNFCCC

Approved Consolidated Methodology


Approved Methodology for Small-scale CDM project activities
Build Margin
Board of Directors
Corrective Action Request
Clean Development Mechanism
CDM Executive Board
Carbon Emission Factor
Certified Emission Reduction
Methane
Request for Clarification
Carbon Dioxide
Carbon Dioxide Equivalent
Designated National Authority
Department of Environment
Designated Operational Entity
Document Review
Executive Board
Environmental Impact Assessment
Engineering, procerement and construction
Emission Reduction
Emission Reduction Purchase Agreement
Forward Action Request
Feasibility Study Report
Greenhouse Gases
Global Warming Potential
Interview
Indonesian Rupiah
International Emissions Trading Association
Intergovernmental Panel on Climate Change
Internal Rate of Return
kilo Watt hours
Letter of Approval
Methane Correction Factor
Means of Verification
Monitoring Plan
Mega Watt
Mega Watt Hours
Nordic Environment Finance Corporation
Nordic Environment Finance Corporation (NEFCO) in its capacity as Fund Manager to
the NEFCO Carbon Fund
Nitrous oxide
Non-Governmental Organization
Official Development Assistance
Operating Margin
Project Design Document
Perusahaan Listrik Negara, an Indonesian government-owned corporation which has a
monopoly on electricity distribution in Indonesia.
Power Purchase Agreement
Quality Assurance / Quality Control
Tonne
Tonnes of CO2 equivalents
TV Rheinland (China) Ltd.
United Nations Framework Convention on Climate Change

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TABLE OF CONTENTS
1
1.1
1.2
2
2.1
2.2
2.3
2.4
2.5
3
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10

Introduction
Objective
Scope
Methodology
Desk Review of the Project Design Documentation
Follow-up Interviews with Project Stakeholders
Resolution of Outstanding Issues
Internal Quality Control
Validation Team
Validation Findings
Approval and Participation
Project Design Document
Project Description
Baseline and Monitoring Methodology
Additionality
Monitoring
Sustainable Development
Environmental Impacts
Local Stakeholder Consultation
Comments by Parties, Stakeholders and NGOs

7
7
7
8
8
10
12
14
14
14
14
15
15
18
29
50
52
52
53
53

Appendix A: Validation Protocol


Appendix B: Certificates of Competence

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1. Introduction:
The organization PT Tirta Gemah Ripah has commissioned the DOE TV Rheinland (China) Ltd. to perform
a validation of the CDM Project Activity 8MW Cirompang Mini Hydro Power Plants at Bungbulang, Garut,
Indonesia in Indonesia (hereafter called the project). This report summarises the findings of the validation of
the project, performed on the basis of UNFCCC criteria for the CDM, as well as criteria given to provide for
consistent project operations, monitoring and reporting. The term UNFCCC criteria refers to Article 12 of the
Kyoto Protocol, the CDM modalities and procedures or the simplified modalities and procedures for small-scale
CDM project activities (as applicable) and the subsequent decisions by the CDM Executive Board.

1.1.

Objective

The purpose of a validation is to have an independent third party assess the project design. In particular, the
project's baseline, monitoring plan, and the projects compliance with relevant UNFCCC and host Party criteria
are validated in order to confirm that the project design, as documented, is sound and reasonable and meets the
identified criteria. Validation is a requirement for all CDM projects and is seen as necessary to provide
assurance to stakeholders of the quality of the project and its intended generation of certified emission
reductions (CERs).

1.2.

Scope

The validation scope is defined as an independent and objective review of the project design document (PDD).
The PDD is reviewed against the relevant criteria (see above) and decisions by the CDM Executive Board,
including the approved baseline and monitoring methodology. The validation team has, based on the
recommendations in the Validation and Verification Manual employed (latest version) a risk-based approach,
focusing on the identification of significant risks for project implementation and the generation of CERs.
The validation is not meant to provide any consulting towards the project participants. However, stated requests
for clarifications and/or corrective actions may have provided input for improvement of the project design.

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2. Methodology:
The validation consists of the following three phases:
I
A desk review of the project design documents
II
On-site visit and follow-up interviews with project stakeholders
III
The resolution of outstanding issues and the issuance of the final validation report and opinion.
The following sections outline each step in more detail.

2.1 Desk Review of the Project Design Documentation:


The following table outlines the documentation reviewed during the validation:
No.
/1/
/2/
/3/

/4/
/5/
/6/
/7/
/8/
/9/
/10/

/11/
/12/
/13/
/14/
/15/
/16/
/17/
/18/
/19/
/20/
/21/
/22/
/23/
/24/

/25/
/26/
/27/
/28/
No.
/29/
/30/
/31/
/32/
/33/
/34/

Item (related to CDM and its consideration & project starting dates)
PDD [for global stakeholder commenting] version 1.0, dated 25/10/2011
PDD [final version], version 2.1, dated 25/05/2012
Letter of Approval issued by DNA of Indonesia.
LoA from Annex 1 country
Signed Modalities of Communication.
Validation contract in between TUV Rheinland China Ltd. and the project participants
for this project activity.
Board decision to process the clearance for the 8 MW project activity, 23/06/2010
First PPA signed with PLN (2MW), dated 28/06/2010
Investment Approval from the Regent of Garut, dated 23/07/2010
Recommendation letter for land use permit, dated 26/07/2010
Recommendation letter document of Environmental Management Effort &
Environmental Monitoring Effort for Cirompang MHP 8 MW construction, dated
02/09/2010
Feasibility Study Report
Proof that FSR is prepared by qualified 3rd party institution - Third party letter
Engineering Third party Profile (For FSR)
Board resolution to undertake the project activity under CDM, 10/12/2010
CDM Advisory services agreement between PP and consultant, 02/03/2011
Notification to the DNA of Indonesia dated 08/03/2011
Notification to UNFCCC dated 09/03/2011
Acknowledgement of Notification to UNFCCC dated 09/03/2011
Attendance list & minute of stakeholder consultation meeting for the project activity on
15/04/2011
Published advertisement regarding the project activity on daily newspaper Radar
Garut on 4 April 2011
Stakeholder meeting presentation photos, dated 15/04/2011
MoU for EPC contract, dated 08/03/2011
Proof of starting date of CDM project activity. (04/08/2011)
EPC Contract
The Agreement between PT. TGR with GP3A Daerah Irigasi Cirompang (affiliation of
farmers using Cirompang water) regarding the Use of Dams, Irrigation Channels, and
Tunnels for the Cirompang Mini Hydro Power Investment Project, dated 11/08/2011
Approval of power purchase by PLN, dated 06/07/2011
PPA between PT. PLN (Persero) and PT. Tirta Gemah Ripah for Mini Hydro Power
Plant Total Capacity 8MW, dated 21/11/2011
Tech Spec Guarantee Performance Turbine-Generator from Jyoti
Key photo graphs of implementation of proposed project activity
Item (related to CDM financial)
Declaration of no diversion of ODA (e.g. no public funding in the project activity), dated
19/03/2012
Spread sheet (in *.xls format) for calculation of grid emission factor
Spread sheet (in *.xls format) for calculation of emission reductions
Spread sheet (in *.xls format) for financial analysis
Basis for the salvage value assumed
Compensation record for Land Acquisition

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/35/
No.
/36/
/37/
/38/
/39/
/40/
/41/
/42/
/43/
/44/
/45/
/46/
/47/
/48/

01 997 9105067713

List of Land Acquisition for Cirompang MHP


Others
First Electricity Business License for the Public Use, 15/06/2010
Land Use Permit, dated 07/03/2011
Business License (SIUP), dated 10/11/2009
Revised Business Licence (ITU), dated 10/11/2009
The letter issued by the Department of Mining and Energy, Directorate General of
Electricity and Energy Development, dated 20/06/2011
Permen ESDM Nomor 31 2009 dated 13 November 2009, Government of Indonesia
regulating the tariff rate in Indonesia
Government Regulation No.17, Year 2000, Clausal No.17,
Government Policy on income tax, year 2008
Water quality standard (PP. no 82 Year 2001 or West-Java Governor Decision no.
38/1991)
Noise Standards (kepMenLH No Kep-48/MenLH/11/1996)
Emission Factor published by DNA Indonesia
IPCC Default Value
Survey of CDM registered projects in Indonesia
Lending interest rate (%) Indonesia 2010

Background investigation and other referred documents/websites:


No.
Reference Document
/B1/
CDM Validation and Verification manual (Version 01.2), EB55
/B2/
Tool for the demonstration and assessment of additionality, Version 06.0.0, EB65 Annex 21
/B3/
INFORMATION NOTE ON THE IMPLEMENTATION OF E+/E- IN THE CONTEXT OF
PROJECTS ON THE AGENDA OF THE FIFTY-THIRD MEETING OF THE CDM
EXECUTIVE BOARD, Version 01.1
/B4/
Glossary of CDM terms, Version 06
/B5/
Attachment A of Appendix B of the Simplified Modalities and Procedures for small-scale
CDM project activities
/B6/
Attachment B to Appendix B of the Simplified Modalities and Procedures for small-scale
CDM project activities
/B7/
General Guidelines to SSC CDM methodologies, Version 17
/B8/
Non-binding best practice examples to demonstrate additionality for SSC project activities,
EB35
/B9/
GUIDELINES ON ASSESSMENT OF DEBUNDLING FOR SSC PROJECT ACTIVITIES
(Version 03)
/B10/
CDM-SSC-PDD - Project Design Document form for Small-Scale project activities, Version
03
http://cdm.unfccc.int/Reference/PDDs_Forms/PDDs/PDD_form02_v03.pdf
/B11/
GUIDELINES FOR COMPLETING THE SIMPLIFIED PROJECT DESIGN DOCUMENT
(CDM-SSC-PDD) AND THE FORM FOR PROPOSED NEW SMALL SCALE
METHODOLOGIES (CDM-SSC-NM) (Version 05)
http://cdm.unfccc.int/Reference/Guidclarif/pdd/PDD_guid02.pdf
/B12/
GUIDELINES ON THE ASSESSMENT OF INVESTMENT ANALYSIS (Version 05)
/B13/
GUIDELINES ON THE DEMONSTRATION AND ASSESSMENT OF PRIOR
CONSIDERATION OF THE CDM (Version 04)
/B14/
GUIDELINES FOR THE REPORTING AND VALIDATION OF PLANT LOAD FACTORS
(Version 01)
/B15/
Simplified modalities and procedures for small-scale clean development mechanism project
activities
/B16/
Web sites referred
www.ipcc.ch (for referring Emission factors)
http://www.noccop.org.vn/ (for validating the Host Country Approval)
http://www.evn.com.vn/ (for referring new renewable projects in Viet Nam)
http://cdm.unfccc.int (for referring to applicable latest guidelines)
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/B17/
/B18/
/B19/
/B20/

01 997 9105067713

Approved small scale methodology AMS-I.D.: Grid connected renewable electricity


generation, Version 17.0
Tool to calculate project or leakage CO2 emissions from fossil fuel combustion, Version 02
Tool to calculate the emission factor for an electricity system, Version 02.2.1
Appendix C of the Simplified Modalities and Procedures for Small-Scale CDM project
activities

2.2. Follow-up Interviews with Project Stakeholders:


TV Rheinland validation team carried out an on-site visit dated from 2012-01-04 to 2012-01-05 and
performed interviews with the project representatives and stakeholders.

/I01/

Date
2012-0104

Name
Mr. Ayatullah Mardiansyah
(Business Development)

Organization
Emergent
Ventures Int

Ms. Pradeeth Tyagi (Senior


Consultant)
Ms. R. Sivasankari (Consultant)

Mr. Aprian E.R


(Technical Division)

PT Tirta Gemah
Ripah

Mr. Yulianto
(Project Director)
Mr, Agung S
(Expert)
Mr. Ir. Imam Rirvanto
(C.E.O.)

/I02/

2012-0105

Mr. Ayatullah Mardiansyah


(Business Development)

Emergent
Ventures Int

Ms. R. Sivasankari (Consultant)


Mr. Sutomo
Mr. Agung S (Expert)
Rev No.: 01 ( 01/11/2011)

PT Tirta Gemah
Ripah

Topic
Confirmation of project
activity and project title
Confirmation of project
participants
Board of Directors
approvals
Project Funding
Project agreement
Modalities of
Communications
LoAs
Organisation chart
Technology
Baseline
Additionality
Monitoring Plan
EIA Compliance
Quality Assurance
Project lifespan
Operating procedures
/work instructions
Calibration and Training
Archiving of data
Financial calculations
PDD
Calculation of grid
emission factor and
emission reductions

Plant address
EIA Compliance
Stakeholder meeting
Land use permit
Technology
Baseline
Operating procedures
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/work instructions

Mr. Hendarwan
Mr. Aprian E. R. (Technical
Division)
Mr. Sobar
Mr. Andun D S
Mr. M. Warlud S
Mr. Indra W. Pasaribu
Mr. Asep Zaenal A.

GP3A

Talang Sulaeman

P3A

Adang

RW 16

Suparman (Community head)

DSA

Jaka

Tokoh
Masyarakat
(Society Figure)

Solehudin
Umen
A Cang Rahmat

Yamin Maulud

Karyawan
(Employee )
PT Hutama
Karya
Compensated
representative

Aas Ruhyan

Ketua GP 3A

Agus N

Koramil 21

Haris Co. An

Kapolsek
(Police Chief)

Hj. Uum S.

Camat (Head of
Subdistrict)
Staf PPAT
(Public Notary)

Fliri Randewo
Heruza W.

Henhen S

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2.3 Resolution of Outstanding Issues:


The objective of this phase of the validation is to resolve any outstanding issues which need be clarified prior to
TV Rheinlands positive conclusion on the project design. In order to ensure transparency a validation
protocol is customised for the project. The protocol shows in transparent manner criteria (requirements), means
of verification and the results from validating the identified criteria. The validation protocol serves the following
purposes:
It organises, details and clarifies the requirements a CDM project is expected to meet;
It ensures a transparent validation process where the validator will document how a particular
requirement has been validated and the result of the validation.
The validation protocol consists of three tables. The different columns in these tables are described in the figure
below. The completed validation protocol for this project is enclosed in Appendix A to this report.
Findings established during the validation can either be seen as a non-fulfilment of CDM criteria or where a risk
to the fulfilment of project objectives is identified. Corrective action requests (CAR) are issued, where:
Mistakes have been made with a direct influence on project results;
CDM and/or methodology specific requirements have not been met; or
There is a risk that the project would not be accepted as a CDM project or that emission reductions will
not be certified.
A request for clarification (CL) may be used where additional information is needed to fully clarify an issue.
A forward action request (FAR) is raised during validation to highlight issues related to project implementation
that require review during the first verification of the project activity. FARs shall not relate to the CDM
requirements for registration.

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Validation Protocol Table 1: Validation requirements


Checklist Question
Reference
Means of
verification
(MoV)
The various UNFCCC
Gives
Explains how
requirements as
reference to conformance with
specified in the VVM
documents
the checklist
are linked to checklist
where the
question is
questions the project
answer to
investigated.
should meet. The
the checklist Examples of means
checklist is organised in question or
of verification are
different sections,
item is
document review
following the logic of
found.
(DR) or interview
the VVM.
(I). N/A means not
applicable.

Comment

Draft and/or Final


Conclusion

The section is
used to elaborate
and discuss the
checklist question
and/or the
conformance to
the question. It is
further used to
explain the
conclusions
reached.

This is either acceptable


based on evidence
provided (OK), or a
corrective action request
(CAR) due to noncompliance with the
checklist question (See
below). A request for
clarification (CL) is used
when the validation team
has identified a need for
further clarification.

Validation Protocol Table 2: List of Requests for Corrective Action (CAR) and Clarification (CL)
Draft report
Ref. to checklist
Summary of project
Validation conclusion
clarifications and
question in table 2
owner response
corrective action
requests
If the conclusions from
Reference to the
The responses given by
This section should
the draft Validation are
checklist question
the project participants
summarise the validation
either a CAR or a CL,
number in Table 2
during the
teams responses and final
these should be listed in
where the CAR or CL
communications with
conclusions. The conclusions
this section.
is explained.
the validation team
should also be included in
should be summarised in Table 2, under Final
this section.
Conclusion.
Table 3:

List of forward action requests (FARs)


Summary of project
FAR number
Reference
owner response
Forward action request
Reference to the
The responses given by
the project participants
(FAR) to be raised during checklist question
validation to highlight
number in Table 2
during the
issues related
where the CAR or CL
communications with
to project implementation is explained.
the validation team
that require review during
should be summarised in
the first verification of the
this section.
project activity. FARs
shall not relate to the
CDM requirements for
registration.

Validation team conclusion


This section should
summarise the validation
teams responses and final
conclusions. The conclusions
should also be included in
Table 2, under Final
Conclusion.

Figure 1. Validation protocol tables

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2.4 Internal Quality Control:


The draft validation report including the initial validation findings underwent a technical review before being
submitted to the project participants. The final validation report underwent a technical review by a qualified
independent reviewer before requesting registration of the project activity. The technical review was performed
by a technical reviewer qualified in accordance with TV Rheinlands qualification scheme for CDM validation
and verification that meets the criteria of EB guidelines for qualification.

2.5 Validation Team:

1
N/A
1

X
X

Technical Reviewer

Reporting Support

Site Visit + Interview

Desk review

X X
X

Technicla Expert Input

Vietnam
Indonesia
China

Type of Involvement
Appointed for Sectoral
Scopes (Technical
Areas)

Report and protocol


Writing

Mr. Truong Le Tien Dung


Mr. Ramaiyer Ramachandran
Ms. Danae Diaz

Validation Team
Affiliation
TV Rheinland

Supervising the work

Full name

3. Validation Findings:
The findings of the validation are stated in the following sections. The validation criteria (requirements), the
means of verification and the results from validating the identified criteria are documented in more detail in the
validation protocol in Appendix A.
The final validation findings relate to the project design as documented and described in the revised and
resubmitted project design documentation.

3.1 Approval and Participation


According to the PDD, the project is a CDM project which involves two project participants: PT Tirta Gemah
Ripah from the host party, Indonesia; and Nordic Environment Finance Corporation NEFCO in its capacity as
Fund Manager to the NEFCO Carbon Fund (NeCF) from Kingdom of Sweden (Annex I party).
PT Tirta Gemah Ripah (TGR) is a local investment based entity, which was established on 10th November 2009
/38/, /39/. TGR is the project owner of the project activity. The host party, Indonesia meets all relevant
participation requirements in CDM.
The Letter of Approval (LoA) issued by the DNA of Republic of Indonesia, i.e. Executive Chair of National
Council on Climate Change as the Chairman of the National Committee on CDM of the Republic of Indonesia,
for authorizing PT Tirta Gemah Ripah as voluntary project participants was validated and it confirms that the
project contributes to Indonesias sustainable development /3/.
The Letter of Approval (LoA) from the DNA of Kingdom of Sweden (Annex I party) is not yet received for
confirming the voluntary participation of RWE Power AG, represented by RWE Service GmbH.
The below table summarizes the project participants and parties involved. The authenticity of the letters of
approval has been validated by TV Rheinland validation team.
These LoA(s) are therefore regarded as valid and meeting the requirements.

Rev No.: 01 ( 01/11/2011)

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01 997 9105067713

Project participants

PT Tirta Gemah Ripah

Nordic Environment Finance


Corporation NEFCO in its capacity
as Fund Manager to the NEFCO
Carbon Fund (NeCF)

Parties involved

Indonesia (Host Party)

Kingdom of Sweden
(Annex I party)

APPROVAL

The National Committee on CDM


of the Republic of Indonesia

LoA received

Yes

No

Date of LoA

6 March 2012

To be determined

B076/KNMPB/03/2012

To be determined

The National Committee on CDM


of the Republic of Indonesia
(Public Organization)

To be determined

Yes.
Confirmation of Letter Head and
signature of Executive Chair of
National Council on Climate
Change as the Chairman of the
National Committee on CDM of the
Republic of Indonesia

To be determined

Yes

To be determined

Yes

Yes

Yes

To be determined

No indication

To be determined

Yes

To be determined

Reference to document
LoA received from

Validation of authenticity

Validity of LoA
PARTICIPATION
Party is party to Kyoto
Protocol
Voluntary participation
Diversion of official
development aid towards host
country
Project contribution to SD

See CAR 02 in Appendix A, Table 2


Validation of ODA
The validation did not reveal any evidence that this project activity can be seen as a diversion of ODA. This has
been confirmed through interview with the project participant /I01/. The project will be fully funded by TGR.
The project participant has provided supporting document /29/ to substantiate no public funding in the project
activity.

3.2 Project Design Document:


The Project Design Document is based on the currently valid PDD template and is completed in accordance
with the applicable guidance document /B10/, /B11/.

3.3 Project Description:


The proposed project 8MW Cirompang Mini Hydro Power Plants at Bungbulang is a run-of-river
hydroelectric power plant being developed by PT. Tirta Gemah Ripah (TGR) in Garut district, West Java
Province, Indonesia. According to the PDD, the geographical coordinates of the dam and powerhouse are
indicated as below:
Rev No.: 01 ( 01/11/2011)

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Validation Report
Power Plant
Dam
Power house

01 997 9105067713
North Latitude
-7.4505
-7.4762

East Longitude
+107.6093
+107.6122

The project involves construction of a new hydropower plant at an existing dam which mainly consists of a
companion channel at Cirompang River, a diversion tunnel, and a hydropower house /11/. The total installed
capacity of the hydroelectric plant is 8MW.
The project consists of 4 units of water turbines with the unit capacity of 2 MW /11, page 42/, /27/. Thus the
total installed capacity of the hydropower plant is 8 MW. An EPC was signed with PT. Hutama Karya on 4
August 2011 to construct the whole project including engineering, planning, project design, procurement,
constructing, testing, commissioning and interconnection to the grid of PLN /23/. The key equipments of the
project are imported from India with foreign technology transfer (supplier: Jyoti ltd. Vadodara) /27/. In addition,
the validation team also validated the Investment Approval Number: 503/1564/KPM from the Regent of Garut
/8/, approval of UKL-UPL (Environment Analysis) on Cirompang Mini hydro power plant /10/ from
Environment management Division of Garut Regency, PPA between PT. PLN (Persero) and PT. Tirta Gemah
Ripah on 21 November 2011 /26/ to confirm the installed capacity of 8 MW.
The load factor is indicated in FSR as 68.77%. This Plant Load Factor is calculated by the qualified engineering
consultation company PT. Chandripa Tirta Energia /13/ that designed the FSR of the proposed project /11/. The
value of Plant Load Factor of 68.77% is also confirmed by PT. Chandripa Tirta Energia via a separate
confirmation letter /12/, and is considered acceptable as per Guidelines for the Reporting and Validation of
Plant Load Factors /B14/.
The project activity is constructed at an existing reservoir and dam on River Cirompang. The project participant
has signed an agreement with GP3A (Association of farmers) /24/ for using the water from river Cirompang for
power generation. There will be no modification done by the project owner in existing reservoir and dam for use
of water for power generation. Thus the project activity is implemented in an existing reservoir with no change
in the volume of reservoir.
The annual net electricity generation from the project is 47,471 MWh. The electricity generated from the project
activity is expected to substitute the power supply from the Jamali national power grid which is mainly
composed of fossil fuel-fired power generation. The expected GHG emission reductions of the project activity
are 33,847 tCO2e annually during the 10-year fixed crediting period.
According to the project participant, the grid connection was agreed by PLN via the first power purchase
agreement (PPA) signed with PLN (2MW) on 28th June 2010 /7/. According to the PDD, the project will supply
electricity to the national grid via 20 kV transmission line /11, page 40/.
The CER buyer NEFCO has signed the CDM Emission Reductions Purchase Agreement with TGR.
During the on-site visit, the construction of companion channel is in progress. The construction of powerhouse
has not yet started. The management representative of the project participant stated that the project construction
is anticipated to be completed by March 2013. It was also understood that TGR will be responsible for
organizing the necessary training for the operation, maintenance and monitoring procedures of CDM
implementation. He stated that since the project was still in the preliminary stage, the technical training and
CDM trainings were not yet started. The CDM trainings will be carried out by the manufacturer and CDM
consultancy company respectively before the project commissioning. The details about the emergency
procedure and training requirements for monitoring are provided in section B.7.2 of the revised PDD. Moreover,
the project participant stated that the CDM training will be conducted prior to the start of the crediting period.
According to the PDD, a fixed crediting period of 10 years is selected. The starting date of project activity,
which was based on the date of the EPC contract, was on 04th August 2011 /23/.

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01 997 9105067713

It revealed that the project participant has commissioned PT. Chandripa Tirta Energia, a qualified engineering
consultation company, to conduct FSR in November 2010. The project participant confirmed that no real action
was taken to implement the project prior to 04 August 2011 (project starting date as indicated in the web-hosted
PDD). The detailed timeline for the project activity since 2010 till the real action taken as the starting date of
project activity (i.e. 04 August 2011) has been updated in section B.5. of the final PDD. From timeline as well
as supporting documents /6/, /7/, /8/, /9/, /10/, /11/, /14/, /15/, /16/, /17/, /19/, /23, /34/ and /35/, it is substantiated
that the project participant has proceeded for approval from authority for investment into the proposed project
since 2010, and negotiated for compensation for land acquisition since January 2011 till April 2012. It can be
concluded that there was no real action of project activity before 04 August 2011. Thus, the validation team is
able to confirm that 04 August 2011, i.e. the signed date of the EPC contract, is the earliest date among these
real actions of the project.
The starting date of the first crediting period will be expected to be started on 1st March 2013. According to the
PDD section C.1.2., the expected operational lifetime of equipment will be 20 years based on the information of
FSR. With full operational time of 365 days per year and production hour of 24 hour per day, the annual full
operating time is 8,760 hours. This is considered appropriate according to the requirement of Tool to determine
the remaining lifetime of equipment (EB 50 Annex 15), in which the project lifetime for hydro turbines is
150,000 hours, i.e. (150,000/8,760) years ~ 17 years. It is noted that the plant load factor of the project activity
is 68.77%. That means the project activity will not always operate in full capacity due to the fluctuation of
hydro resource. If the plant load factor is taken into account, the project lifetime for hydro turbines will be 24.9
years (150,000 hours/8,760/68.77%). Thus, the value of operational lifetime of equipment of 20 years is in the
range and acceptable.
Starting date of project
04 August 2011

Expected project operational


lifetime
20 years.

Crediting period
10 years starting on 01 March 2013

Herewith, the Validation Team summarizes major changes between webhosted PDD and final version of PDD
for submission as follows:
Subject

Webhosted PDD

PDD ( project title /


participants
involved/ project
location /project
technology etc)

Project technology:
It was described in the PDD that the
project has no reservoir.

Methodologies and
tools applied ( scope
and version
numbers)
CER calculations
(formula applied/
amount of emission
reduction)

N/A

Project Emission:
The webhosted PDD does not explain
clearly whether the project activity
would use diesel generator in the event
of emergency, or shut down for
maintenance.

Rev No.: 01 ( 01/11/2011)

Correction to webhosted PDD in the final


PDD submission for registration with DOE
assessment and reason of acceptance.
Project technology:
The project activity is run-off river
hydropower which is implemented in the
existing reservoir and dam. The project
participant has received approval to use the
water for power generation. There will be no
modification done by project participant in
existing reservoir for use of water for power
generation.
N/A

Project Emission:
Its described in section A.4.2 of the revised
PDD that diesel generators will be used in
case of emergency. The project emission from
diesel generator used in emergency purposes
will be monitored and calculated by the Tool
to calculate project or leakage CO2 emission
from fossil fuel consumption, Version 02, as
per sections B.6.1 and B.7.1 of the final PDD.
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Validation Report

Additionality:
(benchmark / input
values/analysis
type/project start
date/IRR or NPV
values etc)
Monitoring
(parameters /
frequency )

Crediting period
( type / start date)

01 997 9105067713

Benchmark:
The benchmark (WACC) was calculated
as 21.3%
IRR value:
The IRR value (without CDM) was
calculated as 14.13%
Monitoring Project Emission:
The project emission from diesel
generator used in emergency purposes
was not yet considered and monitored.

N/A

The Project Emissions (PEy) is estimated as 0


tCO2e per year for Ex- ante emissions
calculation.
Benchmark::
The benchmark (WACC) was re-calculated as
22.7%
IRR value:
The IRR value (without CDM) was calculated
as 15.06%
Monitoring Project Emission:
Parameters for calculation of the project
emission from diesel generator used in
emergency purposes was considered and
monitored as per sections B.7.1 of the final
PDD.
N/A

Please refer to Appendix A of this report for details of each change between webhosted PDD and the final PDD
for submission. The Validation Team has carried out the validation process based on the Webhosted PDD and
raised CARs/CLs against the project by issuing the validation protocol.
With the updated information and corrections done on final PDD, the PP has addressed all the CARs /CLs that
were raised by the Validation Team.
It is concluded that the Validation Team has reviewed the project in line with the VVM (version 01.2) and all the
evidence, corrections, justifications and updating done on the final PDD with respect to CARs /CLs raised are
accepted and closed by the Validation Team, issuing the positive validation opinion for project registration. FAR
are further issued to the DOE verification team to check the implementation and operational completeness during
the first verification.
TV Rheinland validation team considers the project description of the project contained in the PDD to be
complete and accurate. The PDD complies with the relevant methodology, tools, forms and guidance at the time
of PDD submission for registration.

3.4 Baseline and Monitoring Methodology:


3.4.1 Applicability of the selected methodology to the project activity
The project applies the approved baseline and monitoring methodology AMS-I.D/Version 17 Grid connected
renewable electricity generation, which also uses the build margin (BM) and operating margin (OM) approach
in the Tool to calculate the emission factor for an electricity system Version 02.2.1, and makes reference to
the Appendix B of the Simplified Modalities and Procedures for Small-scale CDM project activities.
Applicability criteria for the baseline methodology are assessed by the validation team by means of document
review and interview. It is agreed in the validation teams opinion that the project activity fully met the criteria
as described below:
Applicability criteria of the methodology AMS-I.D, Version Criteria
17
fulfilled
Yes
This methodology comprises renewable energy generation
No
units, such as photovoltaic, hydro, tidal/wave, wind,
geothermal and renewable biomass:
a) Supplying electricity to a national or a
regional grid; or
b) Supplying electricity to an identified
consumer facility via national/regional grid
Rev No.: 01 ( 01/11/2011)

Determination by the validation


team

The project activity involves the


installation of a new 8MW hydro
hydroelectric project that will
supply electricity to Jamali Grid,
an electricity distribution system
supplied by fossil-fuel fired
generating units. This is confirmed
by validation of the Investment
Approval Number: 503/1564/KPM
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01 997 9105067713

Applicability criteria of the methodology AMS-I.D, Version Criteria


17
fulfilled
through a contractual arrangement such as
wheeling.

Illustration of respective situations under which each of the


methodology (i.e. AMS-I.D, AMS-I.F and AMS-I.A) applies
is included in Table 2.
Project type
AMS- AMS- AMSI.A
I.D
I.F
1 Project supplies electricity to

a national/regional grid
2 Project displaces grid

electricity consumption (e.g.


grid import) and/or captive
fossil fuel electricity
generation at the user end
(excess electricity may be
supplied to a grid)
3 Project supplies electricity to

an identified consumer
facility via national/regional
grid (through a contractual
arrangement such as
wheeling)
4 Project supplies electricity to

a mini grid system where in


the baseline all generators
use exclusively fuel oil
and/or diesel fuel
5 Project supplies electricity to
household users (included in
the project boundary) located
in off grid areas
This methodology is applicable to project activities that (a)
install a new power plant at a site where there was no
renewable energy power plant operating prior to the
implementation of the project activity (Greenfield plant); (b)
involve a capacity addition; (c) involve a retrofit of (an)
existing plant(s); or (d) involve a replacement of (an) existing
plant(s).

Rev No.: 01 ( 01/11/2011)

Yes
No

Yes
No

Determination by the validation


team
from the Regent of Garut /8/,
approval
of
UKL-UPL
(Environment
Analysis)
on
Cirompang Mini hydro power
plant /10/ from Environment
management Division of Garut
Regency, PPA between PT. PLN
(Persero) and PT. Tirta Gemah
Ripah on 21 November 2011 /26/.
The project activity is a newly
built hydropower plant to generate
electricity supplied to the Jamali
Grid, in which the geographic and
system boundaries for the Jamali
Grid can be clearly identified.
Jamali grid is owned by PT
Perusahaan Listrik Negara (PLN) ,
a state owned electricity company
of Indonesia. Thus the project
complies with the applicability
criteria of AMS I.D. This is
confirmed by validation of PPA
between PT. PLN (Persero) and
PT. Tirta Gemah Ripah on 21
November 2011 /26/.

The project activity shall install a


new hydropower plant at a site
where there was no renewable
energy power plant operating prior
to the implementation of the
project activity (Greenfield plant).
Thus the Project Activity complies
with the applicability criteria (a).
This is confirmed during the on
site visit and interview with the
project owner /I01/ and review of
the Investment Approval Number:
503/1564/KPM from the Regent of
Garut /8/, approval of UKL-UPL
(Environment
Analysis)
on
Cirompang Mini hydro power
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01 997 9105067713

Applicability criteria of the methodology AMS-I.D, Version Criteria


17
fulfilled

Hydro power plants with reservoirs that satisfy at least one of


the following conditions are eligible to apply this
methodology:

The project activity is implemented in an existing


reservoir with no change in the volume of reservoir;

The project activity is implemented in an existing


reservoir, where the volume of reservoir is increased
and the power density of the project activity, as per
definitions given in the Project Emissions section, is
greater than 4 W/m2;

The project activity results in new reservoirs and the


power density of the power plant, as per definitions
given in the Project Emissions section, is greater than
4 W/m2.

If the new unit has both renewable and non-renewable


components (e.g., a wind/diesel unit), the eligibility limit of
15 MW for a small-scale CDM project activity applies only to
the renewable component. If the new unit co-fires fossil fuel,
the capacity of the entire unit shall not exceed the limit of
15 MW.

Combined heat and power (co-generation) systems are not


eligible under this category.

In the case of project activities that involve the addition of


renewable energy generation units at an existing renewable
power generation facility, the added capacity of the units
added by the project should be lower than 15 MW and should
be physically distinct from the existing units.

Rev No.: 01 ( 01/11/2011)

Yes
No

Yes
No

Yes
No

Yes
No

Determination by the validation


team
plant /10/ from Environment
management Division of Garut
Regency, PPA between PT. PLN
(Persero) and PT. Tirta Gemah
Ripah on 21 November 2011 /26/.
The
project
activity
is
implemented at an existing
reservoir, and the project would
not cause change in the volume of
reservoir. Hence, this condition is
applicable to the project activity.
This is confirmed during the on
site visit and interview with the
project owner /I01/ and review of
approval
of
UKL-UPL
(Environment
Analysis)
on
Cirompang Mini hydro power
plant /10/ from Environment
management Division of Garut
Regency, and Agreement between
the project participant with GP3A
DI Cirompang /24/ dated 11th
August 2011 for using the water
from river Cirompang for power
generation.
The project activity has only
renewable component (Hydro)
with installed capacity of 15 MW.
Hence, this condition is not
applicable to the project activity.
This is confirmed by validation of
the Investment Approval Number:
503/1564/KPM from the Regent of
Garut /8/.
The project activity has only
renewable component (Hydro).
The project activity does not
involve heat recovery and co-fired
fossil fuel, thus it is not a
combined heat and power (cogeneration) system.. This is
confirmed by validation of the
Investment Approval Number:
503/1564/KPM from the Regent of
Garut /8/.
The project activity involves the
installation of a new 8MW hydro
hydroelectric project. No addition
of renewable energy generation
units is involved. The total
installed capacity of the project
activity does not exceed the
threshold of 15MW for small-scale
CDM project. This is confirmed by
validation of the Investment
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01 997 9105067713

Applicability criteria of the methodology AMS-I.D, Version Criteria


17
fulfilled

In the case of retrofit or replacement, to qualify as a smallscale project, the total output of the retrofitted or replacement
unit shall not exceed the limit of 15 MW.

Yes
No

Determination by the validation


team
Approval Number: 503/1564/KPM
from the Regent of Garut /8/.
The project activity does not seek
to retrofit or modify an existing
facility. This is confirmed by
validation of the Investment
Approval Number: 503/1564/KPM
from the Regent of Garut /8/.

Thus the validation team considers that the applicability criteria for the baseline methodology has been correctly
applied for the project activity.
According to Guidelines on assessment of debundling for SSC project activities (Version 03), the validation
team has validated that the project is not deemed to be a debundled component of a large scale project. The
validation criteria are stated below:
According to the information from UNFCCC, there is no registered small-scale CDM project activity or any
application to register another CDM small-scale CDM project activity by the project participants, i.e. TGR
within the previous two years with the same project category and technology within 1 km of the project
boundary of the project activity. As stated by the project developer, the project activity obtains the diverted
water for power generation from the existing reservoir on Cirompang River. This is the only one hydro power
plant on this river. The project participant also reported that this is the first hydropower project invested by
TGR. Therefore, the project activity is not deemed to be a debundled component of a large project activity.
The assessment of the projects compliance with the applicability criteria of the methodology AMS-I.D, Version
17 as documented in the PDD part B and annex 3, which are evaluated in detail under the validation protocol in
Appendix A to this report based from the webhosted PDD.

3.4.2 Project Boundary:


During the on-site visit, the project construction is under progress. The project participant stated that the project
construction was started by August 2011 /23/. According to approved methodology AMS-I.D./Version 17, the
spatial extent of the project boundary includes the power plants that are physically connected through
transmission and distribution lines to the project activity, i.e. power plants to the Jamali Grid. There is no
significant transmission constraint between the power plants of the Jamali Grid. The PPA signed with PLN, the
owner of Jamali Grid, on 28th June 2010 /7/, and amended on 21st November 2011 /26, allows the connection
from the power plant to Jamali Grid.
The geographical and physical project boundary of the project activity was determined by the validation team
during the on-site assessment. The coordinates were correctly documented in the PDD. The sources and sinks of
greenhouse gas identified in the PDD are deemed to be appropriate. The coordinates were confirmed by the
validation team through Global Positioning System (GPS).
The system boundary and the selected sources and gases are justified transparently and are presented as below:.
Emissions
Baseline emissions

GHGs involved
CO2

Project emissions

CO2

Rev No.: 01 ( 01/11/2011)

Description
Major emission source
Minor emission source
Diesel generators will be used in case of
emergency.
According to VVM, if this emission source
contributes more than 1% of the expected average
annual emission reductions, it will be accounted
for as project emissions.

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Leakage

01 997 9105067713
CH4
(from the
reservoir)

Major emission source


As per AMS-I.D./Version 17, the project missions
are negligible as there is no new reservoir for the
project activity. The project activity is
implemented in the existing reservoir, owned by
Garut Regency and would not cause change in the
volume of reservoir.

--

Since the project activity is a new hydropower


project and the energy generating equipment is not
transferred from another activity, leakage is thus
considered negligible as per AMS-I.D./Version 17.

In summary, the project boundary was correctly identified in accordance with the methodology AMS-I.D.,
Version 17. All greenhouse gas emissions occurring within the proposed project activity boundary as a result of
the implementation of the proposed CDM project activity have been appropriately addressed in the PDD.
The identified project boundary and selected sources of emissions are justified for the project activity. The
validation of the project activity did not reveal other greenhouse gas emissions occurring within the proposed
CDM project activity boundary as a result of the implementation of the proposed project activity which are
expected to contribute more than 1% of the overall expected average annual emission reduction, with respect to
the methodology applied.

3.4.3 Baseline Identification:


The project activity is the installation of a new grid-connected renewable hydropower plant. According to the
applied methodology AMS-I.D./Version 17, the baseline scenario is prescribed as:
The baseline scenario is the electricity delivered to the grid by the project activity that otherwise would have
been generated by the operation of grid-connected power plants and by the addition of new generation sources.
The baseline emissions are the product of electrical energy baseline EGBL,y expressed in MWh of electricity
produced by the renewable generating unit multiplied by an emission factor, which can be calculated in a
transparent and conservative manner as a combined margin (CM) according to the procedures prescribed in the
latest Tool to calculate the emission factor for an electricity system.
The validation team has checked the following in accordance with the latest version of CDM Validation and
Verification Manual, and the results are tabulated as follows.
The details can be referred to Appendix A.
The approved baseline methodology applicable to the
project
explicit criteria
implicit criteria (e.g. available scenarios,
applicability of formulas for BE/PE/LE
calculations)
PDD includes all assumptions and data used by
project participants
All the references and documents used are relevant
for establishing the baseline scenario
All the references and documents used are correctly
quoted and conservatively interpreted in the PDD
All relevant policies / regulations considered are
listed in the PDD

Rev No.: 01 ( 01/11/2011)

Yes
No

Yes
No
Yes
No
Yes
No
Yes
No

As per clause 10 of AMS-I.D./Version 17,


the baseline scenario is prescribed. Please
see details in Section 3.4.1

As per AMS-I.D./Version 17, all


assumptions and data used by the project
participant is included in the PDD.
As per AMS-I.D./Version 17, all the
references and documents used are relevant
for establishing the baseline scenario
As per AMS-I.D./Version 17, all references
used are correctly quoted and
conservatively interpreted in the PDD.
As per AMS-I.D./Version 17, all relevant
policies/regulations are considered in the
PDD.
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01 997 9105067713

Identified potential baseline scenarios reasonably


represent what would/could occur in the absence of
the proposed project activity
The baseline scenario selection is appropriate and
determined according to the methodology
The approved methodology used is applicable to the
identified baseline scenario

Yes
No

As per AMS-I.D./Version 17, since this is a


new grid connected power plant, the
baseline scenario is prescribed.
As per clause 10 of AMS-I.D./Version 17,
the baseline scenario is prescribed.

Yes
No

As per clause 10 of AMS-I.D./Version 17,


the baseline scenario is prescribed.

Yes
No

The approved baseline methodology has been correctly applied to identify a realistic and credible baseline
scenarios, and the identified baseline scenario most reasonably represents what would occur in the absence of
the proposed CDM project activity.
All the assumption and data used by the project participants are listed in the PDD and/or supporting documents.
All documentation relevant for establishing the baseline scenario and correctly quoted and interpreted in the
PDD. Assumptions and data used in the identification of the baseline scenario are justified appropriately,
supported by evidence and can be deemed reasonable. Relevant national and/or sectoral policies and
circumstances are considered and listed in the PDD.

3.4.4 GHG Emission Reductions:


The GHG emission reduction calculations are transparently documented in the ER calculation spreadsheet /31/.
The GHG emissions calculations are documented and assumptions regarding expected amount of electricity
generated have been used to forecast the emission reductions.
According to the selected methodology AMS-I.D., Version 17 for grid-connected renewable electricity
generation and the latest Tool to calculate the emission factor for an electricity system, Version 02.2.1, the
emission reductions (ERy) by the project during the crediting period is the difference between the baseline
emissions (BEy), project emissions (PEy) and leakage emissions (LEy), which is expressed as follows:
ERy = BEy PEy LEy
The assumptions, formulas, parameters and values used in the context of the project activity are complete,
accurate, transparent and conservative.
Assumptions made and data used for estimating the ex-ante GHG emissions reductions have been assessed by
the validation team as follows:
Parameter

Total
capacity

Value

installed 8 MW

Total number of 8,760 hours


hours of operation
annually
Plant load factor

68.77%

Rev No.: 01 ( 01/11/2011)

Basis

Validation team assessment

For Baseline Emission


Feasibility
Study This is confirmed by validation of the
Report /11/
Investment Approval Number: 503/1564/KPM
from the Regent of Garut /8/, approval of UKLUPL (Environment Analysis) on Cirompang
Mini hydro power plant /10/ from Environment
management Division of Garut Regency, PPA
between PT. PLN (Persero) and PT. Tirta
Gemah Ripah on 21 November 2011 /26/. The
validation team concluded it is acceptable.
Feasibility
Study It is assumed the project activity will be
Report /11/
operated 365 days per years, 24 hours per day.
Thus the value of 8,760 (=365daysx24hours) is
acceptable.
Feasibility
Study The validation team also conducted survey of
Report /11/
other CDM registered projects (small-scale
projects, employing same methodology, AMSI.D., located in Indonesia) /47/ & found that
plant load factor value for the project activity
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01 997 9105067713
lies well within this range.
Remarks: The validation team has surveyed
IGES CDM Investment Analysis Database &
CDM Pipeline list in http://cd4cdm.org/
website as of 30 May 2012 & only 4 registered
small scale projects within Indonesia.
Ref

1.5%

Feasibility
Report /11/

Quantity of net
electricity supplied
to the grid as a result
of
the
implementation of
the CDM project
activity in year y
(MWh), EGy
CO2 emission factor
of the grid in year y
(t CO2/MWh)

47,471
MWh/year

Feasibility
Report /11/

0.713
tCO2e/MWh

Report
on
Grid
emission factor of
published by DNA
/30/, /45/

Rev No.: 01 ( 01/11/2011)

Reg. date

Ranteballa
Small-Scale
80.00 10 Dec.
3474
%
2010
Hydroelectric
Power Project
10 MW
Tangka/Manip
50.22 26 Jan.
4021
i Hydro
%
2011
Electric Power
Plant
Parluasan
80.00 12 Feb.
4106
Hydro Electric
%
2011
Power Plant
Silau-2 small
hydro power
plant in North 65.40 07 Oct.
3580
Sumatera
%
2011
Province,
Indonesia
Thus the Plant Load Factor value of the project
activity is acceptable.
Study The validation team confirmed the value to be
correct and acceptable. Moreover the net
electricity supplied to the grid will be
monitored during the whole crediting period.
Study This is a monitoring parameter which will be
monitored during the whole crediting period.
With above data, the validation team can
calculate and confirm the value of 47,471
MWh/year is acceptable.

Auxiliary
consumption

Quantity of diesel 0 Litre

Name
of PLF
CDM project

The grid emission factor is correctly


determined according to the tool and it is
transparently documented in the GEF
calculation spreadsheet /30/ and Annex 3 of the
PDD /02/, the raw data used were taken from
PLN national electricity grid. This have been
demonstrated in Annex 3 of the PDD and cross
checked with the source:
http://pasarkarbon.dnpi.go.id/web/index.php/ko
mnasmpb/read/20/faktor-emisi-jaringan-listrikjawa-madura-bali-jamali-2010-.html
The validation team concluded that the official
data sources are deemed to be valid and correct.
For Project Emission
Estimate as 0 litre for Due to the emergency back-up purpose, the
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Validation Report
consumption in the
project activity

Density of diesel

01 997 9105067713
ex-ante calculation

876x10-6
T/litre

Net Calorific Value 0.0433


of diesel
TJ/tonne

Emission factor of 74.8 tCO2/TJ


diesel

annual consumption amount of diesel fuel is


expected to be very limited, thus the project
emissions from fossil fuel consumption can be
neglected in ex-ante estimation.
Conversion
factor The validation team checked the source
from litre of diesel http://www.aaaoe.com/buy/5/fuel_oil_4648/Die
into Ton of diesel
sel.html and confirmed it is acceptable.
IPCC Default value
The validation team reviewed the below source
and confirmed it is correct:
IPCC Default value from 2006 IPCC
Guidelines for National Greenhouse
Gas Inventories, Volume 2, Chapter 1 (Table
1.2).
IPCC Default value
The validation team reviewed the below source
and confirmed it is correct:
IPCC Default value from 2006 IPCC
Guidelines for National Greenhouse
Gas Inventories, Volume 2, Chapter 1 (Table
1.4).

Baseline Emissions
As per paragraph 11 of the methodology AMS-I.D., Version 17, the baseline emissions are calculated as the
product of electrical energy baseline EGBL, y expressed in MWh of electricity produced by the renewable
generating unit multiplied by the grid emission factor.

BE y = EGBL , y * EFCO2 , grid , y


Where,
Parameter

Description

Ex-ante value

BE y

Baseline Emissions in year y (t CO2)

EGBL, y

Quantity of net electricity supplied to the grid as a result of the


implementation of the CDM project activity in year y (MWh)

47,471 MWh/year

EFCO 2, grid , y

CO2 emission factor of the grid in year y (t CO2/MWh)

0.713 tCO2e/MWh

The baseline emission factor (EFgrid,CM,y) for the project, using the combined margin (CM) approach, is fixed exante during the first crediting period. According to AMS-I.D., Version 17 and the linked tools, the default
weights for the proposed project are 50% for OM and 50% for BM for the first crediting period, and 25% for
OM and 75% for BM for the second and third crediting period.
The validation team has crosschecked the data and calculation listed in Section B.6 of the PDD. It is found that
the OM and BM data are provided by the Directorate General Electricity and Energy Utilization (DJLPE,
Direktorat Jenderal Listrik dan Pemanfaatan Energi) (Indonesian DNA) /45/, /30/
The validation team also checked the PDD, and the grid information applied in the calculation of emission
factor via the Indonesia DNAs webpage. In order to calculate OM emission factor, Average OM method has
been chosen as low cost/must run resources constitute more than 50% of total grid generation.
The Average OM emission factor is calculated as per Option A of the Tool /30/. BM emission factor is
calculated for the group of power capacity additions that have been built most recently and comprise 20% of the
system electricity generation as it has the larger annual generation than the group of five power units that have
been built most recently.

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01 997 9105067713

The raw data on power generation as well as the calculation was provided by the report /30/ and listed in
Section B.6.1. and Annex 3 of the final PDD /2/. The simple OM emission factor is calculated as 0.711
tCO2e/MWh and the BM emission factor as 0.715 tCO2e/MWh.
The calculation of EFgrid,CM is as below:
EFgrid,CM = 0.50.711+0.50.715 = 0.713 (tCO2e/MWh)
The validation team has crosschecked the data listed in Annex 3 of the final PDD /2/ and the calculation
spreadsheet /30/, and confirmed consistent. The emission reductions due to the project activity were estimated
ex-ante to be 33,847 tCO2e per year in the final PDD /2/. The provided baseline data is thus confirmed to be the
most recent data available at the time of submission of the PDD to the DOE for validation (i.e. December 2011),
for the ex-ante estimation of emission reductions.
In summary, the baseline emission factor (EFgrid,CM) of the project activity is 0.713 tCO2e/MWh.
Thus baseline emission is estimated as 33,847 tCO2 per year.

Project emissions
As per paragraph 20 of approved methodology AMS-I.D. (Version-17, EB- 61), the calculation of project
emissions of hydropower project will follow the procedures described in the most recent version of ACM0002.
According to ACM0002, there are two components to be considered, i.e. emission from (i) fossil fuel
consumption (PEFF,y) and (ii) the reservoir (PEHP,y).
The project emission for the project activity will be
PEy = PEHP,y + PEFF,y
Where:
PEHP,y - Emission from reservoir
PEFF,y - Emission from fossil fuel consumption in year y. It is the emission from diesel generator which will be
used in emergency purposes and it is calculated by Tool to calculate project or leakage CO2 emission from
fossil fuel consumption.
For emissions from fossil fuel consumption (PEFF,y)
Through on-site interviews with the project participant /I01/, it was revealed that diesel backup generators
would be used in unplanned emergency such as both the cut-off of electricity supply from the national grid and
the hydropower plant. The project participant will calculate project emissions from the back-up diesel generator
based on the actual diesel consumption. The consumption of diesel is monitored and the project emissions will
be calculated according to Tool to calculate project or leakage CO2 emissions from fossil fuel combustion
/B18/. Due to the emergency back-up purpose, the annual consumption amount of diesel fuel is expected to be
very limited, thus the project emissions from fossil fuel consumption can be neglected in ex-ante estimation.
For emissions from the reservoir (PEHP,y)
The project activity does not result in new reservoirs or an increase in area of the existing reservoir. The
reservoir involved in the project activity is a Garut Regency-owned reservoir as part of the irrigation
development works; the modification of the reservoir is beyond the project participants control and not related
to the project activity. Thus the project emissions (PEHP,y) are considered as negligible. Thus PEHP,y = 0.

Thus, PEy = PEFF,y + PEHP,y = 0

The following project emissions have been included and excluded from the project emissions estimation
including the validation teams conclusion:
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01 997 9105067713

Included project emission source

Validation teams conclusion

CO2 emissions from fossil fuel consumption (PEFF,y)

As the project activity will use diesel backup


generators in unplanned emergency such as both the
cut-off of electricity supply from the national grid and
the hydropower plant, this emission is included.
This is conservative and appropriate for the project
scenario

Excluded project emission source

Validation teams conclusion

CO2 emissions from the reservoir (PEHP,y)

The project activity is implemented at an existing


reservoir, and the project would not cause change in
the volume of reservoir. This is confirmed during the
on site visit and interview with the project owner /I01/
and review of approval of UKL-UPL (Environment
Analysis) on Cirompang Mini hydro power plant /10/
from Environment management Division of Garut
Regency, and Agreement between the project
participant with GP3A DI Cirompang /24/ dated 11th
August 2011 for using the water from river Cirompang
for power generation.
This is appropriate for the project scenario.

According to the Tool to calculate project or leakage CO2 emission from fossil fuel consumption, Version 01
/B18/, the project emission of the project activity is estimated as below:
PEFC,j,y = FCi,j y

COEF

i,y

COEFi,y = NCVi,y EFCO2,i,y


Where:

Ex-ante value

Parameter
Description
PEFC,j,y
Are the CO2 emissions from fossil fuel combustion in process j
during the year y

FCi,j,y

Is the quantity of fuel type i combusted in process j during the year y


(mass or volume unit/year)

0 Tonne/year

COEFi,y

Is the CO2 emission coefficient of fuel type i in year y (tCO2/mass


or volume unit)

3.23884 tCO2/tonne

NCVi,y

Is the weighted average net calorific value of the fuel type i in year y

0.0433 TJ/tonne

EFCO2,i,y

Is the weighted average CO2 emission factor of fuel type i in year y


(tCO2/GJ)

74.8 tCO2/TJ

Are the fuel types combusted in process j during the year y

Diesel

Thus project emission of the project activity is estimated as 0 tCO2 for ex-ante calculation.

Leakage emissions
Leakage is considered as negligible in accordance with AMS-I.D., Version 17, and hence can be assumed as
zero.

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01 997 9105067713

While the project emissions & leakage emissions are zero, baseline emissions (BEy) are equal to the emission
reductions (ERy) due to the project activity and have been estimated to be 33,847 tCO2e per year in the PDD,
based on an ex-post baseline emission factor of 0.713 tCO2e/MWh /45/.
ERy = BEy = EGBL,y x EFgrid,CM,y
The emission reductions due to the project activity were estimated ex-ante to be 33,847 tCO2e per year.
In summary, the calculation of emission reductions was correctly demonstrated by the PP according to the
methodology AMS-I.D., Version 17 and its tool Tool to calculate the emission factor for an electricity system,
Version 02.2.1 /B19/. The table below summaries validation teams determination of emission reduction:
All assumptions made for estimating GHG
are listed in the PDD
All data used by project participants are
listed in the PDD

Yes
No
Yes
No

As per PDD Section B.6., assumptions were made


for ex-ante GHG emission reductions.

Their references and sources are also listed in


the PDD

Yes
No

All data from public sources, such as Indonesia


DNAs information are listed in the PDD Annex 3.

Formulas, parameters, values are complete,


accurate, transparent and conservative

Yes
No

The validation team checked and found that the


formulas, parameters, values applied in Annex 3 of
the final PDD /2/ are complete, accurate, transparent
and conservative.

All the references and documents used are


correctly
quoted
and
conservatively
interpreted in the PDD

Yes
No

The validation team checked and found that the


references and documents applied in Annex 3 of the
final PDD /2/ are correctly quoted and
conservatively interpreted

Methodology has been applied correctly to


calculate project
emissions,
baseline
emissions, leakage emissions and emission
reductions

Yes
No

The methodology AMS-I.D., Version 17 is applied


correctly to calculate project emissions, baseline
emissions, leakage emissions and emission
reductions.

All the emissions of baseline emissions can


be replicated using information provided in
the PDD

Yes
No

The validation team checked the information


provided in the PDD /2/ with the reference
information, and all the emissions of baseline
emissions can be replicated.

All data such as GHG emission, electricity


generation of power plants are listed in the PDD
Annex 3.

Based on the calculations and results presented in the sections above the implementation of the project activity
will result in an average ex-ante estimation of emission reduction conservatively calculated to be 33,847 tCO2e
per year for the selected crediting period.
All assumptions and data used by the project participants are listed in the PDD and/or supporting documents,
including their references and sources. All documentation used by the project participants as the basis for
assumptions and source of data is correctly quoted and interpreted in the PDD. All values used in the PDD are
considered reasonable and conservative in the context of the proposed CDM project activity. The baseline
methodology has been applied correctly to calculate project emissions, baseline emissions, leakage and emission
reductions. All estimates of the baseline, project and leakage emissions can be replicated using the data and
parameter values provided in the PDD.

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01 997 9105067713

3.5 Additionality :
The project additionality was assessed by the validation team using the approach given below for complying
with;
1) Simplified modalities and procedures for small-scale clean development mechanism project activities /B15/
2) Attachment A to Appendix B of the Simplified Modalities and Procedures for small-scale CDM project
activities /B5/
3) CDM Validation and Verification Manual, EB 55, Annex 1, Version 01.2 /B1/
4) Non-binding best practice examples to demonstrate additionality for SSC project activities EB35, Annex 34
/B8/
The project activitys additionality has been assessed in the PDD under Section B.5, according to Simplified
modalities and procedures for small-scale clean development mechanism project activities /B15/ and
Attachment A to Appendix B of the simplified Modalities and Procedures for Small Scale CDM project
activities /B5/.
This was in line with the requirement stated in the methodology, AMS-I.D. version 17 /B17/.
The project participant has selected project IRR as the financial indicator to demonstrate the investment barrier
of the project activity. The validation team considers this financial indicator selected to be appropriate for the
project.
The investment analysis is applied in accordance to Guidelines on the Assessment of Investment Analysis
(EB 62, Annex 5, version 05) /B12/.
The validation team was able to verify that CDM has been introduced and considered prior to the starting of the
project activity.
In conclusion, the assessment of the arguments presented in the PDD has been sufficient to demonstrate that the
proposed project activity is not likely the baseline scenario and the emission reductions resulting from the
project activity are additional.
The following sections described the validation details of project activitys additionality by the validation team.

3.5.1 CDM consideration:


According to the CDM Validation and Verification Manual paragraph 96 /B1/, if the project activity starting
date is prior to the date of publication of PDD for stakeholder comments it shall be demonstrated that the CDM
benefits were considered necessary in the decision to undertake the project as a proposed CDM project activity.
For this project activity, during on site interviews, its reveled that the first business license was granted on 10th
November 2009. The PDD stated that the notification letter about prior CDM consideration was sent to DNA
Indonesia on 08th March 2011 /16/ and to UNFCCC on 09th March 2011 /17/. The project starting date was
04th August 2011 when the EPC contract was signed /6/.
According to Guidelines on the Demonstration and Assessment of Prior Consideration of the CDM version 04
EB 62 /B13/, for project activities with a starting date on or after 2nd August 2008, the project participant must
inform a host party DNA and the UNFCCC secretariat in writing of the commencement of the project activity
and of their intention to seek CDM status. Such notification must be made within six months of the project
activity starting date using the standardized form F-CDM-Prior Consideration.
It is applicable to the project activity since the project starting date (i.e. 04th August 2011, the date when the
EPC contract was signed) was after 2nd August 2008, therefore notifications to host party DNA and the
UNFCCC were required. As reported in the Section B.5 of the PDD, the project participant submitted an official
letter to the Indonesia DNA on 08th March 2011 /16/ and to UNFCCC on 09th March 2011 /17/.
The notification of CDM status to UNFCCC was in five month prior to the project activity starting date.
Therefore the requirements in the Demonstration and Assessment of Prior Consideration of the CDM are
complied, and the adequacy of CDM prior consideration compliance is demonstrated for the project activity.
It is TV Rheinland validation team opinion that the proposed CDM project activity complies with the
requirements of the latest version of the guidance on prior consideration of CDM.
The timeline for the project activity is detailed as below:

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Validation Report
Timeline
June 2010
23rd June 2010

28th June 2010

23rd July 2010

26th July 2010

2nd September
2010

10th December
2010

2nd March 2011

8th March 2011

9th March 2011


15th April 2011
4th August 2011
11th August
2011

21st November
2011

01 997 9105067713

Milestone
Determination by the validation team
Finish Feasibility study report
Feasibility study report, June 2010 /11/
Board decision to processs the clearance for Certified true copy of the resolution passed
the 8 MW project activity
by the board of directors of PT Tirta Gemah
Ripah for developing 8 MW Cirompang
Mini hydropower project, dated 23rd June
2010 /6/
PPA between PT. PLN (Persero) and PT.
Document No. 128/Pj/041/DJBB/2010, date
Tirta Gemah Ripah for Mini Hydro Power
28th June 2010 /7/
Plant Total Capacity 2000 kW.
Investment Approval from the Regent of
Document No. 503/1564/KPM, date 23rd
Garut for Cirompang Mini Hydro Power Plant
July 2010 /8/
with capacity 8.000 kW.
Recommendation on Cirompang MHPs Use
of Land Allocation Permit, from the Office of Document No. 503/167/RK-TR/VII/2010,
Housing, Spatial Planning, and Settlements, date 26th July 2010 /9/
Garut regency.
Recommendation
letter
document
of
Environmental Management Effort & Document No. 660/394/TL-BPLH/10, date
Environmental
Monitoring
Effort
for 2nd September 2010 /10/
Cirompang MHP 8 MW construction.
Board resolution to undertake the project Certified true copy of the resolution passed
activity under CDM
by the board of directors of PT Tirta Gemah
Ripah for developing 8 MW Cirompang
Mini hydropower project, dated 10th
December 2010 /14/
CDM Advisory services agreement between CDM Advisory services agreement, No.
PP and consultant.
CDM/EVI/TGR/03/162011, dated 2nd
March 2011
CDM prior intimation to DNA
CDM notification letter No.
33/DIR/TGR/III/2011, dated 8th March
2011 /16/
CDM prior intimation to UNFCCC
CDM notification letter, dated 9th March
2011 /17/
Stakeholder consultation meeting
Meeting minute, dated 15th April 2011 /19/
EPC contract between PT. Hutama Karya EPC Contract No. TGR 04/SPP/PLTM(Persero) and PT. Tirta Gemah Ripah
CRP/TGR/VIII, dated 4th August 2011 /23/
The Agreement between PT. TGR with GP3A
Daerah Irigasi Cirompang (affiliation of
The Agreement No. TGR:
farmers using Cirompang water) regarding the
001/DIR/TGR/PPJ/CRPM/VIII/2011, dated
Use of Dams, Irrigation Channels, and
11th August 2011 /24/
Tunnels for the Cirompang Mini Hydro
Power Investment Project.
PPA between PT. PLN (Persero) and PT.
047.Add/041/DJBB/2011, date 21st
Tirta Gemah Ripah for Mini Hydro Power
November 2011 /26/
Plant Total Capacity 8000 kW

From the timeline above, it is confirmed that the starting date of project is 04th August 2011, which is the date
when the EPC contract was signed /23/.

Starting date of project

04th August 2011 (i.e. the date


when the EPC contract was signed
Rev No.: 01 ( 01/11/2011)

Justification of and evidences


(references) on the starting date
of project
The validation team interviewed
with the project participant and
checked provided project

Date of CDM consideration

(i) CDM notification submitted to


the DNA of Indonesia on 08th
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Validation Report
/23/)

01 997 9105067713
documents; the signing of EPC
contract was the earliest date
among these real actions of the
project. According to the definition
of project starting date in CDM
Glossary, the selected starting date
of project activity is justified.

March 2011;
(ii) CDM notification received by
EB on 09th March 2011.

In conclusion, the staring dates of the project activity were after 02 August 2008, the proposed project activity is
defined as an new project activity. As per the Guidelines on the demonstration and assessment of prior
consideration of the CDM/B13/, the project participant must inform a Host Party designated national
authority (DNA) and the UNFCCC secretariat in writing of the commencement of the project activity and of
their intention to seek CDM status. Such notification must be made within six months of the project activity start
date and shall contain the precise geographical location and a brief description of the proposed project activity.
The project participant has sent notifications to DNA and UNFCCC and the validation team confirmed that it is
valid and acceptable. Based on the documented evidence as described above, it is clearly demonstrated that the
CDM was seriously considered by the project owners prior to starting dates of the project activity.

3.5.2 Alternatives:
The methodologies AMS-I.D, version 17 /B17/ does not require the analysis of baseline alternatives. Further, as
per paragraph 28 of the simplified modalities and procedures for small-scale CDM project activities /B15/, a
simplified baseline and monitoring methodology listed in appendix B may be used for a small-scale CDM
project activity if project participants are able to demonstrate to the validation team that the project activity
would otherwise not be implemented due to the existence of one or more barrier(s) listed in Attachment A of
Appendix B /B5/.
TV Rheinland validation team considers the selected baseline is credible and complete.

3.5.3 Investment analysis:


The Investment Analysis has been assessed for compliance with the latest version (05) of the Guidance on the
Assessment of Investment Analysis. /B12/
According to Attachment A to Appendix B of the Indicative simplified baseline and monitoring methodologies
for selected small-scale CDM project activity categories /B5/, the project participants have chosen investment
barrier in order to demonstrate the additionality of the project.
At the time of decision making, the Internal Rate of Return (IRR) analysis was conducted based on inputs
values taken from approved FSR /11/ with the Debt / Equity ratio of 70/30. This can be demonstrated that the
loan has also been considered at the time of the investment decision, considering the fact that the financial plan
included bank loan.
It is appropriate and in accordance with the Guidelines on the assessment of investment analysis (Version 05)
/B12/, paragraph 6, Input values used in all investment analysis should be valid and applicable at the time of
the investment decision taken by the PP.
A complete account of how the parameters used in Investment Analysis are validated and cross-checked in
accordance to VVM articles 110 - 111 have been conducted with traceable information from registered CDM
projects and other independent sources.

3.5.3.1 Choice of approach:


According to the Attachment A to Appendix B of the simplified modalities and procedures for small-scale
CDM project activities /B5/ as referred to the General Guidelines to SSC CDM methodologies version 17
/B7/ and the Guidelines on the Assessment of Investment Analysis (Version 5, EB62 Annex 5) /B12/, the
benchmark analysis was selected by the project participant when conducting the projects financial assessment.
The selection of benchmark analysis is justified in considering that, other than the CDM revenue, the project
activity would generate revenue through the sale of electricity to the national grid company. The benchmark
approach is considered appropriate, since the baseline scenario does not require investment or is out of the direct
control of the project developer. This is also complied with the requirement in the article 19 of the Guidelines
on the assessment of investment analysis. The project participant has selected project IRR as the financial
indicator. The validation team considers this financial indicator selected to be appropriate for the project, since
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01 997 9105067713

the project will be financed 70% loan & 30% equity capital. In addition to this, the baseline scenario also
reveals that the continuation of the current situation - electricity will continue to be imported from the grid,
which is outside the direct control of the project participant. Hence, the choice for the project participant is
restricted to invest or not to invest. The validation team concludes that the benchmark approach is the most
suited as defined in the Guidelines on the Assessment of Investment Analysis, Version 05, EB 62, Annex 5,
article 19 /B12/.
In order to assess the claim from the project participant that the project scenario is not economically feasible
without benefits from CER sales, the validation team adopted the following approach:
Benchmark selection: Determining the suitability of the benchmark applied for the type of financial indicator
presented:
According to the Guidelines on the Assessment of Investment Analysis, Version 05, EB 62, Annex 5,
/B12/ article 12, Local commercial lending rates or weighted average costs of capital (WACC) are
appropriate benchmarks for a project IRR.
As noted in the PDD, an investment barrier analysis is carried out through applying benchmark analysis
method, which is mainly based on the comparison between project IRR and the benchmark estimated
from weighted average costs of capital (WACC). The project participant has selected WACC as the
benchmark.
According to interview with the management representative of PP, the project activity is the first
hydropower project owned by TGR, thus there is no past financial behavior or internal company
benchmark of the project participant in relations to similar projects.
Input parameters: Conducting an assessment of parameters and assumptions used in calculating the financial
indicator and determining the accuracy & suitability of parameters, the validation team has considered the
following evidence to support the investment decision timing i.e. Board resolution to undertake the project
activity under CDM, dated 10 December 2010 /14/.
For the purpose of validating the financial input parameters, the validation team has considered the investment
decision date, 10 December 2010 in order to validate the consistency, appropriateness of the input values with
this timing & consistency of the listed input values application in the financial calculation spreadsheet.
It is noted that the FSR /11/ has been the basis of the decision to proceed with the investment in the project, i.e.
that the period of time between the decision making of the project participant to invest into project activity, 10
December 2010, /14/ and the final FSR, November 2010, /11/ is about one months. It is sufficiently short for the
validation team to confirm that it is unlikely in the context of the underlying project activity that the input values
would have materially changed.
The profitability estimates of the project, which forms the basis for IRR calculation is based on plant capacity,
Plant Load Factor, Electricity price, Operation & Maintenance Costs, interest, depreciation, taxation.
The validation team had reviewed the following input values used in the financial calculation through
review of sources presented in the PDD Section B.5 & financial calculation spreadsheet. The project is
envisaged to be financed 70% loan & 30% equity capital. Please be noted that the FSR has been the basis of the
decision to proceed with the investment in the project.
The validation team confirmed that all data used in the investment analysis have been obtained from credible
sources and is valid and applicable at the time of the investment decision taken by the project participant.
Input values for benchmark calculation:
WACC calculation is tabulated as below:
WACC = (E/V) * Re + (D/V)*Rd*(1-Tc)
Re = krf + Rp *
Item
E/V

Description
Average industry equity ratio (%)

Rev No.: 01 ( 01/11/2011)

Data
30%

Reference Documents / Evidences


Guidance on Investment Analysis Annex5, EB62 /B12/

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Validation Report

01 997 9105067713

D/V

Average industry debt ratio (%)

70%

Re

Cost of equity (%)

53.96% Calculated

Rd

Cost of debt (%)

13%

Feasibility Study Report /11/

Tc

Average enterprise tax rate

28%

Government Regulation No.17, Year 2000, Clausal


No.17 /42/

krf

Risk free rate

8.71%

Rp

Market Risk Premium

17.7%

Calculated

Beta of industry

2.56

Calculated

Benchmark (WACC) (%)

Guidance on Investment Analysis Annex5, EB62 /B12/

http://www.idx.co.id/Portals/0/StaticData/Publication/B
ondBook/FileDownload/INDONESIA%20BOND%20
MARKET%20DIRECTORY%202011.pdf

22.7%

Parameter:

Average industry equity ratio (%)

Value applied for the IRR calculation:

30%

Source of the value:

Guidance on Investment Analysis Annex5, EB62 /B12/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on Guidance on Investment Analysis
Annex5, EB62 /B12/
The value used is based on Guidance on Investment Analysis
Annex5, EB62 /B12/ and the validation team confirmed the
value to be correct & consistent.
This is matched with FSR /11/. The validation team further
cross-checked with CDM registered projects (hydro projects,
located in Indonesia) /47/ & found that the equity/debt structure
as below:
Ref

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

3474

4021
4106
4118
3580

Rev No.: 01 ( 01/11/2011)

Name of CDM project


Ranteballa Small-Scale
Hydroelectric Power
Project
10 MW Tangka/Manipi
Hydro Electric Power
Plant
Parluasan Hydro Electric
Power Plant
Asahan 1 Hydroelectric
Power Plant 2 x 90 MW
Silau-2 small hydro
power plant in North

Equity/Debt
structure

Reg. date

No
information

10 Dec.
2010

25% / 75 %

26 Jan.
2011

35% / 65 %
31% / 69%
20% / 80%

12 Feb.
2011
01 Mar
2011
07 Oct.
2011
Page 33

Validation Report

01 997 9105067713
Sumatera Province,
Indonesia
Wampu Hydro Electric
31 Oct
5368
30% / 70%
Power Project
2011
The equity / debt structure of the project activity lies well within
the range of above projects. Thus the Average industry equity
ratio value of the project activity is acceptable.

Parameter:

Average industry debt ratio (%)

Value applied for the IRR calculation:

70%

Source of the value:

Guidance on Investment Analysis Annex5, EB62 /B12/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on Guidance on Investment Analysis
Annex5, EB62 /B12/
The value used is based on Guidance on Investment Analysis
Annex5, EB62 /B12/ and the validation team confirmed the
value to be correct & consistent.
This is matched with FSR /11/. The validation team further
cross-checked with CDM registered projects (hydro projects,
located in Indonesia) /47/ & found that the equity/debt structure
as below:
Ref

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

Parameter:
Rev No.: 01 ( 01/11/2011)

Name of CDM project

Equity/Debt
structure

Reg. date

Ranteballa Small-Scale
No
10 Dec.
3474 Hydroelectric Power
information 2010
Project
10 MW Tangka/Manipi
26 Jan.
4021 Hydro Electric Power
25% / 75 %
2011
Plant
Parluasan Hydro Electric
12 Feb.
35% / 65 %
4106
Power Plant
2011
Asahan 1 Hydroelectric
01 Mar
4118
31% / 69%
Power Plant 2 x 90 MW
2011
Silau-2 small hydro
power plant in North
07 Oct.
3580
20% / 80%
2011
Sumatera Province,
Indonesia
Wampu Hydro Electric
31 Oct
30% / 70%
5368
Power Project
2011
The equity / debt structure of the project activity lies well within
the range of above projects. Thus the Average industry debt
ratio value of the project activity is acceptable.

Cost of equity (%) (Re)


Page 34

Validation Report

01 997 9105067713

Value applied for the IRR calculation:

53.96%

Source of the value:

Calculated

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The cost of equity is calculated based on formula:


Re = krf + Rp *
The equation used is in line with the published information
in the following website:
http://pages.stern.nyu.edu/~igiddy/capstr.htm
With validated values of krf, Rp and , the validation team
confirmed the calculation is correct.

Parameter:

Cost of debt (%) Rd

Value applied for the IRR calculation:

13%

Source of the value:

Feasibility Study Report /11/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/
The validation team cross-checked with published soure of
World Bank for lending interest rate in Indonesia in 2010
(http://data.worldbank.org/indicator/FR.INR.LEND) /48/ and
confirmed that it was 13.3%. Moreover, the validation team
made a survey of CDM registered projects (hydro projects in
Indonesia) /47/ & found that the lending rates as below:
Ref

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

Rev No.: 01 ( 01/11/2011)

Name of CDM project

Ranteballa Small-Scale
3474 Hydroelectric Power
Project
10 MW Tangka/Manipi
4021 Hydro Electric Power
Plant
Parluasan Hydro Electric
4106
Power Plant
Asahan 1 Hydroelectric
4118
Power Plant 2 x 90 MW
Silau-2 small hydro
3580 power plant in North
Sumatera Province,

Lending rate

Reg. date

11.72 %

10 Dec.
2010

13.01 %

26 Jan.
2011

14.92 %
8 % (in US
Dollar)
13.74 %

12 Feb.
2011
01 Mar
2011
07 Oct.
2011
Page 35

Validation Report

01 997 9105067713
Indonesia
Wampu Hydro Electric
31 Oct
5368
13.65 %
Power Project
2011
The cost of debt of project activity is among the lowest values of
CDM registered projects. Thus, the cost of debt of 13 % of
project activity is conservative and acceptable.

Parameter:

Average enterprise tax rate (Tc)

Value applied for the IRR calculation:

28%

Source of the value:

Government Regulation No.17, Year 2000, Clausal No.17 /42/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team cross-checked with Government Regulation


No.17, Year 2000, Clausal No.17 /42/ and confirmed the applied
value is correct.

Parameter:

Risk free rate (krf)

Value applied for the IRR calculation:

8.71%

Source of the value:

http://www.idx.co.id/Portals/0/StaticData/Publication/BondBook/
FileDownload/INDONESIA%20BOND%20MARKET%20DIRE
CTORY%202011.pdf

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team checked the research Estimating Risk Free


Rates by Dr. Aswath Damodaran of Stern School of Business,
New York University page 6. It is advised that When doing
investment analysis on longer term projects or valuation, the risk
free rate should be the long term government bond rate. Hence
bonds having a maturity period of 10 years or more are selected
from the source INDONESIA BOND MARKET DIRECTORY
2011 /50/ for the calculation. The value of 8.71% for risk free
rate is conservative, as the benchmark of WACC will become
25.4 %, higher than 22.7%, if using default value from Guidelines
on the Assessment of Investment Analysis, Version 05, EB 62,
Annex 5 /B12/. Thus, the Risk free rate of 8.71 % of project
activity is conservative and acceptable.

Rev No.: 01 ( 01/11/2011)

Page 36

Validation Report

01 997 9105067713

Parameter:

Market Risk Premium (Rp)

Value applied for the IRR calculation:

17.7%

Source of the value:

Calculated

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/
Market Risk Premium (Rp) = Market return - Risk free rate

(krf).
Justification by the validation team
according to 113 of VVM: ( cross
checking and comparison as applicable)

Market return is calculated based on Jakarta Composite Index


(http://in.finance.yahoo.com/q/hp?s=%5EJKSE&a=00&b=1&c=1
997&d=01&e=27&f=2012&g=d ). The considered time period
is from 12 December 2005 to 09 December 2010 which
corresponds to the investment decision date of the project activity.
Thus, the validation team confirmed it is acceptable.

Parameter:

Beta of industry ()

Value applied for the IRR calculation:

2.56

Source of the value:

Calculated from the source


http://www.stern.nyu.edu/~adamodar/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team check value of Beta of industry from the


source http://www.stern.nyu.edu/~adamodar/ /51/ and confirmed
it is correct. The unlevered beta is 0.95 and levered beta is 2.56

Input values for project IRR calculation:

Parameter

Value

Reference Documents / Evidences

Plant capacity

8 MW

Feasibility Study Report /11/

Plant Load Factor

68.77%

Feasibility Study Report /11/

Operational hours

8760 hours / annum

Feasibility Study Report /11/

48,194 MWh / annum

Feasibility Study Report /11/

Gross energy generation


Rev No.: 01 ( 01/11/2011)

Page 37

Validation Report
Auxiliary consumption

01 997 9105067713
1.5%

Net energy supplied to the


grid
Electricity price

47,471 MWh / annum

656.00 IDR / kWh


(0.0729 USD / kWh)

Time span for assessment


period

20 years

Feasibility Study Report /11/


Calculated
REGULATION OF THE MINISTER OF
ENERGY AND MINERAL RESOURCES
NUMBER: 31 YEAR 2009 /41/
Feasibility Study Report /11/

Income Tax Rate

28%

Indonesia Government Regulation No.17


Year 2000, clausal No.17 /42/

Depreciation

5%

Indonesia Government Regulation No.17


Year 2000, clausal No.17 /42/

Exchange Rate

9000 IDR/USD

http://www.x-rates.com/cgi-bin/hlookup.cgi

Project cost

128,101 Million IDR

Feasibility Study Report /11/

Contingency

5% of Project cost

Feasibility Study Report /11/

Total investment cost

134,507 Million IDR

Cost per MW

16,813 Million IDR / MW

Feasibility Study Report /11/


For reference

Debt ratio

70%

Feasibility Study Report /11/

Interest rate on loan

13%

Feasibility Study Report /11/

Tenure of term loan

8 years

Feasibility Study Report /11/

1,135 Million IDR

Feasibility Study Report /11/

Labour cost

408 Million IDR

Feasibility Study Report /11/

Water Tax and Retribution

228 Million IDR

Feasibility Study Report /11/

Management Operation

582 Million IDR

Feasibility Study Report /11/

640 Million IDR

Feasibility Study Report /11/

264 Million IDR

Feasibility Study Report /11/

3,257 Million IDR

Feasibility Study Report /11/

Maintenance cost

Insurance,
ISO
Production Service
Overhead & Admin. Cost
Total O&M cost

and

Inflation Rate

5.2%

http://www.imf.org/external/pubs/ft/weo/201
1/01/weodata/weorept.aspx?sy=2009&ey=20
16&scsm=1&ssd=1&sort=country&ds=.&br
=1&pr1.x=27&pr1.y=12&c=536&s=PCPI%2
CPCPIPCH%2CPCPIE%2CPCPIEPCH&grp
=0&a=

Salvage value

10%

Feasibility Study Report /11/

Rev No.: 01 ( 01/11/2011)

Page 38

Validation Report
Emission reductions / year

01 997 9105067713
33,847 tCO2e

Calculation /31/

Parameter:

Plant capacity

Value applied for the IRR calculation:

8 MW

Source of the value:

Feasibility Study Report /11/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team cross checked with EPC contract /23/,


Investment Approval from the Regent of Garut dated 23rd July
2010 /8/ and confirmed the installed capacity of 8 MW for
project activity.

Parameter:

Plant Load Factor

Value applied for the IRR calculation:

68.77%

Source of the value:

Feasibility Study Report /11/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/
The validation team has cross checked the plant load factor
value in accordance with the Guidelines For The Reporting And
Validation of Plant Load Factors, Version 01, EB 48, Annex 11.
/B9/. The plant load factor has been verified and confirmed by a
third party (Chandripa Tirta Energia) /12/.
Chandripa Tirta Energia is a engineering consultancy company
/13/ that has technical competence for hydro sector /13/.

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team also conducted survey of other CDM


registered projects (small-scale projects, employing same
methodology, AMS-I.D., located in Indonesia) /47/ & found that
plant load factor value for the project activity lies well within
this range.
Remarks: The validation team has surveyed IGES CDM
Investment Analysis Database & CDM Pipeline list in
http://cd4cdm.org/ website as of 30 May 2012 & only 4
registered small scale projects within Indonesia.

Rev No.: 01 ( 01/11/2011)

Page 39

Validation Report

01 997 9105067713
Ref

Name of CDM project

Ranteballa Small-Scale
3474 Hydroelectric Power
Project
10 MW Tangka/Manipi
4021
Hydro Electric Power Plant
Parluasan Hydro Electric
4106
Power Plant
Silau-2 small hydro power
3580 plant in North Sumatera
Province, Indonesia
Thus the Plant Load Factor value
acceptable.

PLF

Reg. date

80.00%

10 Dec.
2010

50.22% 26 Jan. 2011


80.00% 12 Feb. 2011
65.40% 07 Oct. 2011
of the project activity is

Parameter:

Operational hours

Value applied for the IRR calculation:

8760 hours / annum

Source of the value:

Feasibility Study Report /11/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

It is assumed the project activity will be operated 365 days per


years, 24 hours per day. Thus the value of 8,760
(=365daysx24hours) is acceptable.

Parameter:

Gross energy generation

Value applied for the IRR calculation:

48,194 MWh / annum

Source of the value:

Feasibility Study Report /11/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team calculated power generation based on plant


capacity, operational hours, plant load factor from Feasibility
Study Report /11/ and confirmed the value to be correct.
(8MWx8760Hx68.77%) = 48,194MWh

Rev No.: 01 ( 01/11/2011)

Page 40

Validation Report

01 997 9105067713

Parameter:

Auxiliary consumption

Value applied for the IRR calculation:

1.5%

Source of the value:

Feasibility Study Report /11/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team confirmed the value to be correct

Parameter:

Net energy supplied to the grid

Value applied for the IRR calculation:

47,471 MWh / annum

Source of the value:

Calculated

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team calculated net power generation based on


gross power generation, and auxiliary consumption from
Feasibility Study Report /11/ and confirmed the value to be
correct.

Parameter:

Electricity price

Value applied for the IRR calculation:

656.00 IDR / kWh


(0.0729 USD / kWh)

Source of the value:

REGULATION OF THE MINISTER OF ENERGY AND


MINERAL RESOURCES NUMBER: 31 YEAR 2009 /41/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Rev No.: 01 ( 01/11/2011)

Page 41

Validation Report

01 997 9105067713
The value is sourced from Feasibility Study Report /11/ & the
validation team confirmed the value to be correct & available at
the time of investment decision.
The selected Electricity tariff = 656.0 IDR/kWh is sourced from
FSR /11/. This is in line with the REGULATION OF THE
MINISTER OF ENERGY AND MINERAL RESOURCES
NUMBER: 31 YEAR 2009 /41/, article 2.

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team conducted survey of other CDM registered


projects (large-scale projects, employing same methodology,
AMS-I.D) /47/ & found that the electricity price of the project
activity is among the highest ones. The sensitivity analysis aslo
demonstrates that only if the electricity tariff increases by 47%,
the project IRR can reach to the benchmark. But this is unlikely
to happen.
No.
1
2
3
4

Reg No.
3474
4021
4106
3580

Price (IDR/kWh)
432
469.22
437.17
468.3

Capacity (MW)
2.4
10
4.2
8

Proposed project
656
In conclusion, the validation team confirmed that the value of
electricity price is acceptable.

Parameter:

Time span for assessment period

Value applied for the IRR calculation:

20 years

Source of the value:

Feasibility Study Report /11/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/
The validation team confirmed the value to be correct.

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team has also confirmed that the lifetime


stipulated conforms with the Tool to determine the remaining
lifetime of equipment, Version 01 EB50, in which assuming
full operational time, the project lifetime for hydro turbines is
150,000 hours, i.e. (150,000/8,760) years ~ 17 years.
Moreover, the salvage value of 10% of total investment is
considered at the end of time span. Thus, the value of
operational lifetime of equipment of 20 years is in the range and
acceptable.

Parameter:

Rev No.: 01 ( 01/11/2011)

Income Tax Rate

Page 42

Validation Report

01 997 9105067713

Value applied for the IRR calculation:

28%

Source of the value:

Indonesia Government Regulation No.17 Year 2000, clausal


No.17 /42/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team checked value of Income Tax Rate from


Indonesia Government Regulation No.17 Year 2000, clausal
No.17 /42/ and confirmed it is correct.

Parameter:

Depreciation

Value applied for the IRR calculation:

5%

Source of the value:

Indonesia Government Regulation No.17 Year 2000, clausal


No.17 /42/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The depreciation value is in accordance with the national


regulation under Regulation 17 year 2000. Hence, the applied
value of 5 % is reasonable. Thus, the value of Depreciation of
5% is acceptable.

Parameter:

Exchange Rate

Value applied for the IRR calculation:

9000 IDR/USD

Source of the value:

http://www.x-rates.com/cgi-bin/hlookup.cgi

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team checked the exhange rate from the source
http://www.x-rates.com/cgi-bin/hlookup.cgi and confirmed it is
correct.

Rev No.: 01 ( 01/11/2011)

Page 43

Validation Report

01 997 9105067713

Parameter:

Project cost

Value applied for the IRR calculation:

128,101 Million IDR

Source of the value:

Feasibility Study Report /11/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/
The validation team checked project cost from the source and
confirmed it is correct.
To evaluate whether the investment cost is still valid at the time
of the project starting date (04 August 2011), the validation team
has cross checked the actual contracted values versus the values
in the approved FSR:
Source:
Source : Actual signed
Approved FSR EPC contract, page 13

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

Billion IDR
EPC
Contract

128

Billion IDR
103.061

It was found the actual contract values is about 20% lower than
the FSR values. The EPC contract is accounted for more than
95% of total investment cost. The actual EPC contract cost is
substituted in project cost in Financial Analysis sheet, the
project IRR is 18.60%, which is still lower than benchmark of
22.7%.
Thus, the value of Project cost of 128,101 Million IDR is
acceptable.

Parameter:

Contingency

Value applied for the IRR calculation:

5% of Project cost

Source of the value:

Feasibility Study Report /11/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team checked Contingency cost from the source


Feasibility Study Report /11/ and confirmed it is correct.

Rev No.: 01 ( 01/11/2011)

Page 44

Validation Report

01 997 9105067713

Parameter:

Total investment cost

Value applied for the IRR calculation:

134,507 Million IDR

Source of the value:

Feasibility Study Report /11/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

Total investment cost is the sum of Project cost and


Contingency. The validation team checked Total investment cost
from the source Feasibility Study Report /11/ and confirmed it is
correct.

Parameter:

Debt ratio

Value applied for the IRR calculation:

70%

Source of the value:

Feasibility Study Report /11/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team checked debt ratio from the source


Feasibility Study Report /11/ and confirmed it is correct. Please
see further in justification for Average industry debt ratio (%) as
above.

Parameter:

Interest rate on loan

Value applied for the IRR calculation:

13%

Source of the value:

Feasibility Study Report /11/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Rev No.: 01 ( 01/11/2011)

Page 45

Validation Report

01 997 9105067713

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team checked Interest rate on loan from the


source Feasibility Study Report /11/ and confirmed it is correct.
Please see further in justification for Cost of debt (%) as above.

Parameter:

Tenure of term loan

Value applied for the IRR calculation:

8 years

Source of the value:

Feasibility Study Report /11/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team checked Tenure of term loan from the


source Feasibility Study Report /11/ and confirmed it is correct.

Parameter:

Total O&M cost

Value applied for the IRR calculation:

3,257 Million IDR

Source of the value:

Feasibility Study Report /11/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/
The validation team confirmed the value to be correct.
Total O&M cost includes:

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

Rev No.: 01 ( 01/11/2011)

No.

Item

Value

Maintenance cost

1,135 Million IDR

Labour cost

408 Million IDR

Water Tax and Retribution

228 Million IDR

Management Operation

582 Million IDR

Insurance,
ISO
Production Service

Overhead & Admin. Cost

and 640 Million IDR

264 Million IDR


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01 997 9105067713
Total

3,257 Million IDR

The validation team has conducted a further comparison with


the operation & maintenance cost for this project activity versus
other registered CDM projects in the same country. It shows an
approximate range of 1.80% to 5.57%, an average of 2.87%.
The operation & maintenance cost for this project activity lies
well below this range and acceptable.
Reg No.

Capacity
(MW)

3474
4021
4106
4118
3580
5368
Project
Activity

2.4
10
4.2
180
8
46.8

O&M
(% of project
cost
3.11%
5.57%
2.00%
2.14%
1.80%
2.65%

8.0

2.42%

Parameter:

Inflation Rate

Value applied for the IRR calculation:

5.2%

Source of the value:

http://www.imf.org/external/pubs/ft/weo/2011/01/weodata/weore
pt.aspx?sy=2009&ey=2016&scsm=1&ssd=1&sort=country&ds=.
&br=1&pr1.x=27&pr1.y=12&c=536&s=PCPI%2CPCPIPCH%2
CPCPIE%2CPCPIEPCH&grp=0&a=

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team checked Inflation Rate from the source and
confirmed it is correct.

Parameter:

Salvage value

Value applied for the IRR calculation:

10%

Source of the value:

Feasibility Study Report /11/

Consistency of the value:

The value was found to be consistent in the PDD /02/ and


spreadsheet /32/

Validity of input value at the time of


investment decision making:

At the time of investment decision /14/ it was confirmed that the


input value is valid based on FSR /11/

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01 997 9105067713

Justification by the validation team


according to 113 of VVM: ( cross
checking and comparison as applicable)

The validation team confirmed the value to be correct.


It is further checked supporting document Basis for the salvage
value assumed /33/ and confirmed that the applied value is
commonly acceptable in international finance.

Financial calculation and conclusion


The financial analysis is in accordance with the Simplified modalities and procedures for small-scale clean
development mechanism project activities /B15/ and the Guidelines on the Assessment of Investment
Analysis, Version 05, EB 62, Annex 5, /B12/. All input parameters used in the IRR calculation were valid at
the time of investment decision making. The validation team confirms that the project IRR post tax without any
CDM revenue works out to be 15.06% which is below benchmark of 22.7%.
The investment analysis has been calculated over the period of 20 years which is in line with the Guidelines on
the assessment of investment analysis /B12/.
Benchmark Value

Installed capacity

22.7%

8 MW

IRR without CDM

IRR without CDM

(Inputs from FSR)

(Inputs from EPC contract)

15.06%

18.60%

It is clearly demonstrated that the proposed project activity without CER revenues is financially unattractive.
The validation took cognizance of 97, 112 and 113 of VVM (version 01.2).

3.5.3.2 Sensitivity analysis


According to the Guidelines on the Assessment of Investment Analysis, Version 05, EB 62, Annex 5, /B12/,
only variables including the initial investment cost, that constitute more than 20% of either total project costs or
total project revenues should be subjected to reasonable variation and the results of this variation should be
presented in the PDD and be reproducible in the associated spreadsheets. The validation team thus confirms that
the following parameters meet the requirement and these parameters have been subjected to variations in the
range of +10% and -10% in the PDD.
Investment costs,
Annual O&M cost,
Electricity tariff and
Annual electricity supply
Input Values
Investment costs
Electricity tariff
Annual power supply
Annual O&M Cost

10%
13.66%
16.78%
16.78%
14.81%

5%
14.34%
15.93%
15.93%
14.94%

0%
15.06%
15.06%
15.06%
15.06%

-5%
15.85%
14.18%
14.18%
15.19%

-10%
16.72%
13.27%
13.27%
15.31%

The validation took cognizance of 111 (e) of VVM (version 01.2). The table below summaries the situation
where the IRR would reach the benchmark:
Input value

Investment
cost

Variation

Validation teams opinion

The project IRR in case of using values assumed during the


time of investment decision is 15.06%. The validation team
If the investment cost decreases checked the signed EPC contract /23/, the value is likely
by 35%, the IRR reaches the about 20% lower than the project cost in FSR. According to
the PDD, the project capital costs are sourced from the
benchmark.
Boards approval of investment capital. The probability of a
35% decrease in the total investment cost is unlikely to
happen because the country inflation trend positive in the

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Input value

Variation

01 997 9105067713
Validation teams opinion
recent years. The Indonesias inflation rate is 5.2% in 2010.
(http://www.imf.org/external/pubs/ft/weo/2011/01/weodata/
weorept.aspx?sy=2009&ey=2016&scsm=1&ssd=1&sort=c
ountry&ds=.&br=1&pr1.x=27&pr1.y=12&c=536&s=PCPI
%2CPCPIPCH%2CPCPIE%2CPCPIEPCH&grp=0&a= ),
By applying actual costs available from the signed EPC
contract together with the estimated tariff (from approved
FSR) in the financial calculation spreadsheet, the project
participant justified that the project IRR would reach
18.6%, which is well lower than the benchmark.
Therefore, the project capital costs would be unlikely to
decrease by 35%.

O&M cost

The project is not sensitive to O&M cost at all as even a


100% reduction in O&M cost (which is highly
hypothetical) does not render the project non-additional.
Moreover, with the country experiencing very high inflation
Even the O&M cost decreases by in
2010
and
2011
100%, the IRR still does not (http://www.imf.org/external/pubs/ft/weo/2011/01/weodata/
weorept.aspx?sy=2009&ey=2016&scsm=1&ssd=1&sort=c
reach the benchmark.
ountry&ds=.&br=1&pr1.x=27&pr1.y=12&c=536&s=PCPI
%2CPCPIPCH%2CPCPIE%2CPCPIEPCH&grp=0&a= ),
possibility of any reduction in O&M cost is unlikely to
happen.
The selected Electricity tariff = 656.0 IDR/kWh is sourced
from FSR /11/. This is in line with the REGULATION OF
THE MINISTER OF ENERGY AND MINERAL
RESOURCES NUMBER: 31 YEAR 2009 /41/, article 2.

Electricity
tariff

The validation team conducted survey of other CDM


registered projects (large-scale projects, employing same
methodology, AMS-I.D) /47/ & found that the electricity
If the electricity tariff increases price of the project activity is among the highest ones.
by 47%, the IRR reaches the
No.
Reg No.
Price (IDR/kWh)
Capacity
benchmark.
(MW)
1
3474
432
2.4
2
4021
469.22
10
3
4106
437.17
4.2
4
3580
468.3
8
Proposed project
656
8
Thus it is deemed that the tariff would not experience
dramatic changes by 47% in the near future.

Electricity
supply

According to the finalized FSR /11/, the annual power


generation was estimated according to the long-term
If the annual electricity supply to hydrological data from 1998-2008 for 10 years. The
the grid increases by 47%, the optimum project design has been adopted by the project
IRR crosses the benchmark.
activity, and the project was approved by the the Regent of
Garut /8/. Therefore, the annual electricity generation would
be unlikely to be increased by 47%.

The validation team thus confirms that the sensitivity analysis is in accordance with the Simplified modalities
and procedures for small-scale clean development mechanism project activities /B15/ and the Guidelines on
the Assessment of Investment Analysis, Version 05, EB 62, Annex 5, /B12/. All input parameters used for
sensitive analysis constitute more then 20% of either total project costs or total project revenues. The
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01 997 9105067713

justifications provided by the PP with the veriations of these parameters are been analysed, clarifed and
accepted by the DOE.

3.5.4 Barrier analysis


Not considered in this project

3.5.5 Common practice analysis


According to the approved monitoring methodology AMS-I.D./ Version 17, there is no requirement for common
practice analysis. The project participant does not carry out the common practice analysis in the PDD.

3.5.6 Conclusion of assessment of Additionality


The CDM was seriously considered by the PP. The evidences were transparently reviewed by the validation
team and considered to be effective. Investment analysis and sensitivity analysis clearly demonstrate that the
proposed project activity is financially unattractive. Therefore, the proposed project activity is not business-asusual, i.e. the proposed project activity is additional.

3.6 Monitoring
The project activity applies the approved monitoring methodology AMS-I.D.: Grid connected renewable
electricity generation, Version 17. The selected monitoring methodology is applicable to the project activity as it
utilizes hydropower technology for grid-connected renewable power generation
It has been assessed that the project correctly addresses all factors required by the methodology as provided in
the most recent PDD guidelines /02/. The project monitoring plan is in compliance with the monitoring
methodology AMS-I.D (version 17).
The project participant stated that the CDM training will be carried out before the project operation. The CDM
training plan is not yet available. Thus the validation team cannot conclude that whether the project participant
is capable to implement the monitoring plan as the relevant training program arrangement is not available. DOE
request to address this issue during verification.
See FAR01, Table 3
The validation concludes that the monitoring arrangements described in the monitoring plan are feasible & the
project participants are capable to implement the monitoring plan effectively parameters determined ex-ante as
below.

3.6.1 Parameters determined ex-ante


In the PDD Section B.6.2 listed the following parameters that are determined as ex-ante and available at the
time of validation
Parameter

EFCO 2, grid , y

Value
0.713
tCO2e/MWh

Rev No.: 01 ( 01/11/2011)

Justification as per PDD


Grid Emission Factor.
Report on Grid emission
factor of published by
DNA /30/, /45/

Means of validation
The grid emission factor is correctly determined
according to the tool and it is transparently
documented in the GEF calculation spreadsheet /30/
and Annex 3 of the PDD /02/, the raw data used were
taken from PLN national electricity grid. This have
been demonstrated in Annex 3 of the PDD and cross
checked with the source:
http://pasarkarbon.dnpi.go.id/web/index.php/komnas
mpb/read/20/faktor-emisi-jaringan-listrik-jawamadura-bali-jamali-2010-.html
The validation team concluded that the official data
sources are deemed to be valid and correct.

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8 MW

01 997 9105067713

Installed Capacity of the


project activity

This is confirmed by validation of the Investment


Approval Number: 503/1564/KPM from the Regent
of Garut /8/, approval of UKL-UPL (Environment
Analysis) on Cirompang Mini hydro power plant /10/
from Environment management Division of Garut
Regency, PPA between PT. PLN (Persero) and PT.
Tirta Gemah Ripah on 21 November 2011 /26/. The
validation team concluded it is acceptable.

The validation team confirms that all relevant parameters have been sufficiently considered and the values of the
parameters are real, measureable and conservative.

3.6.2 Parameters monitored ex-post


According to the approved methodology AMS-I.D, version 17, the following parameters will be monitored:
Sl. No.
1
2

Parameters
EGfacility,y

NCVi , y

diesel

FCi , y

Decription
Quantity of net electricity supplied to the grid in year y
Quantity of fossil fuel consumption(diesel) in project activity in a year
Net calorific value of the fossil fuel (i) (diesel) combusted in the project
activity during the year y.
Density of fossil fuel diesel combusted in the project activity

These parameters have been described in the monitoring plan, in which the parameter EGfacility,y will be
measured by the meter systems at the connection point. The main electricity meter for establishing the
electricity delivered to the grid will be installed at the project site using a Metering System that is approved by
PLN. This electricity meter provides the main data for electricity invoicing. The data of net electricity export
will be measured continuously and recorded at least monthly, in which this fulfills the methodology
requirement. The metering systems will be comply with PPA between PT. PLN and PT. TGR for PLTM
Cirompang, dated 28th June 2010 /7/. The accuracy class is 0.2s for main meters. Calibrations are carried out
for the monitoring meters by metrologi association /7, page 18/ at least once per year.
The quantity of fuel combusted FCi,j,y will be be monitored continuously and aggregated monthly, and can be
crosschecked with the fuel purchased invoices.
Weighted average net calorific value of diesel in year y NCVi,y and weighted average CO2 emission factor of
fuel type i in year y EFCO2,i,y will be determined as IPCC 2006 default values of fuel combusted at the upper
limit of the uncertainty at a 95% confidence interval as provided in Table 1.2 of Chapter 1 of Vol. 2 (Energy) of
the 2006 IPCC Guidelines on National GHG Inventories.

Density of fossil fuel diesel combusted in the project activity diesel is taken from regional values available
Project emissions from fossil fuel combustion PEFC,j,y will be calculated based on the quantity of fuel combusted
FCi,j,y multiplying to CO2 emission factor of fuel type.
The GHG indicators, parameters, monitoring methods, frequencies and measurement equipments are acceptable.
The monitoring of emission reductions generated by the project activity will be carried out systematically
according to the monitoring plan. It has been assessed that all parameters required by the methodology have
been included in the PDD under Section B.7.1
The calibration, maintenance of measurement, and monitoring equipments are subjected to procedure
established by the equipment manufacturers.
In summary, the validation team is convinced of compliance of the monitoring plan with the requirements of the
monitoring methodology AMS-I.D Version 17 /B17/. During the on-site assessment, the validation team
interviewed the PP that the monitoring arrangements described in the monitoring plan are feasible within the
project design. The emission reductions resulting from the proposed CDM project activity can be reported ex
post and verified.

3.6.3 Management system and quality assurance


The DOE validation team has assessed the proposed management system and how does the quality will be
assured in the proposed project activity. The outline of the operational procedure was briefly described in the
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01 997 9105067713

PDD. The operational procedure will be updated by the project participant as required during the operation of
the project activity. The monitoring and recording of the required parameters will be carried out by trained
personnel.
All measurements will rely upon calibrated measurement equipment that will be maintained regularly and
checked for its functioning which will meet the minimum requirement of the methodology.
Hence, all indicators of importance for controlling and reporting of projects performance have been
incorporated in the monitoring plan as well as indicated in the planned formal set of monitoring protocol and
work instructions.
The validation team has also reviewed the Management and operational structure for monitoring in the PDD
/02/ & has been confirmed that the designated personnel & their responsibility has been defined clearly with
respect to the key monitoring features.
The application of the monitoring methodology is transparent and the validation team considers the project
participants able to implement the monitoring plan.

3.7 Sustainable Development


The project is considered to be contributing to sustainable development in the host country (Indonesia), by
utilizing the hydro energy for electricity power generation, and mitigating the environmental pollution caused
by operation of fossil fuel-fired power plants. Several more benefits would be expected by implementation of
the project activity, which includes improvement in the local economy & overall social development.
The project participant has submitted an Environment Management (UKL) and Environment Planning(UPL)
Procedure to Badan Pengelolaan Lingkungan Hidup, Pemerintaah Kabupaten Garut (Local Government
Environment Department) for approval /10/ on 2nd September 2010.
The validation team concluded that the project contributes to sustainable development based on its local
expertise and the confirmation of the same from the host party DNA Indonesia /3/.

3.8 Environmental Impacts


The project participant has provided description of environmental impacts in section D.1 of the PDD.
The project participant has provided a comprehensive description covering the project activitys impact on water
use, soil use, air, noise, environment, and ecological impacts. The validation team reviewed and concluded that
the description is sufficient. The validation team checked the description for its appropriateness and confirms
that the project is not likely to create any adverse environmental effects.
As for the environmental impacts due to project activity on the local area, the project participant submitted an an
Environment Management (UKL) and Environment Planning(UPL) Procedure, which includes potential
environmental impacts by the proposed project to the neighboring area and measures taken to minimize the
identified impacts.
Environment Management (UKL) and Environment Planning(UPL) Procedure has been submitted to the
authority for approval /10/. The project participant has provided a comprehensive description covering the
project activitys impacts on air, noise, and environment impacts in the Environmental Compliance
Commitment /10/. The validation team reviewed and concluded that the description is sufficient. It is also
required that the project participants have to monitor environmental quality (air, and waste water) and report to
local authority periodicly. The validation team checked the description for its appropriateness and confirms that
the project is not likely to create any adverse environmental effects.
The proposed CDM project activity results to land acquisition of 135 local households which was appropriately
compensated by project participant in presence of representative of local authority (CAMAT) according to the
local applicable regulations and it is also verified by the validation team during on site visit by interviewing
CAMAT and local effected residents and found satisfactory. During the on-site interview, the local residents
stated that there was no significant impact to their living environment, and the project activity does not cause
adverse effect to their daily life. They also satisfied with the compensation arrangement and compensation
payment has been received as arranged by CAMAT /34/, /35/.
Compensation plan was approved by Garut Regency and Land Use Permit No. 503/088/007-IPPT/PPTSP/2011
was granted on 07th March 2011 by Integrated Licensing Service Office Division of Garut Regency.
The PDD correctly describes the project activitys environmental impacts and mitigation methods based on the
Environment Management (UKL) and Environment Planning(UPL) Procedure conducted and the environmental
impacts are not deemed to be significant.
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01 997 9105067713

3.9 Local Stakeholder Consultation


According to the PDD and as stated from the project participant, the local stakeholder consultation was carried
out by the project owner on 15th April 2011 at Kantor Kecamatan Bungbulang, Garut /21/. The local
stakeholders were invited through advertisement on newspaper and invitation letters /20/. The consulted
stakeholders included the representatives from local authorities, organizations and local villagers with different
genders, age groups, educational backgrounds and occupations /20/, /21/. From the background of the
stakeholders, it is reasonably believed that the survey could reflect the general attitudes towards the project from
the local residents who were possibly affected by the project.
During the on-site visit, the representatives from local people, community and Bungbulang subdistrict were
interviewed /I02/. In general, the interviewees showed adequate understandings of the nature of the project and
think that the project implementation would not affect their daily life. They have also received the compensation
payment, and were satisfactory with the compensation arrangement between the project owner and the local
effected people. The interviewees considered that local social and economic development would be benefited
from the project activity, due to the road improvement and employment enhancement. The overall responses
were supportive to the implementation of the project.
The representative from Bungbulang subdistrict also stated that they did not receive any adverse comment
about the project activity from the residents.
TUV Rheinland considers the local stakeholder consultation carried out adequately.

3.10 Comments by Parties, Stakeholders and NGOs


The PDD version 1.0 of date 25/10/2011 was made publicly available on
(http://cdm.unfccc.int/Projects/Validation/DB/SUR9HKNAP41T61LH2C8NRIHOM2M7L9/view.html ) from 9
December 2011 to 7 January 2012 in order to invite comments from public stakeholders.
No public comments have been received during that period.

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01 997 9105067713

Appendix A
CDM Validation Protocol
Project Title and Location
Report No. 01 997 9105067713

Rev 01 (2011-11-01) ,

Version No.:02

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01 997 9105067713

Table 1:
Validation requirements
(based on 37 of the CDM Modalities and Procedures and on CDM Validation and Verification Manual version 1.2)
Findings, comments,
Checklist question
Ref.
MoV1
references, data sources
1.
Approval(VVM V E.1)
1.1 Have Letters of Approval have been
VVM
provided from all involved Parties?
Art. 44 to
If yes, indicate:
50
when and by which Party the LoA has been
/02/
issued, with a clear reference to the LoA itself
/03/
and any supporting documentation;
whether the LoA was provided to the DOE by
the project participants or directly by the
DNA;
the means of validation employed to assess the
authenticity of the document; and
by a clear statement, that the DOE considers
the LoA to be valid.
1.2 Are all Parties, who issued the LoA,
VVM
Parties to the Kyoto Protocol and is this
Art. 45
stated in the LoA?
/02/
/03/
1.3 Is every LoA from the Parties involved
VVM
issued by an organisation listed as
Art. 47
Designated National Authority (DNA) on
/02/
the UNFCCC web site?
/03/
Indicate the official name of the DNA and
contact person name.

DR, I

DNA of Indonesia has issued the Letter of Approval (LoA) /03/


to authorize TGR as voluntary project participant.

Draft
Final
conclusion conclusion
CAR 02

However, the Letter of Approval (LoA) from the DNA of


Kingdom of Sweden is not yet received for confirming the
voluntary participation of RWE Power AG.
See CAR 02, Table 2

DR, I

See above

CAR 02

DR

See above

CAR 02

MoV = Means of Verification, DR = Document Review, I = Interview, www = internet search.

Rev 01 (2011-11-01) ,

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01 997 9105067713

1.4 Is the participation in the CDM project


activity voluntary and is this stated in all
LoAs?
Indicate the source of proof.

VVM
Art. 45
/02/
/03/

DR

See above

CAR 02

1.5 Is the LoA unconditional with respect to


1.2 to 1.4?

VVM
Art. 46
/02/
/03/

DR

See above

CAR 02

1.6 Is the title of the CDM project activity as


given in the PDD identical with the title
given in all LoAs and Modalities of
Communication?
Provide Yes/No answer, and include details
into Tables 2, 3 and 4 accordingly.
1.7 If any of provided LoAs contains
additional specification of the CDM
project activity (PDD version number,
validation report version number, amount
of ER, etc.) are those specifications valid
and consistent with other documents?
1.8 Does the project activity involve any
public funding from Annex I Parties? If
yes, has Annex I Party provided a written
confirmation that the use of such funding
does not lead to the diversion of the
official development assistance.
2.
Participation (VVM V E.2)

VVM
Art. 45
/02/
/03/

DR

See above

CAR 02

VVM
Art. 50
/02/
/03/

DR

See above

CAR 02

/29/

DR, I

See above
CL 04
Please kindly provide supporting documents to substantiate no
public funding in the project activity

CAR 02
CL 04

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01 997 9105067713

2.1 Are the Parties and project participants


VVM
(PP) listed in the section A.3 of the PDD
Art. 51 to
correctly and is this information consistent
54
with the contact details provided in Annex
/02/
1 of the PDD?
/03/

DR, I

The LoA from the host party (Indonesia) was not provided yet.
CAR 01
1.1) The project participants name (PT. Tirta Gemah Ripa) is
inconsistent between sections A.2., A.3., B.8. and Annex 1
1.2) Kindly provide the applicable supporting documents to
substantiate the following statement: With annual 8,760
operating hours the project is expected to generate net
electricity 47471 MWh/year and expected to bring about GHG
emission reductions of approximately 33,846 tCO2e annually.
CAR 02: Please provide the LoAs of Host Country and Annex I
Country for validation

CAR 01
CAR 02

2.2 Has every Party involved approved the


VVM
participation of each corresponding PP,
Art. 51 to
either by means of a LoA or by a separate
54
written document?
/02/
Indicate Yes / No answer and describe all
/03/
inconsistencies in the Tables 2, 3 and 4
accordingly.
2.3 Do all participating Parties fulfil the
VVM
participation requirements as follows:
Art. 51 to
a) Party has ratified the Kyoto Protocol
54
b)Party has designated a Designated
/02/
National Authority
/03/
c) The assigned amount has been
determined

DR, I

See above

CAR 02

DR, I

See above

CAR 02

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2.4 Do the letters of approval meet the


VVM
following requirements?
Art. 51 to
a) LoA confirms that Party has ratified the
54
Kyoto Protocol
/02/
b) LoA confirms that participation is
/03/
voluntary
c) The LoA confirms that the project
contributes
to
the
sustainable
development of the host country?
d) The LoA refers to the precise project
activity title in the PDD
In case of doubt regarding the authenticity of
the letter of approval, describe how it was
verified that the letter of approval is authentic
3.
Project Design Document (VVM V E.3)
3.1 Is the PDD presented for validation based
VVM
on the latest template available at the
Art. 55 to
UNFCCC website?
57
Indicate Yes / No answer and describe all
/02/
inconsistencies in the Tables 2, 3 and 4
accordingly.

Rev 01 (2011-11-01) ,

01 997 9105067713

DR, I

DR

See above

Yes. The Project Design Document (Version 2.1 dated 25th


May 2012) is based on the latest template available at the
UNFCCC website in accordance with the applicable guidance
document.

Version No.:02

CAR 02

OK

OK

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Validation Report

3.2 Has the PDD been established in


VVM
accordance with the CDM requirements
Art. 55 to
for completing PDDs issued by the CDM
57
EB?
/02/

4.

01 997 9105067713

DR, I

The PDD has not established as requirements for completing


PDDs issued by the CDM EB.
CAR 03
3.1) Please provide the coordinates of the dam and powerhouse
in 4 decimal points
3.2) Please specify the project location
CAR 05
5.1) Spelling mistakes on year 1 and year 4
5.2) The template of table under A.4.3 is inconsistent versus
with the format template published by UNFCCC
CAR 13
13.1) The template of table in section B.6.4 is inconsistent
versus the guidelines published by UNFCCC
13.2) Year 3 and year 4 of the table are incorrect

CAR 03
CAR 05
CAR 13

OK

Project Description (VVM V E.4)

Rev 01 (2011-11-01) ,

Version No.:02

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Validation Report

4.1 Does the PDD contain a description,


VVM
which provides the reader with a clear
Art. 58 to
understanding of the precise nature of the
64
project activity and the technical aspects
/02/
of its implementation?
/11/
4.1b) Is the description (incl. any process
flow-charts, Spreadsheets etc.) complete,
/23/
coherent and consistent with the
provisions of the monitoring plan?
4.1c) Is the projects location clearly defined?

Rev 01 (2011-11-01) ,

01 997 9105067713

DR

A description is contained in PDD but some clarifications of the


precise nature of the project activity and technical aspects of its
implementation are required.
CAR 04
4.1) Please indicate the unit of turbine speed
4.2) Please provide the supporting documents from the turbine
and generator manufacturer for validation of project lifetime
and technical specifications including the rated capacity
4.3) Please include key parameters of generators in section
A.4.2
4.4) Please include a description of how environmentally safe
and sound technology and know how is being applied by the
project activity
4.5) Please provide documents to substantiate capacity factor
4.6) PDD does not explain clearly whether the project activity
would import electricity from Jamali grid in the event of
emergency, shut down for maintenance,
CL 01 Through interviews with project participant and review
of Agreement between PT. TGR with GP3A DI Cirompang
dated 11th Aug 2011, it was confirmed that the project
participant is allowed to use the dam owned by Garut Regency
until the PPA between the project participant and PLN is no
longer valid (i.e. for 15 years), please clarify what will happen
with the project facilities (powerhouse, tunnel, channel, etc)
when that Agreement and PPA become invalid.
CL 02 Please provide the supporting information from the
turbine and generator manufacturer for the validation of project
lifetime and technical specifications including the rated capacity
CL 03 Please clarify who is the owner of the existing dam and
whether the project participant was approved to build a channel
at the existing dam to take water for power generation. Please
clarify whether the existing dam is modified when
implementation of project activity

Version No.:02

CAR 04
CL 01
CL 02
CL 03

OK

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Validation Report

4.2 In the case of greenfield project activity, is


VVM
the project design described sufficiently
Art. 58 to
by means of specifications, drawings and
64
manuals?
/02/
Provide Yes/No answer and indicate the
documents which have been reviewed in
relation to the issue.
4.3 Does the project activity reflects current
VVM
good practices, uses state of the art
Art. 58 to
technology or would the technology result
64
in a significantly better performance, than
/02/
any commonly used technologies in the
host country?
Provide the description of how validation has
been carried out and what comparisons have
been made.
4.4 In cases where the project activity involves
VVM
the alteration of an existing installation or
Art. 53
process, does the PDD provide a clear
/02/
description of the differences between the
project and the pre-project scenario?
Please, provide Yes/Now answer and update
Tables 2, 3 and 4 accordingly, if there is
anything unclear in the provided description.

Rev 01 (2011-11-01) ,

01 997 9105067713

DR, I

DR

DR, I

The project is a greenfield project activity. During the on-site


validation, the construction of the proposed project is in
progress. The validation team considers the project design is
insufficiently described by means of specifications and
drawings. Please refer to 4.1 of Table 1 for details.

CAR 04
CL 01
CL 02
CL 03

OK

The PDD does not clearly describe whether the project activity
reflects current good practices, uses environmentally safe and
sound technology.
Please refer to 4.1 of Table 1 for details.

CAR 04
CL 01
CL 02
CL 03

OK

OK

OK

N/A. According to validation teams site visit and on site


interview with project participant, the project activity did not
involve the alternation of existing installation or process.

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4.5 What type is the project?


VVM
i) Project in existing facility or utilizing
Art. 58 to
existing equipment(s)
64
ii) Project is either a large scale project or a
/01/
non-bundled small scale project with
/02/
emission reductions exceeding 15 000
tCO2e per year. In this case, a site visit
must be performed.
iii) Project is a bundled small scale project,
with each project in the bundle with
emission reductions not exceeding 15,000
tCO2e per year. In such case the number of
physical site visits may be based on
sampling, if the sampling size is
appropriately justified through statistical
analysis.
iv) The project is an individual small scale
project activity with emission reductions
not exceeding 15 000 tCO2e per year. In
this case, DOE may not conduct a physical
site visit as appropriate.
v) Greenfield project
4.6 How was the design of the project
VVM
assessed?
Art. 58 to
i) Physical site inspection
64
ii) Reviewing available designs and
/01/
feasibility studies
/02/
If a physical site inspection is not undertaken,
justify why no site visit was undertaken:
4.7 Does the project qualify as a small scale
VVM
CDM project activity as defined in
Art. 58 to
paragraph 6(c) of decision 17/CP.7 on the
64
modalities and procedures for the CDM?
/01/
/02/

Rev 01 (2011-11-01) ,

01 997 9105067713

DR

The Project activity is a non-bundled small scale project with


emission reductions of 33,847 tCO2e per year which is higher
than 15 000 tCO2e per year. The site visit was performed.

OK

OK

DR

The design of the project was assessed by physical site


inspection and reviewing available design documents and
feasibility studies

OK

OK

DR

Yes, its qualified as a small scale CDM project activity

OK

OK

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01 997 9105067713

DR
4.8 Is the small scale project activity a
VVM
debundled component of a larger project
Art. 58 to
activity in accordance with the rules
64
defined in appendix C of the simplified
/01/
modalities and procedures for small-scale
/02/
CDM project activities?
A proposed small-scale project activity shall
be deemed to be a debundled component of a
large project activity if there is a registered
small-scale CDM project activity or an
application to register
another small-scale CDM project activity:
(a) With the same project participants;
(b) In the same project category and
technology/measure; and
(c) Registered within the previous 2 years;
and
(d) Whose project boundary is within 1 km of
the project boundary of the proposed smallscale activity at the closest point.
5.
Baseline and Monitoring methodology(VVM V E.5)
5.1
General requirements
5.1.1 Is the methodology used in the project
VVM
DR
activity approved by the CDM EB and
Art. 65 to
is the selected version still valid?
67
If during the course of validation the
/02/
originally applied version of the methodology
expires, a CAR shall be raised in Table 3 of
the validation protocol. Any new requirements
of the revised version of the methodology not
yet validated in Table 2 of the validation
protocol shall be validated in Table 3 as part
of the assessment of the CAR raised.
5.2 Applicability of the selected methodology

Rev 01 (2011-11-01) ,

No, it is not a debundled component of a larger project activity

OK

OK

Yes. The methodology used in the project activity is approved


by the CDM EB and the selected version is still valid.

OK

OK

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01 997 9105067713

5.2.1 Does the project activity qualify under


VVM
the criteria for small-scale CDM project
Art. 68 to
activities set out in 6 (c) of decision
77
17/CP.7 and Annex II of the Modalities
/02/
and Procedures for the CDM?
Please provide Yes/No response and
description of how this was validated.
In case of calculated emission reductions
varying over time, SSC-applicability limits
must be met for every single year in any of the
max. 3 subsequent crediting periods.
5.2.1a) If the project applies a small-scale
methodology, does the project also
comply with the general guidelines to
SSC CDM methodologies, which
provides guidelines on equipment
capacity,
equipment
performance/lifetime,
baseline
identification for type-II/III Greenfield
project activities, sampling and other
monitoring-related issues?

DR, I

Yes. The project activity qualifies the criteria for SSC project
activities as below:
The project activity consists of a run-of-river diversiontype hydropower project which generates electricity by
utilizing the renewable hydro resource, which supplies
electricity to and displaces electricity from the national
electricity distribution system, i.e. Jamali grid which
mainly comprises fossil fuel-fired power plants which have
been supplied by at least one fossil fuel fired generating
unit;
The project activity is implemented in an existing
reservoir with no change in the volume of reservoir;
The total installed capacity of the project activity is
8MW, which does not exceed the threshold of 15MW for
small-scale CDM project;
The project activity does not involve heat recovery and
co-fired fossil fuel, thus it is not a combined heat and
power (co-generation) system;
The project activity (i) does not involve the addition of
renewable energy generation at an existing facility or (ii)
does not seek to retrofit or modify an existing facility.

OK

OK

5.2.1.1 If yes, does the PDD extensively


VVM
demonstrates and confirms that the
Art. 68 to
small-scale project activity is not a
77
debundled component of a larger
/02/
project?
Please indicate Yes/No answer. In case of
positive conclusion provide details of the
validation measures taken and data found
during the procedure. Otherwise amend the
Tables 2, 3 and 4 accordingly.

DR, I

According to the information from UNFCCC, there is no


registered small-scale CDM project activity or any application
to register another CDM small-scale CDM project activity by
the project participant, i.e. TGR or NEFCO within the previous
two years with the same project category and technology within
1 km of the project boundary of the project activity. As stated
by the project proponent, the project activity obtains the
diverted water for power generation from the existing reservoir
on Cirompang river of Garut Regency. The project activity is
the only hydropower plant in the Cirompang. The project
proponent also reported that this is the first hydropower project
invested by NEFCO. Thus, the project activity is not deemed to
be a de-bundled component of a large scale project activity.

OK

OK

Rev 01 (2011-11-01) ,

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01 997 9105067713

5.2.2 Are all applicability conditions of the


selected baseline and monitoring
methodology and all tools involved
satisfied by the project activity?
Please indicate Yes/No answer. In case of
positive conclusion provide details of the
validation measures. Otherwise amend the
Tables 2, 3 and 4 accordingly.

VVM
Art. 71
/02/

DR

Applicable conditions included in the applied methodology and


tools referred are required to be justified in the relevant sections
of the PDD.
CAR 06
6.1) Footnote No. 2 is missing
6.2) Version of Tool to calculate the Emission Factor for an
electricity system specified in PDD is outdated (EB 61)
6.3) Tool for the demonstration and assessment of
additionality (Version 05.2) (EB39 Annex 10) is missing
CAR 07
7.1) Paragraph Illustration of respective situations under
Spelling mistakes at e.g. grid imp rt, the user end
xcess, electricity company of Indoensia
7.2) Paragraph Hydro power plants with reservoirs that
Justification for this criterion is incorrect. During site visit and
through interviews with project participants, it was confirmed
that the project activity is implemented on an existing reservoir
and dam. The justification is requested to be more accurate and
detailed.
7.3) Version 16 of Methodology AMS I.D, EB 54 is outdated

CAR 06
CAR 07

OK

5.2.3 Is the selection of the applied baseline


and monitoring methodology justified?

VVM
Art. 71
/02/

DR

See above

CAR 06
CAR 07

OK

5.2.4 Is the selected methodology correctly


quoted in all related documents?

VVM
Art. 71
/02/

DR

See above

CAR 06
CAR 07

OK

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01 997 9105067713

5.2.5 Does the PDD sufficiently describe all


VVM
the GHG emission sources or sinks
Art. 77
occurring as a result of project activity,
/02/
which have not been accounted for
under the selected methodology and are
expected to contribute more than 1% of
the overall expected average annual
emission reductions?
Provide Yes/No answer. Indicate the sources
or sinks of GHG, which were proved to be
negligible. Otherwise amend the Tables 2, 3
and 4 accordingly.
5.3
Project boundary
5.3.1 Does the PDD correctly describe the
VVM
project boundary? Are they clearly
Art. 78 to
defined and in accordance with the
80
methodology?
/02/
Provide Yes/No answer. And amend the
/11/
Tables 2, 3 and 4, if needed.

DR

Yes. The GHG emissions occurring within the proposed CDM


project activity boundary as a result of the implementation of
the proposed CDM project activity is negligible, and assumed
to be zero in project emissions and leakage, thus it is considered
to contribute less than 1% of overall expected average annual
emission reductions.

OK

OK

DR

No, the PDD does not describe the project boundary correctly.
CAR 08
8.1) The project boundary shall include Jamali grid as
description in sections A.2 and A.4.2 of the PDD
8.2) Please kindly confirm whether the existing reservoir and
dam is included in the project boundary or not
8.3) PDD does not explain clearly whether the project activity
would use any backup diesel gen set in the event of emergency
etc?

CAR 08

OK

5.3.2 Does the PDD correctly indicate and


describe the emission sources and sinks
of GHG gases that are included in the
project boundary?

VVM
Art. 79
/02/
/11/

DR

See above

CAR 08

OK

5.3.3 In cases where the methodology allows


project participants to choose whether a
source or gas is to be included in the
project boundary, is the choice
explained and justified by PPs?

VVM
Art. 80

DR

See above

CAR 08

OK

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01 997 9105067713

5.3.4 Does the project involve other emissions


VVM
sources
not
foreseen
by
the
Art. 78 to
methodologies that may question the
80
applicability of the methodology? Do
/01/
these sources contribute with more than
/02/
1% of the estimated emission reductions
/11/
of the project?
5.4
Baseline identification
5.4.1 Has the procedure contained in the
VVM
selected methodology to identify the
Art. 81,
most reasonable baseline scenario been
82
applied correctly and documented in the
PDD?

DR, I

5.4.1.1 Is the identified baseline scenario


plausible?

VVM
Art. 82

5.4.1.2Are all assumptions stated in a


transparent and conservative manner?
5.4.2 Does the selected methodology require
the use of tools and does PDD reflects
that correctly?

Rev 01 (2011-11-01) ,

OK

OK

Baseline identification as of AMS-I.D., Version 17 has not been


clearly described in PDD.
CAR 09
The statement Hence in the project scenario the electricity
delivered to the Jamali grid by the project activity would have
otherwise been generated by the operation of grid connected
power plants and by the addition of new generation sources is
incomplete
CL 06
Kindly clarify whether the name of person / entity determining
baseline and monitoring methodology is correct

CAR 09
CL 06

OK

DR, I

See above

CAR 09
CL 06

OK

VVM
Art. 82

DR, I

Yes, all assumptions stated are in a transparent and conservative


manner.

OK

OK

VVM
Art. 82

DR, I

Yes, the selected methodology requires the use of Tool to


calculate the emission factor for an electricity system and is
correctly reflected in the PDD.

OK

OK

DR

No

Version No.:02

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Validation Report

01 997 9105067713

5.4.2.1 Were all the tools applied correctly?

VVM
Art. 82

DR, I

Tool to calculate the emission factor for an electricity system


was not applied correctly.
CAR 11
11.1) The below link can not be accessed:
http://dna-cdm.meth.go.id/en/database/
Please provide the raw data and calculation of emission factor
for validation and please document the calculation of the
operating margin and build margin emission factors as
requirement in section III (page 20) of the Tool.
Please clarify version of the Tool is applicable for calculation.
11.2) It was justified in section B.6.1 of the PDD that the
project has no reservoir and PEy = 0. This justification is
incorrect as the project activity is implemented on an existing
reservoir and dam.

CAR 11

OK

5.4.3 In case the methodology requires


several alternative scenarios to be
considered in the identification of the
most reasonable baseline scenario, have
all scenarios been considered and have
no reasonable alternative scenario been
excluded?
5.4.3.1 Has the choice of the baseline
scenario been done using conservative
assumptions?

VVM
Art. 83
/02/

DR

The methodology does not require several alternatives scenarios


to be considered in the identification of the most reasonable
baseline scenarios.

OK

OK

VVM
Art. 84
/02/

DR

Justification for baseline identification was not clear.


CAR 09
The statement Hence in the project scenario the electricity
delivered to the Jamali grid by the project activity would have
otherwise been generated by the operation of grid connected
power plants and by the addition of new generation sources is
incomplete

CAR 09

OK

5.4.4 Is the identified baseline scenario


reasonable
according
to
the
assumptions, calculations and rationales
used in the PDD and other reference
sources?

VVM
Art. 84
/02/

DR

See above.

CAR 09

OK

Rev 01 (2011-11-01) ,

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01 997 9105067713

5.4.6 Does the PDD describe how the national


VVM
DR
See above.
and sectoral policies, macro-economic
Art. 85
trends and political aspirations relevant
87
to the baseline scenario have been
/02/
identified and considered in the PDD?
5.4.7 Does the PDD provide a verifiable
VVM
DR
See above.
description of the identified baseline
Art. 86,
scenario, including a description of the
88
technology that would be employed
/02/
and/or the activities that would take
place in the absence of the project
activity?
5.5
Algorithm and/or formulae used to determine emission reductions
5.5.1 Are all calculations applied and
VVM
DR
Equations used for calculation are not documented in a
documented according to the selected
complete and transparent manner
Art. 89 to
methodology and in a complete and
93
CAR 12
transparent
manner to calculate
/02/
12.1) Calculation of Baseline emissions (BEy) is incorrect
emission reductions from the project
12.2) Please clarify LEy or LEy,exante
activity?
5.5.1b) Are correct units applied and
consistency
between
parameter
dimensions and parameter value
ensured?
See also Question 4.1.b) with respect to
consistency of parameter values between
calculation spreadsheets and PDD.
5.5.2 In case the methodology allows a
VVM
DR
Equations of the applied methodology and tools in calculating
selection between different options for
emission reductions are not clearly stated in PDD.
Art. 89 to
equations or parameters, has adequate
93
justification been given and have the
/02/
correct equations and parameters been
used, in accordance with the
methodology selected?

Rev 01 (2011-11-01) ,

Version No.:02

CAR 09

OK

CAR 09

OK

CAR 12

OK

CAR 12

OK

Page 69

Validation Report

5.5.3 In case some data and parameters will


VVM
not be monitored throughout the
Art. 89 to
crediting period, but have already been
93
determined and fixed, are all data
/02/
sources, assumptions and calculations
correct, applicable to the proposed
CDM project activity and conservative?
5.5.4 In case data and parameters will be
VVM
monitored on implementation and hence
Art. 89 to
become available only after validation
93
of the project activity, are the estimates
/02/
provided in the PDD for these data and
parameters reasonable?
5.5.5 Have the major risks and uncertainties,
VVM
which can influence the emission
Art. 89 to
reduction estimates, been identified and
93
addressed in the PDD?
/02/
5.5.6 Are the calculations documented
VVM
according to the approved methodology
and in a complete and transparent Art. 89 to
manner in calcualting the project
93
emissions?
Have
conservative
/01/
assumptions been used when calculating
/02/
the project emissions?
5.5.7 Are uncertainties in the project emission
VVM
estimates properly addressed?
Art. 89 to
93
/01/
/02/
5.6
Leakage

Rev 01 (2011-11-01) ,

01 997 9105067713

DR

See above.

CAR 12

OK

DR

See above.

CAR 12

OK

DR

Yes, the major risks and uncertainties have been identified and
addressed in the PDD

OK

OK

See above

OK

OK

See above

OK

OK

DR

DR

Version No.:02

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Validation Report

5.6.1 Has the leakage been identified and


VVM
calculated according to the approved
Art. 89 to
methodology?
93
/02/

01 997 9105067713

DR

Yes. There is no transfer of energy generating equipment from


another activity and the project participant did not transfer any
existing equipment to another activity because the hydro power
plant is a new facility. As per AMS-I.D., Version 17, leakage is
identified as not required to be considered and is assumed as
zero.

5.6.2 Have the leakage been addressed in


VVM
DR
Yes, see above.
complete,
conservative
and
Art. 89 to
substantiated manner?
93
/02/
5.6.3 Are uncertainties in the leakage
VVM
DR
Yes, see above.
emission estimates properly addressed?
Art. 89 to
93
/02/
6.
Methodology-related issues for afforestation or reforestation CDM project activities
Add specific A/R requirements if applicable!
Not applicable for this CDM project activity
7.
Additionality (VVM V E.6)
7 a) What approach/tool does the project use
to assess additionality? Is this in line
with the methodology? In case of smallVVM
scale CDM project activities, is
Attachment A to Appendix B of the simplified modalities and
Attachment A to Appendix B of the Art. 94 to
procedures for small-scale CDM project activities /B5/, Nonsimplified modalities and procedures for
DR
97
binding best practice examples to demonstrate additionality for
small-scale CDM project activities
/01/
SSC project activities /B8/ are applied to assess additionality
applied considering also the Non/02/
binding best practice examples to
demonstrate additionality for SSC
project activities.
7 b) Have the regulatory requirements
Not applicable
VVM
correctly been taken into account to
evaluate the project activity and the Art. 94 to
DR
97
alternatives? Is sufficient evidence
/01/
provided to support the relevance of the
/02/
arguments made?
Rev 01 (2011-11-01) ,

Version No.:02

OK

OK

OK

OK

OK

OK

O.K.

O.K.

OK

OK

OK

OK

Page 71

Validation Report

01 997 9105067713

VVM
7 c) What is the project additionality mainly
Art. 94 to
based on (Investment analysis or barrier
DR
97
analysis)?
/01/
/02/
7.1
Prior consideration of the CDM (VVM V E.6.III.a)
7.1.1 Is there documented evidence provided
VVM
DR, I
by the project participants on how and
Art. 98 to
when the decision to proceed with the
104
project activity was taken?
/02/
/32/

Rev 01 (2011-11-01) ,

Investment analysis is considered

The timeline of the project implementation is not yet


documented clearly in PDD.
CAR 10
10.1) Please provide approved Feasibility Study Report and
other data sources for validation of financial / technical
parameters specified in section B.5 and Financial Spreadsheet
10.2) What is the investment decision date?
PDD does not include this information transparently
10.3) Please provide the prior CDM consideration
notification sent to UNFCCC and Host party DNA for
validation
10.4) Legend of D/V is incorrect
10.5) Worksheet Assumption
The project participant is requested to provide the reference
sources for the determination of Power tariff, Time span for
assessment period, Income Tax Rate, Depreciation,
Exchange Rate, Contingency, IDC
Values for calculation of Net energy supplied to the grid are
not traceable. Please clarify?
10.6) Worksheet Cashflow
Values of 41.7461%, 20.5055% are not traceable. Please
clarify?
Please provide data source and substantiate the Salvage value

Version No.:02

OK

OK

CAR 10

OK

Page 72

Validation Report

01 997 9105067713

VVM
Art. 98 to
104
/02/
/32/

DR, I

The timeline of the project implementation is not yet


documented clearly in PDD.
CAR 10
10.1) Please provide approved Feasibility Study Report and
other data sources for validation of financial / technical
parameters specified in section B.5 and Financial Spreadsheet
10.2) What is the investment decision date?
PDD does not include this information transparently
10.3) Please provide the prior CDM consideration
notification sent to UNFCCC and Host party DNA for
validation
10.4) Legend of D/V is incorrect
10.5) Worksheet Assumption
The project participant is requested to provide the reference
sources for the determination of Power tariff, Time span for
assessment period, Income Tax Rate, Depreciation,
Exchange Rate, Contingency, IDC
Values for calculation of Net energy supplied to the grid are
not traceable. Please clarify?
10.6) Worksheet Cashflow
Values of 41.7461%, 20.5055% are not traceable. Please
clarify?
Please provide data source and substantiate the Salvage value

7.1.2 Is the starting date of the project activity,


VVM
reported in the PDD, in accordance with
Art. 98 to
the Glossary of CDM terms and CDM
104
VVM (99)?
/02/
Note: Confirm the starting date indicated in
/22/
C.1. is consistent within the PDD, in
particular with respect to the project
/23/
implementation history.

DR, I

The project starting date was 04th August 2011 when the EPC
contract for construction of the proposed project was signed.

Rev 01 (2011-11-01) ,

Version No.:02

CAR 10

OK

OK

OK

Page 73

Validation Report

7.1.3 Is the date stated in the provided


VVM
evidence consistent with other available
Art. 98 to
evidence (e.g. dates of construction,
104
purchase orders for equipment)?
/02/
7.1.4 If the project was not published and the
VVM
starting date is on or after 2nd August
Art. 98 to
2008, was it possible to receive from
104
UNFCCC secretariat and DNA a written
/02/
confirmation that PPs previously
informed the above entities on
commencement of the project activity
and of their intention to seek CDM
status?
Note: in case where PP has only informed
DNA or UNFCCC, check if the project start
date was under the first version of the prior
consideration of the CDM guidelines
7.1.5 For the project activities with a starting
VVM
date before 2nd August 2008 and before
Art. 98 to
the actual publication, was there enough
104
evidence presented to prove that PPs
/02/
were previously aware of CDM?
7.1.6 For the project activities with a starting
VVM
date before 2nd August 2008 and before
Art. 98 to
the actual publication, was there enough
104
evidence presented to prove that CDM
/02/
benefits have been a decisive factor in
the decision to proceed with the project
activity?

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01 997 9105067713

DR, I

The project starting date was 04th August 2011 when the EPC
contract for construction of the proposed project was signed.

DR, I

As reported in the Section B.5 of the PDD, the project


participant submitted an official letter to the Indonesia DNA for
notification of CDM project on 09th March 2011. Please
provide official notification letter to the Indonesia DNA for
validation.

OK

OK

CAR 10

OK

DR

Not applicable.

OK

OK

DR

Not applicable.

OK

OK

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Validation Report

7.1.7 Does the individual or body that took


VVM
the decision to proceed with the project
Art. 98 to
activity have/had the authority to do so?
104
/02/
/14/
7.1.8 For the project activities with a starting
VVM
date before 2nd August 2008 and before
Art. 98 to
the actual publication, was there enough
104
evidence presented to prove that PPs
/02/
were taking continuing and real actions
to secure CDM status for the project in
parallel with its implementation?
7.1.9 In case there is a significant gap
VVM
between the start date of the project
Art. 98 to
activity and the commencement of
104
validation, how was it possible for the
/02/
project participant to commit funds to
/11/
the project in advance of receiving a
positive validation opinion?
7.1.10 How has the starting date of the project
VVM
activity been determined? What are the
Art. 98 to
dates of the first contracts for the project
104
activity?
When
was
the
first
/01/
construction activity?
/02/
/23/
7.1.11 Is the stated expected operational
VVM
lifetime of the project activity
Art. 98 to
reasonable?
104
/01/
/02/
/23/

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01 997 9105067713

DR

Board of Director decided to implement the project. Board of


Director was authorized to take such decisions.

OK

OK

DR

Not applicable.

OK

OK

DR

During interview with project participant, offer for bank loan


was received; the project participant is considering signing
contract for bank loan to secure the project funding.

OK

OK

DR

The starting date of the project activity been determined as the


date of equipment contract /06/ for the project activity

OK

OK

DR

The expected operational lifetime of 20 years of the project


activity is substantiated

OK

OK

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7.1.12 Is the crediting period start date, the


VVM
type (renewable/fixed) and the length of
Art. 98 to
the crediting period clearly defined and
104
reasonable?
/01/
/23/
7.2
Identification of alternatives(VVM V E.6.III.b)
7.2.1 Does the PDD identify and list credible
VVM
alternatives to the CDM project activity
Art. 105
in order to determine the most realistic
to 107
baseline scenario, unless selected
/02/
approved
methodology
prescribes/identifies
the
baseline
scenario and no further analysis is
required?
7.2.2 Does the list of alternatives include as
VVM
one of the options that the project
Art. 105
activity is undertaken without being
to 107
registered as a CDM project activity?
/02/
7.2.3 Does
the
list
contain
all
VVM
realistic/credible alternatives that the
Art. 105
DOE, on the basis of its local and
to 107
sectoral knowledge, considers to be
/02/
viable means of supplying the outputs or
services that are to be supplied by the
project activity?
Note: All alternatives listed in the selected
methodology should be included, as well as
those not covered by the methodology.
7.2.4 Is the exclusion of the alternatives for
VVM
legal reasons justified?
Art. 105
Note: Some alternatives might be illegal,
to 107
according to the local regulations, but still
/02/
widely practiced due to lack of enforcement. It
should be verified.
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01 997 9105067713

DR

The fixed crediting period of 10 years is selected

OK

OK

DR

As per AMS-I.D./Version 17, the baseline scenario is


prescribed. Please see details in Section 3.4.1

OK

OK

DR

See above

OK

OK

DR

See above

OK

OK

DR

See above

OK

OK

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7.3
Investment Analysis(VVM V E.6.III.c)
7.3.1 Are all sources of revenues (including
VVM
savings) have been considered in the
Art. 108
PDD and all calculations?
to 114
/02/
/11/

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DR, I

The FSR has been the basis of the decision to proceed with the
investment in the project. All sources of revenues should be
documented in the PDD. The project participant is requested to
provide FSC and more supporting information in the investment
analysis.
See 7.1.1 above.
CL 05
5.1) Please clarify what is Tc in WACC calculation in section
B.5
5.2) Through interviews with the project participant during site
visit, it was found that the project participant was granted a
business license on 15th June 2010 with installed capacity of 2
MW.
a) Please clarify whether there is any real action was taken to
implement the project prior to 04th August 2011 (project
starting date as indicated in the PDD published for webhosting).
b) Please provide an implementation timeline of the proposed
CDM project activity which includes key events and actions
such as first meeting for stakeholder consultation, the date when
the first and second FSRs were approved, the date when Board
of Director decided to implement the project, the date when
investment license was granted and revised, the date when
construction works started, the date when equipment purchase
contract was signed, etc. This was not yet specified clearly for
validation team to conclude the adequacy of CDM prior
consideration compliance and starting date of project activity
5.3) Please clarify whether there is any national and/or sectoral
policies and circumstances in baseline scenarios as per Annex
3, EB22

Version No.:02

CAR 10
CL 05

OK

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Validation Report

7.3.2 Is the type of investment analysis


selected correctly in the PDD? Is the
choice
of
benchmark
analysis,
investment comparison or simple cost
analysis correct?
7.3.3 Is the selected financial indicator chosen
and applied correctly? Is it on
equity/project basis? Before/after tax? Is
the
financial
indicator
in
correspondence with the benchmark?
7.3.4 Is the guidance on IRR calculation and
assessment correctly applied?
Note: Means of validation should be recorded.
All input parameters need to be assessed and
if possible compared with the input
parameters applied by similar project
activities. Special procedure (ICP-5-8CDMJI-g2) applies for validation of input
data derived from FSR/PDR or other
governmentally approved project-specific
study. A similar approach should also be
taken for other project types.
In case the validation team is not able to
cross-check information with other similar
projects activities for one or several of the
input parameters, due to limited number of
registered CDM projects being available, the
team is required to determine and describe
other information sources that are used by the
validation team to make an assessment of the
reasonableness of the respective input
parameter.

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01 997 9105067713

VVM
Art. 108
to 114
/02/

DR, I

Yes. From the PDD, the investment analysis was correctly


selected and based on the comparison between project IRR and
industrial benchmark (WACC).

OK

OK

VVM
Art. 108
to 114
/02/

DR, I

Yes. The project IRR is selected and applied correctly as the


financial indicator.

OK

OK

VVM
Art. 110,
111
/02/

DR, I

The calculation of project IRR was not correctly documented.


See 7.3.1

CAR 10
CL 05

OK

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01 997 9105067713

7.3.5 In case project participants use values


from Feasibility Study Reports (FSR) is
it possible to verify that the period
between the FSR date and investment
decision was reasonably short and FSR
values did not change materially?
7.3.6 Are all the values consistent between
FSR and PDD and are inconsistencies
properly justified?

VVM
Art. 1113
/02/
/11/

DR, I

Since the FSR has been applied as the basis of the decision to
proceed with the investment in the project, the project
participant is requested to provide FSR for validation.

CAR 10
CL 05

OK

VVM
Art. 113
/02/
/11/

DR, I

The project participant is requested to provide FSR for


validation.

CAR 10
CL 05

OK

7.3.7 Were all the values from FSR applicable


and valid at the time of the investment
decision?

VVM
Art. 113
/02/
/11/

DR, I

The project participant is requested to provide FSR for


validation.

CAR 10
CL 05

OK

7.3.8 Is it reasonable to assume that no


investment would be made at a rate of
return lower than the benchmark by, for
example, assessing previous investment
decisions by the project participants or
some verifiable circumstances that have
lead to a change in the benchmark?
7.3.9 Is the Investment Analysis prepared in
compliance with the latest version of the
Guidance on the Assessment of
Investment Analysis as provided by the
CDM EB?

VVM
Art. 108
to 114
/02/
/11/

DR, I

See above.

CAR 10
CL 05

OK

VVM
Art. 110
/02/

DR, I

See above.

CAR 10
CL 05

OK

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7.3.10 Do the project include all the data


sources used (input & output / loss &
profit) and list all the projects that have
been used for cross-checking in
accordance with VVM paragraph 95.
Does the income tax calculation take
depreciation into account? Is the
depreciation year in accordance with
normal accounting practice in the host
country?
Has salvage value been taken into
account? Is working capital returned in
the last year of operation?
How are the PLF of the project assessed?
How are output price assessed?
How are O&M cost assessed?
7.3.11Sensitivity analysis: Have the key
parameters contributing to more than
20% of the revenue/costs during
operating or implementation been
identified? Has possible correlation
between
the
parameters
been
considered?
Is the range of variations (10% in default)
is reasonable in the project context?
Have the key parameters been vary to reach
or cross the benchmark and have the
likelihood of this to happen been
justified?
7.4
Barrier analysis(VVM V E.6.III.d)
7.4.1 Are there any issues addressed in the
barrier analysis that have a clear impact
on the financial viability of the project
activity and that shall be assessed by an
investment analysis?

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01 997 9105067713

VVM
Art. 95
/01/
/02/

DR

See above

CAR 10
CL 05

OK

VVM
Art. 111
/01/
/02/

DR

See above

CAR 10
CL 05

OK

VVM
Art. 116
/02/

DR, I

OK

OK

Not applicable.

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Validation Report

7.4.2 Do the listed barriers exist and is their


VVM
existence substantiated?
Art. 117
Note:
/02/
(a) by independent sources of data such as
relevant national legislation, surveys of local
conditions and national or international
statistics and/or
(b) by interviews with relevant individuals:
including members of industry associations,
government officials or local experts if
necessary?
7.4.3 Would any of the identified barriers
VVM
prevent the implementation of the
Art. 115,
project activity but not equally prevent
118
the implementation of the possible
/02/
alternatives,
in
particular
the
implementation of the identified
baseline scenario?
7.5
Common practice analysis(VVM V E.6.III.e)
7.5.1 If the PPs claim in the PDD that CDM
VVM
project activity is the first of its kind,
Art. 119
is it justified?
/02/
7.5.2 Are the geographical boundaries of the
VVM
project activity identified correctly?
Art.
120,121
/02/
7.5.3 Does the PDD provide an explanation
VVM
why this region was selected and
Art.
deemed more appropriate and is this
120,121
explanation traceable and reliable?
/02/

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01 997 9105067713

DR, I

Not applicable.

OK

OK

DR, I

Not applicable.

OK

OK

DR, I

No common practice analysis is required.

OK

OK

DR, I

Not applicable.

OK

OK

DR, I

Not applicable.

OK

OK

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Validation Report

7.5.4 Are there similar operational project


activities, other than CDM activities,
widely observed and commonly carried
out in the defined region?
Note: Use official sources and local and
industry expertise.
7.5.5 In case there are similar commercially
operated project activities, other than
CDM activities, already widely
observed and commonly carried out in
the defined region, are there essential
distinctions between the CDM project
activity and the other similar activities?
8.
Monitoring plan (VVM V E.7)
8.1 Are all parameters required by the
selected approved methodology or tool
identified and listed in the PDD?
Note: not all methodologies indicate
monitoring parameters in tabular form
or by reference to the variables used in
formulae; Nonetheless, all parameters
indicated in the methodology and
applicable to the project must be listed
in the PDD, omissions due to nonapplicability be justified.

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01 997 9105067713

VVM
Art.
120,121
/02/

DR, I

Not applicable.

OK

OK

VVM
Art.
120,121
/02/

DR, I

Not applicable.

OK

OK

VVM
Art. 122
to 124
/02/

DR, I

All parameters required by the selected approved methodology


or tool are identified and listed in the PDD. However, data table
of EGy is incomplete.

CAR 14

OK

CAR 14
Please specify monitoring / measuring frequency for EGy.
Please specify the accuracy of energy meter

Version No.:02

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Validation Report

8.2

Is the measurement method clearly


stated for each value to be monitored
and
deemed
appropriate?

Does the monitoring plan record data in


the original form as generated,
providing QA/QC procedures to be used
on the measurement method?
Note 1: if the measurement unit is different
from the unit to be applied in the
methodology,
describe
the
actual
measurement and any according conversion
method to match the unit used in the
methodology.
Example: liquid fuels may be monitored as
weight or volume. If measured as volume, the
measurement method and equipment including
the according unit (e.g., liter) shall be
described in B.7.1, as well as the conversion
into
weight
units
as
needed.
Note 2: Data on invoices / delivery slips may
be used for QA/QC purposes, but do not
constitute an actual means of monitoring and
thus cannot be applied as a source of data.
8.3 Are values of the ex-ante parameters /
monitoring
parameters
selected
correctly
and
conservative
in
accordance to methodology or tools?
See the NOTE in section 3.6.1 above!

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01 997 9105067713

VVM
Art. 122
to 124
/02/

DR, I

See above.
CAR 15
15.1) Please clearly indicate the responsibilities for and
institutional arrangements for data collection and archiving.
Please describe the connecting point more transparently and
layout of metering system.
15.2) Please specify whether back-up meter will be used
15.3) Please specify the emergency procedure and training
requirements for monitoring implementation
15.4) Please specify calibration frequency as required by
relevant national standards

CAR 14
CAR 15

OK

VVM
Art. 122
to 124
/02/

DR, I

Calculation of Emission Factor EFgo2,grid,y in section B.6.1 of


PDD is not traceable. .

CAR 11

OK

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Validation Report

8.4

Is the measurement equipment for each


parameter described and deemed
appropriate?
Are the locations of all measurement
equipment clearly identified and
consistently described, incl. process
flow-charts contained in the PDD?

01 997 9105067713

VVM
Art. 122
to 124
/02/

DR, I

Please specify whether back-up meter will be used.


CAR 15
15.1) Please clearly indicate the responsibilities for and
institutional arrangements for data collection and archiving.
Please describe the connecting point more transparently and
layout of metering system.
15.2) Please specify whether back-up meter will be used
15.3) Please specify the emergency procedure and training
requirements for monitoring implementation
15.4) Please specify calibration frequency as required by
relevant national standards

CAR 15

OK

8.5

Is the measurement accuracy addressed


and deemed appropriate?

VVM
Art. 122
to 124
/02/

DR, I

See 8.1 above

CAR 14

OK

8.6

Are procedures in place on how to deal


with erroneous measurements and are
the corrective actions identified?

VVM
Art. 122
to 124
/02/

DR, I

See above.

CAR 14
CAR 15

OK

8.7

Is the frequency of measurement


identified and deemed appropriate?

VVM
Art. 122
to 124
/02/

DR, I

See above.

CAR 14
CAR 15

OK

8.8

Is the monitoring plan documented


according to the approved methodology
and in a complete and transparent
manner?

VVM
Art. 122
to 124
/02/

DR, I

See above.

CAR 14
CAR 15

OK

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Validation Report

8.9

01 997 9105067713

CAR 14
CAR 15

OK

OK

OK

See 8.1 above.

CAR 14
CAR 15

OK

DR, I

See 8.1 above.

CAR 14
CAR 15

OK

VVM
Art. 122
to 124
/02/

DR, I

See 8.1 above.

CAR 14
CAR 15

OK

VVM
Art. 122
to 124
/02/

DR, I

See 8.1 above.

CAR 14
CAR 15

OK

Are the sampling, measurement


methods and procedures defined?

VVM
Art. 122
to 124
/02/

DR, I

See above.

8.10 Are
procedures
identified
for
maintenance of monitoring equipment
and installations?

VVM
Art. 122
to 124
/02/
/25/

DR, I

Yes.

8.11 Are the equipment calibration intervals


identified and justified?

VVM
Art. 122
to 124
/02/

DR, I

8.12 Are procedures identified for day-to-day


records handling (including what
records to keep, storage area of records
and how to process performance
documentation)?
8.13 Are the monitoring arrangements
described in the monitoring plan
feasible within the project design?

VVM
Art. 122
to 124
/02/

8.14 Are the means of implementation of the


monitoring plan, including the data
management and quality assurance and
quality control procedures, sufficient to
ensure that the emission reductions
achieved by / resulting from the project
activity can be reported ex post and
verified?

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8.15 Do the PPs make provisions for


personnel training needs?

01 997 9105067713

VVM
Art. 122
to 124
/02/

DR, I

The project participant stated that the CDM training will be


carried out before the project operation. The CDM training plan
is not yet available. Thus the validation team cannot conclude
that whether the project participant is capable to implement the
monitoring plan as the relevant training program arrangement is
not available. DOE request to address this issue during
verification.

FAR01

Please refer
to Table 3
for details.

See FAR01, Table 3


8.16 Is the authority and responsibility of
overall project management clearly
described?

VVM
Art. 122
to 124
/02/

DR, I

See 8.1 above.

CAR 14
CAR 15

OK

8.17 Are procedures identified for emergency


preparedness
for
cases
where
emergencies can cause unintended
emissions?

VVM
Art. 122
to 124
/02/

DR, I

See 8.1 above.

CAR 14
CAR 15

OK

8.18 Are procedures identified for review of


reported results/data?

VVM
Art. 122
to 124
/02/

DR, I

See 8.1 above.

CAR 14
CAR 15

OK

8.19 Is the data archiving period for this


project activity stated in the PDD and
appropriate?
Note: All archived monitoring data, required
for verification and issuance, should be kept
for at least two years after the end of the
crediting period or the last issuance of CER.

VVM
Art. 122
to 124
/02/

DR, I

See 8.1 above.

CAR 14
CAR 15

OK

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01 997 9105067713

CAR 14
CAR 15

OK

All monitored data required for verification and issuance will be


kept for two years after the end of the crediting period or the
last issuance of CERs

OK

OK

Yes

OK

OK

DR

No leakage is expected to occur according to AMS-I.D, Version


17. No monitoring shall therefore be required.

OK

OK

VVM
Art. 122
to 124
/02/

DR

See above

OK

OK

VVM
Art. 122
to 124
/02/

DR

See above

OK

OK

8.20 Is the monitoring parameters for all


project emissions captured ?

VVM
Art. 122
to 124
/01/
/02/

DR, I

See 8.1 above.

8.21 Will all monitored data required for


verification and issuance be kept for two
years after the end of the crediting
period or the last issuance of CERs, for
this project activity, whichever occurs
later?
8.22 Are the data management and quality
assurance
and
quality
control
procedures sufficient to ensure that the
emission
reductions
achieved
by/resulting from the project can be
reported ex post and verified?
8.2
Monitoring of the leakage
8.2.1 Does the monitoring plan provide for
the collection and archiving of all
relevant data necessary for determining
leakage?

VVM
Art. 122
to 124
/01/
/02/

DR, I

VVM
Art. 122
to 124
/01/
/02/

DR, I

VVM
Art. 122
to 124
/02/

8.2.2 Is the choice of project leakage


indicators made according to selected
methodology in a reasonable and
conservative manner?
Note: local knowledge and sectoral expertise
shall also be considered.
8.2.3 Is the measurement method clearly
stated and deemed appropriate for each
leakage value?
9.

Sustainable development(VVM V E.8)

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Validation Report

9.1

9.2

Does the LoA from the Host country


DNA contain the confirmation that the
proposed
CDM
project
activity
contributes
to
the
sustainable
development of the host Party?
If PDD indicates any additional
environmental benefits of the project,
other than GHG emission reductions,
were
those
benefits
properly
substantiated?

01 997 9105067713

VVM
Art. 125
to 127
/02/

DR

No LoA from the Host country DNA is provided to confirm that


the proposed CDM project activity contributes to the
sustainable development of the host Party

CAR 02

VVM
Art. 125
to 127
/02/

DR

Through on site interviews with local stakeholder and


authorities, the validation team can confirm that the project can
contribute to social and economic benefits by providing job
opportunities and road improvement to local society apart from
environmental benefits.

OK

OK

The consulted stakeholders included the representatives from


local authorities, organizations and local villagers with different
genders, age groups, educational backgrounds and occupations.
Thus the stakeholders were identified in appropriate and
complete manner.

OK

OK

10.
Stakeholders consultation and comments (VVM V E.9)
10.1 Were the stakeholders identified in
VVM
DR, I
appropriate and complete manner?
Art. 128
to 130
/02/
10.2 Are
the
plausible?

stakeholders

VVM
Art. 128
to 130
/02/

DR, I

Yes. The identified stakeholders were plausible.

OK

OK

10.3 Does PDD describe the means being


used to invite local stakeholders
comments?

VVM
Art. 128
to 130
/02/

DR, I

The PDD stated that the local stakeholders were invited through
advertisement on newspaper and invitation letters.

OK

OK

10.4 Were those means appropriate?

VVM
Art. 128
to 130
/02/

DR, I

See above.

OK

OK

Rev 01 (2011-11-01) ,

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01 997 9105067713

10.5 Was the project presented to the


stakeholders in unbiased manner?

VVM
Art. 128
to 130
/02/

DR, I

Yes. The project was presented to the stakeholders in unbiased


manner.

OK

OK

10.6 If a stakeholder consultation process is


required by regulations/laws in the host
country,
has
the
stakeholder
consultation process been carried out in
accordance with such regulations/laws?

VVM
Art. 128
to 130
/02/
/11a/
/14c/

DR, I

The stakeholder consultation process related to the emission


reduction is not required by regulations/laws in the host country
for this type of project activity. The project participant has to
carry out the clearance by the people committee at district and
province level before getting the investment licence. The given
project has obtained the required investment licence.

OK

OK

10.7 Is a summary of the stakeholder


comments provided in the PDD?

VVM
Art. 128
to 130
/02/

DR

Yes. A summary of the stakeholder comments is provided in


Section E of PDD.
CL 08
Please clarify what MHPP means

CL 08

OK

10.8 Has due account of any stakeholder


comments been taken by PPs and
reflected in the PDD?

VVM
Art. 128
to 130
/02/

DR

No comment was received during the GSP.

OK

OK

DR, I

Yes. The environmental impact of the project was sufficiently


assessed by means of Environmental Analysis (UKL-UPL), and
was approved by Environment management Division of Garut
Regency on 02nd September 2010. The environmental impacts
have been reflected in the Section D of PDD.

OK

OK

DR, I

See above.

OK

OK

11.
Environmental impacts(VVM V E.10)
11.1 Is the documentation supplied by the
VVM
PPs regarding environmental impacts
Art. 131
relevant and accurately reflected in the
to 133
PDD?
/02/
/14a/
11.2 Is an environmental impact assessment
VVM
(EIA) required for the CDM project
Art. 131
activity?
to 133
Note: determine by using a review of relevant
/02/
legislation and local expertise.

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01 997 9105067713

11.3 In case an EIA is required, has the EIA


has been approved by local authorities
and is the outcome accurately reflected
in the PDD?

VVM
Art. 131
to 133
/02/

DR, I

See above.

OK

OK

11.4 Does the PDD include a brief


description of the environmental effects
of the project, including transboundary?

VVM
Art. 131
to 133
/02/

DR, I

See above.

OK

OK

11.5 Are those effects properly addressed in


the design of the project activity?

VVM
Art. 131
to 133
/02/

DR, I

See above.

OK

OK

11.6 Does the project comply with


environmental legislation in the host
country?

VVM
Art. 131
to 133
/02/

DR, I

The Environmental Analysis (UKL-UPL) was approved by


Environment management Division of Garut Regency on 02nd
September 2010. However the project participant is requested to
provide supporting documents for land acquisition process.
CAR 16
Please provide the supporting documents for the arrangement of
compensation due to resettlement of households involved for
the project activity
CL 07
Please clarify what PLTMH means

CAR 16
CL 07

OK

Rev 01 (2011-11-01) ,

Version No.:02

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01 997 9105067713

Table 2:
List of Requests for Corrective Action (CAR) and Clarification (CL)
Validation / Verification Manual
(35) The DOE shall raise a corrective action request (CAR) if one of the following occurs:
(a) The project participants have made mistakes that will influence the ability of the project activity to achieve real, measurable additional emission
reductions;
(b) The CDM requirements have not been met;
(c) There is a risk that emission reductions cannot be monitored or calculated.
(36) The DOE shall raise a clarification request (CL) if information is insufficient or not clear enough to determine whether the applicable CDM
requirements have been met.
The wording of CAR/CL shall clearly address nonconformity or seek clarification, and avoid instructive / consultative language in order to prevent
actual or perceived consultancy.
Summary of project owner
No
CAR/CL
Observation (CAR/CL)
Reference
Validation team conclusion
response
1.

Rev 01 (2011-11-01) ,

CAR 01
1.1) The project participants name
(PT. Tirta Gemah Ripa) is
inconsistent between sections A.2.,
A.3., B.8. and Annex 1

A.2
A.3
B.8
Annex 1

1.2) Kindly provide the applicable


supporting documents to substantiate
the following statement: With annual
8,760 operating hours the project is
expected to generate net electricity
47471 MWh/year and expected to
bring about GHG emission reductions
of approximately 33,846 tCO2e
annually.

A.2

Version No.:02

Response No.1
The project participants name PT.
Tirta Gemah Ripa is corrected in
section A.2, A.3, B.8 and Annex 1 of
the revised PDD, version 2.
Response No. 2
The project participants name PT.
Tirta Gemah Ripah is corrected in
section A.2, A.3 of the revised PDD,
version 2.1.
The statement has been reframed in
section A.2 of the revised PDD,
version 2. The supporting document
for 8760, net electricity generation of
47471 MWh/year is feasibility study
report and CER amount of 33,847 is
Emission Reduction calculation sheet.
The emission reduction calculation
spreadsheet is attached for your
reference.

Response No. 1
The project participants name PT. Tirta
Gemah Ripa was not yet corrected in
section A.2, A.3
Response No. 2
The project participants name PT. Tirta
Gemah Ripa has been corrected in the
revised PDD.
CAR01 (1.1) is resolved & closed.
The feasibility study report /11/ page 42
provided information of operating hours
(Operational Day and Production Hours) of
8760 hours and net electricity production of
47,471 MWh/year. The expected amount of
GHG emission reductions of approximately
33,847 tCO2e annually is supported by the
emission reduction calculation spreadsheet
/30/, 31/

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01 997 9105067713

2.

CAR 02
Please provide the LoAs of Host
Country and Annex I Country for
validation

A.3

The DNA meeting for the project has


been completed on 26th Jan 2012.
Letter of approval is awaited. It is
submitted for validation as supporting
document /3/.

3.

CAR 03
3.1) Please provide the coordinates of
the dam and powerhouse in 4 decimal
points

A.4.1.4

3.2) Please
location

A.4.1.4

Response No. 1
The co-ordinates of the dam and
powerhouse in 4 decimal points are
provided in section A.4.1.4 of the
revised PDD, version 2.
Response No. 2
The co-ordinates of dam and the
power house in decimal points are
provided in section A.4.1.4 of revised
PDD, version 2.1. These co-ordinates
are taken during the validation site
visit. Hence the proof for co-ordinates
taken is sighted during validation site
visit itself.
Response No. 1
The project location is indicated in
map in section A.4.1.4 of the revised
PDD, version 2.
Response No 2
The map has been revised in section
A.4.1.4 of the revised PDD, version
2.1

Rev 01 (2011-11-01) ,

specify

the

project

Version No.:02

CAR01 (1.2) is resolved & closed.


Response No. 1
The LoA No. B 076/KNMPB/03/2012
issued by DNA Indonesia on 6th March
2012 was provided by the project
participant. The LoA was validated and
confirmed to be eligible.
Please provide the LoAs of Annex I
Country for validation
Response No. 1
Please provide the proof for coordinates of
power house and the connection point
between existing dam and new channel.
Please indicate clearly coordinates of both
dam connection point and power house in
section A.4.1.4 of PDD.
Response No. 2
The co-ordinates of dam and the power
house in decimal format have been provided
in the revised PDD,
CAR03 (3.1) is resolved & closed.

Response No. 1
The map in which the project location is
indicated is not clear enough to identify the
location of the project activity. Please use
better map to identify the project location.
Response No. 2
A better map to identify the project location
has been provided in the revised PDD.
CAR03 (3.2) is resolved & closed.

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4.

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01 997 9105067713

CAR 04
4.1) Please indicate the unit of turbine
speed

A.4.2

Response No. 1
The unit of turbine speed is
mentioned in section A.4.2 of the
revised PDD, version 2.
Response No. 2
The technical specifications from the
manufacturer of the hydro turbine and
generator will be provided for
validation along with the response.

4.2) Please provide the supporting


documents from the turbine and
generator manufacturer for validation
of project lifetime and technical
specifications including the rated
capacity

A.4.2

Response No. 1
The technical specification of turbine
and generator from supplier will be
provided for validation.
Response No. 2
The technical specifications from the
manufacturer of the hydro turbine and
generator will be provided for
validation along with the response.

4.3) Please include key parameters of


generators in section A.4.2

A.4.2

Response No. 1
The key parameters of generators in
section A.4.2 of the revised PDD,
version 2.
Response No. 2
The technical specifications from the
manufacturer of the hydro turbine and
generator will be provided for
validation along with the response.

Version No.:02

Response No. 1
Please provide the technical specifications
from the manufacturer of the hydro turbine
and generator including the rated capacity
for validation
Response No. 2
The technical specifications from the
manufacturer of the hydro turbine and
generator including the rated capacity has
been provided for validation
CAR04 (4.1) is resolved & closed.
Response No. 1
Please provide the technical specifications
from the manufacturer of the hydro turbine
and generator including the rated capacity
for validation.
Response No. 2
The technical specifications from the
manufacturer of the hydro turbine and
generator including the rated capacity has
been provided for validation
CAR04 (4.2) is resolved & closed.
Response No. 1
Please provide the technical specifications
from the manufacturer of the hydro turbine
and generator including the rated capacity
for validation.
Response No. 2
The technical specifications from the
manufacturer of the hydro turbine and
generator including the rated capacity has
been provided for validation
CAR04 (4.3) is resolved & closed.
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01 997 9105067713

4.4) Please include a description of


how environmentally safe and sound
technology and know how is being
applied by the project activity

A.4.2

4.5) Please provide supporting


documents to substantiate capacity
factor

A.4.2

The
description
of
how
environmentally safe and sound
technology and knowhow is being
applied by the project activity is
provided in section A.4.2 of the
revised PDD, version 2.
Response No. 1
The capacity factor has been taken as
per feasibility study report and it will
be submitted for validation.
Response No. 2
The feasibility study report is
prepared by third party. The third
party who has prepared the feasibility
study report is expertise in
preparation of feasibility studies for
hydro projects. Moreover, this meets
the condition specified for assessment
of plant load factor as per EB 48,
Annex 11.

The revised PDD has been updated with a


description of how environmentally safe
and sound technology and know how is
being applied by the project activity.
CAR04 (4.4) is resolved & closed.
Response No. 1
The capacity factor is stated on page 39 of
Feasibility study report /11/. However
please provide the Approval of Feasibility
Study Report for validation.
Response No. 2
A confirmation letter /12/ from 3rd party
engineering company has been provided for
validation.
Moreover, a Profile of Engineering Third
party /13/ has been provided for validation.
CAR04 (4.5) is resolved & closed.

Also, the PPA signed between PT.


PLN (Persero) and PT. Tirta Gemah
Ripah for Mini Hydro Power Plant
Total Capacity 2000 kW states the
capacity factor based on the
feasibility study report submitted,
which is government approved
document. Hence it meets the
conditions as specified for assessment
of plant load factor as per EB 48,
Annex 11.
4.6) PDD does not explain clearly

Rev 01 (2011-11-01) ,

A.4.2

Version No.:02

Response No. 1

Response No. 1

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5.

6.

Rev 01 (2011-11-01) ,

01 997 9105067713

whether the project activity would


import electricity from Jamali grid in
the event of emergency, shut down
for maintenance, etc

B.3
B.7.1
B.7.2
B.6.3

CAR 05
5.1) Spelling mistakes on year 1 and
year 4

A.4.3

5.2) The template of table under A.4.3


is inconsistent versus with the format
template published by UNFCCC

A.4.3

CAR 06
6.1) Footnote No. 2 is missing

B.1

Version No.:02

Its described in section A.4.2 of the revised


PDD that diesel generators will be used in
case of emergency. However,
data/parameters FCi,j,y monitored for
project emission has not been discussed in
section B.7.1 and B.7.2.
Moreover justification why Project
Emissions (PEy) = 0 is not substantiated in
section B.6.3
Response No. 2
Data/parameters FCi,j,y monitored for
project emission has been discussed in
section B.7.1 and B.7.2. of the revised PDD.
Justification why Project Emissions (PEy) =
0 is substantiated in section B.6.3 of the
revised PDD.
CAR04 (4.6) is resolved & closed.
The spelling mistakes on year 1 and Section A.4.3 has been corrected in the
year 4 are corrected in section A.4.3 revised PDD.
of the revised PDD, version 2.
CAR05 (5.1) is resolved & closed.
The project activity will use diesel
generator in case of any emergency
and details are provided in section
A.4.2, B.3, B.7.1 and B.7.2 of the
revised PDD, version 2.
Response No. 2
The details are provided in section
B.7.1 and B.7.2 of the revised PDD,
version 2.1
The justification of why project
emission is zero is provided in section
B.6.3 of the revised PDD, version 2.1

The template of table under A.4.3 is The correct template of table under A.4.3
corrected in section A.4.3 of the has been corrected to be consistent versus
revised PDD, version 2.
with the format template published by
UNFCCC.
CAR05 (5.2) is resolved & closed.
Response No. 1
Response No. 1
The footnote 2 is included in section The link provided in footnote 2 can not be
B.1 of the revised PDD, version 2.
accessed.
Response No. 2
Response No. 2
The link provided in the footnote 2 is The link has been updated in the revised
corrected in the revised PDD, version PDD.
2.1 and it should be in page 10 of the CAR06 (6.1) is resolved & closed.
PDD, as footnote is mentioned in
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7.

Rev 01 (2011-11-01) ,

01 997 9105067713

page 10 of the PDD


The version of Tool to calculate the
emission factor for an electricity
system is included in section B.1 and
B.6.1 of the revised PDD, version 2.

6.2) Version of Tool to calculate the


Emission Factor for an electricity
system specified in PDD is outdated
(EB 61 Annex 12)

B.1
B.6.1

6.3) Tool for the demonstration and


assessment of additionality (Version
05.2) (EB39 Annex 10) is missing

B.1

CAR 07
7.1) Paragraph Illustration of
respective situations under
Spelling mistakes at e.g. grid imp
rt, the user end
xcess,
electricity company of Indoensia

B.2

7.2) Paragraph Hydro power plants


with reservoirs that satisfy at least
Justification for this criterion is
incorrect. During site visit and
through interviews with project
participants, it was confirmed that the
project activity is implemented on an
existing reservoir and dam. The
justification is requested to be more
accurate and detailed.

B.2

The
justification
for
these The justification for the applicable criteria
applicability criteria is reframed in has been updated in the revised PDD.
section B.2 of the revised PDD, CAR07 (7.2) is resolved & closed.
version 2.

7.3) Version 16 of Methodology


AMS I.D, EB 54 is outdated

B.2
B.6.1

The version of the meth AMS I D is The version 17 of Methodology AMS I.D
updated in section B.2 and B.6.1 of has been updated in the revised PDD.
the revised PDD, version 2.

Version No.:02

The version of Tool to calculate the


Emission Factor for an electricity system
has been updated in the revised PDD.
CAR06 (6.2) is resolved & closed.
Non-binding best practice examples to
demonstrate additionality for SSC project
activities and Guidelines on the
assessment of investment analysis have
been used to justify for the additionality of
the project. This is in line with Paragraph
137 of VVM, EB55 Annex 1.
CAR06 (6.3) is resolved & closed.

The additionality for the project has


been demonstrated as per Nonbinding best practice examples to
demonstrate additionality for SSC
project activities and Guidelines on
the assessment of investment
analysis. Hence the Tool for the
demonstration and assessment of
additionality is not mentioned in
section B.1 of the PDD.
The spelling mistake in the respective The spelling mistake has been corrected in
lines has been corrected in section B.2 the revised PDD.
of the revised PDD, version 2.
CAR07 (7.1) is resolved & closed.

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8.

01 997 9105067713

CAR07 (7.3) is resolved & closed.


The Jamali grid is included in project The project boundary has been updated to
boundary in section B.3 of the revised include Jamali grid in the revised PDD.
PDD, version 2.
CAR08 (8.1) is resolved & closed.

CAR 08
8.1) The project boundary shall
include Jamali grid as description in
sections A.2 and A.4.2 of the PDD

B.3

8.2) Please kindly confirm whether


the existing reservoir and dam is
included in the project boundary or
not

B.3

The details about the existing


reservoir are provided in project
boundary in section B.3 of the revised
PDD, version 2.

8.3) PDD does not explain clearly


whether the project activity would use
any backup diesel gen set in the event
of emergency etc?

B.3

The project activity will use diesel


generator in case of any emergency
and details are provided in section B.3
of the revised PDD, version 2.

9.

CAR 09
The statement Hence in the project
scenario the electricity delivered to
the Jamali grid by the project activity
would have otherwise been generated
by the operation of grid connected
power plants and by the addition of
new
generation
sources
is
incomplete

B.4

The statement is corrected in section


B.4 of the revised PDD, version 2.

10.

CAR 10
10.1) Please provide approved
Feasibility Study Report and other
data sources for validation of
financial / technical parameters
specified in section B.5 and Financial
Spreadsheet

B.5
Financial
Spreadsheet
B.6.2

Response No. 1
The approved feasibility study report
and other data sources will be
provided for validation.
Response No. 2
The feasibility study report is
prepared by third party. The third
party who has prepared the feasibility
study report is expertise in
preparation of feasibility studies for
hydro projects. Moreover, this meets

Rev 01 (2011-11-01) ,

Version No.:02

The project boundary which does not


include the existing reservoir and dam has
been updated in the revised PDD.
CAR08 (8.2) is resolved & closed.
The project boundary has been updated to
include back-up diesel generator in the
revised PDD.
CAR08 (8.3) is resolved & closed.
The mentioned statement has been updated
in the revised PDD.
CAR09 is resolved & closed.

Response No. 1
The salvage value is inconsistent between
FSR and Financial Spreadsheet
Response No. 2
The salvage value has been updated in
Financial Spreadsheet
CAR10 (10.1) is resolved & closed.

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01 997 9105067713

the condition specified for assessment


of plant load factor as per EB 48,
Annex 11.
The salvage value is included in
project IRR calculation in the
financial spreadsheet.
10.2) What is the investment decision
date?
PDD does not include this
information transparently

Rev 01 (2011-11-01) ,

B.5

Version No.:02

Response No. 1
The detail about the investment
decision date is included in section
B.5 of the revised PDD, version 2.
Response No. 2
The documents mentioned in the
chronology will be provided along
with the response.

Response No. 1
Please provide the supporting document for
the investment decision date (23rd June
2010).
Moreover, please provide below documents
as mentioned in the revised PDD:
- Investment Approval from the Regent of
Garut dated 23rd July 2010
- Recommendation on Cirompang MHPs
Use of Land Allocation Permit, dated
26th July 2010
- The Agreement between PT. TGR with
GP3A Daerah Irigasi Cirompang, dated
2nd August 2010
- Recommendation letter document of
Environmental Management Effort &
Environmental Monitoring Effort &
Environmental Monitoring Effort for
Cirompang MHP 8 MW construction,
dated 2nd Sep 2010
- CDM Advisory services agreement
between PP and consultant, dated 2nd
Sep 2010
- PPA between PT. PLN (Persero) and PT.
Tirta Gemah Ripah for Mini Hydro
Power Plant Total Capacity 8000 kW,
dated 21st Nov 2011
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01 997 9105067713

10.3) Please provide the prior CDM


consideration notification sent to
UNFCCC and Host party DNA for
validation

B.5

Response No. 1
The prior CDM consideration
notification sent to UNFCCC and
Host party DNA will be submitted for
validation.
Response No. 2
The date of the prior CDM
consideration notification sent to
Indonesia DNA is corrected in section
B.5 of the revised PDD, version 2.1.

10.4) Legend of D/V is incorrect

B.5

The legend of D/V is corrected in


section B.5 of the revised PDD,
version 2.

B.5
Financial
Spreadsheet
C.1.2

Response No. 1
The reference sources for the
following are provided in section B.5,
C.1.2 of the revised PDD, version 2
and in financial spreadsheet.
Determination of power tariff As
per Permen ESDM Nomor 31 2009

10.5) Worksheet Assumption


The project participant is requested to
provide the reference sources for the
determination of Power tariff,
Time span for assessment period,
Income Tax Rate, Depreciation,
Exchange Rate, Contingency,

Rev 01 (2011-11-01) ,

Version No.:02

Response No. 2
The timeline of project activity and
supporting documents has been updated in
the revised PDD.
CAR10 (10.2) is resolved & closed.
Response No. 1
The the prior CDM consideration
notification sent to UNFCCC and Host
party DNA were provided for validation.
The prior CDM consideration notification
sent to UNFCCC can be verified via
UNFCCC web page /18/.
However the date of the prior CDM
consideration notification sent to Indonesia
DNA is inconsistent with section B.5 of the
revised PDD.
Response No. 2
The date of the prior CDM consideration
notification sent to Indonesia DNA has
been updated in section B.5 of the revised
PDD.
CAR10 (10.3) is resolved & closed.
Legend of D/V has been corrected to
Percentage of financing that is by debt
(%) in the revised PDD.
CAR10 (10.4) is resolved & closed.
Response No. 1
The reference sources of Power tariff,
Time span for assessment period,
Income Tax Rate, Depreciation,
Exchange Rate, Contingency, IDC
have been provided.
Calculation at Cell N12 of sheet Cashflow
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01 997 9105067713

IDC
Values for calculation of Net energy
supplied to the grid are not traceable.
Please clarify?

Rev 01 (2011-11-01) ,

Version No.:02

dated
13
November
2009,
Government of Indonesia regulating
the tariff rate in Indonesia.
Time span for assessment period
Feasibility study report
Income tax rate Indonesia
Government Regulation No.17 Year
2000, clausal No.17
Depreciation Indonesia Government
Regulation No.17 Year 2000, clausal
No.11
Exchange rate http://www.xrates.com/cgi-bin/hlookup.cgi
Contingency Feasibility study
report
IDC Feasibility study report.
The formula used calculation of net
energy supplied to the grid is
provided in financial spreadsheet.
Response No. 2
The feasibility study report states the
commissioning schedule plan of the
project. However the board has
decided that expected commissioning
date of the project will be during Feb
2013.
The feasibility study report is
prepared by third party. The third
party who has prepared the feasibility
study report is expertise in
preparation of feasibility studies for
hydro projects. Moreover, this meets
the condition specified for assessment
of plant load factor as per EB 48,

of Financial Spreadsheet is not traceable.


Response No. 2
Calculation at Cell N12 of sheet Cashflow
of Financial Spreadsheet is has been
corrected.
CAR10 (10.5) is resolved & closed.

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01 997 9105067713

10.6) Worksheet Cashflow


Values of 41.7461%, 20.5055%
are not traceable. Please clarify?
Please provide data source and
substantiate the Salvage value

10.7) Worksheet Benchmark:


Justification of selected values of E/V
and D/V was not substantiated.
Calculation of Benchmark (WACC)
is not conservative and transparent.

Rev 01 (2011-11-01) ,

B.5
Financial
Spreadsheet

B.5
Financial
Spreadsheet

Version No.:02

Annex 11.
Calculation at Cell N12 of sheet
Cashflow is revised in the Financial
Spreadsheet
Response No. 1
The phasing of project costs as per the
feasibility study report is included in
revised financial spreadsheet for your
reference.
In accordance to the Law of Indonesia
No.17/2000 on Income Tax, Article
11,
local
accounting
practice
regulations, the depreciation rate for
permanent building is 5% which is 20
years will be fully depreciated.
The equipment is considered as non
building asset under group 4 with a
depreciation rate of 5% that will be
fully depreciated by year 20.
Based on the law, the salvage value
for the project will be zero.
Response No. 2
The salvage value is included in
project IRR calculation in the
financial spreadsheet.
Response No. 1
The selected values of E/V and D/V
are substantiated in section B.5 of the
revised PDD, version 2.
Response No. 2
The debt equity ratio is changed to
70:30 in the benchmark calculation

Response No. 1
The phasing of project costs and data
sources have been provided in sheet
Assumption of Financial Spreadsheet.
The salvage value is inconsistent between
FSR and Financial Spreadsheet. Please
correct.
Response No. 2
The salvage value has been updated to be
consistent between FSR and Financial
Spreadsheet.
CAR10 (10.6) is resolved & closed.

Response No. 1
According to Para. 17 of EB62, Annex 5,
the percentage of debt financing and equity
financing should reflect the long-term
debt/equity finance structure of the legal
entity owning the assets of the project
activity. As the debt/equity finance structure
of this project activity is 70/30 as stated in
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01 997 9105067713

10.8) Worksheet Benchmark and


Beta:
Justification of selected values of
was not substantiated

B.5
Financial
Spreadsheet

10.9) Worksheet Benchmark and


Market Return:
Calculation of Market risk was not
substantiated sufficiently. Please
clarify why the calculation span for
Market risk is from 28/02/2006 to
31/3/2011. Please provide the data
source

B.5
Financial
Spreadsheet

Version No.:02

and accordingly corrected in section FSR, please explain why the used D/V and
B.5 of the revised PDD, version 2.1.
E/V are different.
Response No. 2
The debt/equity finance structure of this
project activity has been corrected into
70/30.
CAR10 (10.7) is resolved & closed.
Response No. 1
Response No. 1
The justification of selected values of Please show to connect to specific link to
is substantiated in the revised PDD, download the data in Excel sheet Beta.
version 2.
Value of Re in inconsistent between
Financial Spreadsheet and section B.5 of the
Response No. 2
revised PDD.
In the following link
http://people.stern.nyu.edu/adamodar/ Response No. 2
Please go to updated data, under the Value of Re has been corrected to be
data sets headline, please check for consistent between Financial Spreadsheet
total beta by industry sector. and section B.5 of the revised PDD.
Historical data under total beta by CAR10 (10.8) is resolved & closed.
industry are provided. The latest
available beta applicable to the
project activity is Jan 2010, and hence
that has been chosen.
The value of Re is corrected in
financial spreadsheet and section B.5
of the revised PDD, version 2.1
Response No. 1
Response No. 1
The calculation of market risk and Value of Re in inconsistent between
span chosen for market risk Financial Spreadsheet and section B.5 of the
calculation is substantiated in revised revised PDD.
PDD, version 2.
Response No. 2
Response No. 2
Value of Re has been corrected to be
The value of Re is corrected in consistent between Financial Spreadsheet
financial spreadsheet and section B.5 and section B.5 of the revised PDD.
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01 997 9105067713

of the revised PDD, version 2.1


10.10) Worksheet Benchmark
and Risk Free Rate:
Please substantiate how to select krf
from the source:
http://www.bapepam.go.id/pasar_mod
al/
publikasi_pm/statistik_pm/2010/2010
_III_2.pdf

B.5
Financial
Spreadsheet

Response No. 1
The correct link used for the krf value
is:
http://www.idx.co.id/Portals/0/Static
Data/Publication/BondBook/FileDow
nload/INDONESIA%20BOND%20M
ARKET%20DIRECTORY%202011.
pdf
The calculation is provided in
financial spreadsheet.
Response No. 2
The value of Re is corrected in the
financial spreadsheet and section B.5
of the revised PDD, version 2.1.
The bond FR55 has been removed in
the risk free rate return calculation in
the financial spreadsheet.

CAR10 (10.9) is resolved & closed.


Response No. 1
Value of Re in inconsistent between
Financial Spreadsheet and section B.5 of the
revised PDD.
Bond FR55 has maturity period of 6 years
only. Please correct the calculation.
Please substantiate why the table in Sheet
Risk Free Rate includes only 20 bonds to
be considered.
Response No. 2
Value of Re has been corrected to be
consistent between Financial Spreadsheet
and section B.5 of the revised PDD.
Justification for calculation sheet Risk Free
Rate has been substantiated.
CAR10 (10.10) is resolved & closed.

The risk free rate is the rate of return


on an asset that is theoretically free of
any risk. When doing investment
analysis on longer term projects or
valuation, the risk free rate should be
the long term government bond rate
(Estimating Risk Free Rates by Dr.
Aswath Damodaran of Stern School
of Business, New York University
page 6)
http://jftnewspaper.aub.edu.lb/reserve/data/fin
a306-ai-project-reading/riskfree.pdf
Hence bonds having a maturity period
of 10 years or more are considered for
Rev 01 (2011-11-01) ,

Version No.:02

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01 997 9105067713

risk free rate calculation.

11.

Rev 01 (2011-11-01) ,

10.11) Worksheet Sensitivity:


Justification of selected parameters
for sensitivity analysis was not
substantiated. In addition, the
calculation of the critical parameters
for the project IRR reaching the
benchmark is not yet included

B.5
Financial
Spreadsheet

Response No. 1
The critical parameters are included
in sensitivity analysis in section B.5
of the revised PDD, version 5.
Response No. 2
The salvage value is included in
project IRR calculation in the
financial spreadsheet.

Response No. 1
Please calculate project IRR with salvage
value stated in FSR.
Response No. 2
The updated calculation of project IRR with
salvage value stated in FSR has been
provided.
CAR10 (10.11) is resolved & closed.

10.12) The below link can not be


accessed:
http://cdm.unfccc.int/filestorage/P/U/
2/PU2ARNBM3KFXS9HZ6OELGTI
CJ81VYD/eb62_repan13.pdf?t=S1Z8
MT
MxMDk4ODc4Ny4xNg==|YcWrSS5
PsIUWxjDqoPPNY4W0KWc=

B.5

Response No. 1
The correct link is provided in section
B.5 of the revised PDD, version 2.
Response No. 2
The correct link is provided in section
B.5 of the revised PDD, version 2.1.

CAR 11
11.1) The below link can not be
accessed:
http://dnacdm.meth.go.id/en/database/
Please provide the raw data and
calculation of emission factor for
validation and please document the
calculation of the operating margin
and build margin emission factors as

B.6.1
B.6.2
B.6.3

The correct link has been provided in


section B.6 .1 of the revised PDD,
version 2.
The raw data for grid emission factor
calculation is received from Ministry
and is provided in excel format. The
calculation procedure for grid
emission factor is provided in
Appendix A as referred in section
B.6.1 of the revised PDD version 2.

Response No. 1
The updated link can not be accessed:
http://cdm.unfccc.int/filestorage/P/U/2/PU2
ARNBM3KFXS9HZ6OELGTICJ81VYD/e
b62_repan13.pdf?t=RHd8bHp
1N2kyfDDyYPDMTFvHabVNNYW0S1L
w
Response No. 2
The correct link has been provided in
section B.5 of the revised PDD.
CAR10 (10.12) is resolved & closed.
The correct link has provided in the revised
PDD:
http://pasarkarbon.dnpi.go.id/web/index.php
/komnasmpb/read/20/faktor-emisi-jaringanlistrik-jawamadura-bali-jamali-2010-.html
The raw data and calculation of grid
emission factor of Jamali Grid has been
updated in section B.6.1 and Appendix A of
the revised PDD. The correct version of the

Version No.:02

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requirement in section III (page 20) of


the Tool.
Please clarify version of the Tool is
applicable for calculation.

12.

13.

14.

Rev 01 (2011-11-01) ,

The tool version applicable for Tool has been updated in section B.6.1,
calculation is provided in section B.6.2 and B.6.3 of the revised PDD.
B.6.1, B.6.2 and B.6.3 of the revised CAR11 (11.1) is resolved & closed.
PDD, version 2.

11.2) It was justified in section B.6.1


of the PDD that the project has no
reservoir and PEy = 0. This
justification is incorrect as the project
activity is implemented on an existing
reservoir and dam.

B.6.1

Response No. 1
The justification is corrected in
section B.6.1 of the revised PDD,
version 2.
Response No. 2
The justification is provided in
section B.6.1 and B.6.3 of the revised
PDD, version 2.1

CAR 12
12.1) Calculation of Baseline
emissions (BEy) is incorrect

B.6.3

The baseline emission calculation is


corrected in section B.6.3 of the
revised PDD, version 2.

12.2) Please
LEy,exante

or

B.6.3

It is LEy and it is corrected in section


B.6.3 of the revised PDD, version 2.

CAR 13
13.1) The template of table in section
B.6.4 is inconsistent versus the
guidelines published by UNFCCC

B.6.4

The template of the table is corrected


in section B.6.4 of the revised PDD,
version 2.

13.2) Year 3 and year 4 of the table


are incorrect

B.6.4

CAR 14
Please specify monitoring / measuring

B.7.1

Response No. 1
Response No. 1
The year 3 and year 4 of the table are The table in section B.6.4 has been
corrected in section B.6.4 of the corrected in the revised PDD..
revised PDD, version 2.
CAR13 (13.2) is resolved & closed.
The measuring frequency and The measuring frequency (continuously) for
accuracy of the energy meters are EGy has been updated in section B.7.1 of

clarify

LEy

Version No.:02

Response No. 1
The justification why Project Emissions
(PEy) = 0 (caused by Emission from diesel
generator backup) is not substantiated in
section B.6.1 and B.6.3 of the revised PDD.
Response No. 2
The justification for Project Emissions
(PEy) = 0 (caused by Emission from diesel
generator backup) has been substantiated in
section B.6.1 and B.6.3 of the revised PDD.
CAR11 (11.2) is resolved & closed.
The calculation of Baseline emissions
(BEy) has been corrected in section B.6.3 of
the revised PDD.
CAR12 (12.1) is resolved & closed.
LEy has been corrected in section B.6.3 of
the revised PDD.
CAR12 (12.2) is resolved & closed.
The template of table in section B.6.4 has
been corrected to be consistent versus the
guidelines published by UNFCCC.
CAR13 (13.1) is resolved & closed.

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01 997 9105067713

frequency for EGy.


Please specify the accuracy of energy
meter

15.

16.

Rev 01 (2011-11-01) ,

CAR 15
15.1) Please clearly indicate the
responsibilities for and institutional
arrangements for data collection and
archiving. Please describe the
connecting point more transparently
and layout of metering system.

B.7.2

15.2) Please specify whether back-up


meter will be used

B.7.2

15.3) Please specify the emergency


procedure and training requirements
for monitoring implementation

B.7.2

15.4) Please specify calibration


frequency as required by relevant
national standards

B.7.2

CAR 16
Please provide the supporting
documents for the arrangement of
compensation due to resettlement of
households involved for the project

D.1

Version No.:02

indicated in section B.7.1 of the the revised PDD.


revised PDD, version 2.
The accuracy of energy meter for EGy has
been updated in section B.7.1 of the revised
PDD. This is cross-checked with PPA /7/,
/26/.
CAR14 is resolved & closed.
The responsibilities and arrangements The responsibilities and arrangements for
for data collection and archiving are data collection and archiving have been
well explained in section B.7.2 of the updated in section B.7.2 of the revised
revised PDD, version 2.
PDD.
CAR15 (15.1) is resolved & closed.

The back-up meters will be used and The back-up meters will be installed at the
the details are provided in section power house and described in section B.7.2
B.7.2 of the revised PDD, version 2.
of the revised PDD.
CAR15 (15.2) is resolved & closed.
The details about the emergency The emergency procedure has been updated
procedure and training requirements in section B.7.2 of the revised PDD.
for monitoring are provided in section Training on CDM monitoring will be
B.7.2 of the revised PDD.
provided to relevant staff prior to the start of
the crediting period.
CAR15 (15.3) is resolved & closed.
The
calibration
frequency
is The calibration frequency has been updated
mentioned in section B.7.2 of the in section B.7.2 of the revised PDD.
revised PDD, version 2.
Moreover this is also required in the PPA
/7/, /26/.
CAR15 (15.4) is resolved & closed.
Response No. 1
Response No. 1
The supporting documents for During the interview with the local people
arrangement of compensation due to when on site visit, its confirmed that there
resettlement of households involved were 135 people with 7.4 ha of land
will be provided for validation.
affected by the project. All effected people
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activity

Response No. 2
The sample records on land
compensation will be provided for
validation along with the response.

17.

CL 01
Through interviews with project
participant and review of Agreement
between PT. TGR with GP3A DI
Cirompang dated 11th Aug 2011, it
was confirmed that the project
participant is allowed to use the dam
owned by Garut Regency until the
PPA between the project participant
and PLN is no longer valid (i.e. for 15
years), please clarify what will
happen with the project facilities
(powerhouse, tunnel, channel, etc)
when that Agreement and PPA
become invalid.

A.2
B.5
C.1.2

Response No. 1
The PP may extend the PPA until the
lifetime of the equipments installed in
the project activity.
Response No. 2
The article 3 of the PPA between PT.
PLN (Persero) and PT. Tirta Gemah
Ripah for Mini Hydro Power Plant
Capacity 2000 kW about terms of
agreement describes, that the PP may
extend the PPA until the lifetime of
the equipments installed in the project
activity.

18.

CL 02
Please provide the supporting
information from the turbine and
generator manufacturer for the
validation of project lifetime and
technical specifications including the
rated capacity

A.4.2

Response No. 1
The EPC contract has been signed for
Engineering,
Procurement
&
Construction Plant of 8 MW mini
hydro
project.
The
technical
specification will be provided for
validation.
Response No. 2
The technical specifications from the
manufacturer of the hydro turbine and
generator will be provided for

Rev 01 (2011-11-01) ,

Version No.:02

received land compensation. Please kindly


project compensation records for validation.
Response No. 2
The supporting documents for the
arrangement of land compensation for the
households involved have been provided for
validation.
CAR16 is resolved & closed.
Response No. 1
Please provide the supporting document to
substantiate that The PP may extend the
PPA until the lifetime of the equipments
installed in the project activity.
Response No. 2
It is confirmed by the PPA /7/, /26/ that the
PP may extend the PPA until the end of
lifetime of the equipments installed in the
project activity.
CL01 is resolved & closed.

Response No. 1
Please provide the technical specifications
from the manufacturer of the hydro turbine
and generator including the rated capacity
for validation.
Response No. 2
The technical specifications from the
manufacturer of the hydro turbine and
generator including the rated capacity has
been provided for validation
CL02 is resolved & closed.
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01 997 9105067713

validation along with the response.


Response No. 1
The project activity is run-off river
project which is taking place in
existing reservoir. The PP has
received approval to use the water for
power generation. There will be no
modification done by PP in existing
reservoir for use of water for power
generation.
Response No. 2
The same details have been included
in section A.2 of the revised PDD,
version 2.1

Response No. 1
The PP has been approved for using
existing reservoir and dam for construction
of a hydropower plant. This is supported by
the Agreement between the PP and GP3A
(Association of farmers) dated 11 August
2011, and Investment Approval from the
Regent of Garut, dated 23 July 2010.
However, please kindly describe this
scenario in the PDD.
Response No. 2
The scenario of the proposed project has
been updated in the revised PDD.
CL03 is resolved & closed.
The declaration from PP on non The PP has provided supporting documents
involvement of public funding in the to confirm no public funding in the project
project activity will be provided for activity /29/.
validation.
CL04 is resolved & closed.

19.

CL 03
Please clarify who is the owner of the
existing dam and whether the project
participant was approved to build a
channel at the existing dam to take
water for power generation. Please
clarify whether the existing dam is
modified when implementation of
project activity

A.4.2

20.

CL 04
Please kindly provide supporting
documents to substantiate no public
funding in the project activity

A.4.4

21.

CL 05
5.1) Please clarify what is Tc in
WACC calculation in section B.5

B.5

The Tc is tax rate and it is provided in The justification for Tc has been updated in
section B.5 of the revised PDD, the revised PDD.
version 2.
CL05 (5.1) is resolved & closed.

5.2) Through interviews with the


project participant during site visit, it
was found that the project participant
was granted a business license on
15th June 2010 with installed capacity
of 2 MW.
a) Please clarify whether there is any
real action was taken to implement
the project prior to 04th August 2011
(project starting date as indicated in
the PDD published for webhosting).

B.5

Response No. 1
The chronology of the events is
presented in section B.5 of the revised
PDD, version 2 for better clarity.
Response No. 2
The supportive documents for all the
events mentioned in the chronology
will be provided along with the
response.

Rev 01 (2011-11-01) ,

Version No.:02

Response No. 1
The chronology of the events has been
updated in section B.5 of the revised PDD.
However, please provide the supporting
documents for all events listed in section
B.5 of the revised PDD.
Response No. 2
All supporting documents for the timeline
of the project activity have been provided
for validation.

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b) Please provide an implementation


timeline of the proposed CDM project
activity which includes key events
and actions such as first meeting for
stakeholder consultation, the date
when the first and second FSRs were
approved, the date when Board of
Director decided to implement the
project, the date when investment
license was granted and revised, the
date when construction works started,
the date when equipment purchase
contract was signed, etc. This was not
yet specified clearly for validation
team to conclude the adequacy of
CDM prior consideration compliance
and starting date of project activity
5.3) Please clarify whether there is
any national and/or sectoral policies
and circumstances in baseline
scenarios as per Annex 3, EB22

22.

Rev 01 (2011-11-01) ,

CL 06
Kindly clarify whether the name of
person / entity determining baseline
and monitoring methodology is
correct

CL05 (5.2) is resolved & closed.

B.5

There are no national and /or sectoral


policies and circumstances that
prevent the chosen baseline scenario
for the project activity.

B.8

Response No. 1
The name of the person and entity
determining baseline and monitoring
methodology is provided in section
B.8 of the revised PDD, version 2.
Response No. 2
Yes. The person/ entity mentioned in
section B.8 of the PDD is also a
project participant as listed in Annex
1 of the PDD and the same is
included in section B.8 of the revised
PDD, version 2.1.

Version No.:02

Its confirmed by the PP that there is no


national and/or sectoral policies and
circumstances in baseline scenarios. This is
cross-checked with registered CDM projects
in host country.
CL05 (5.3) is resolved & closed.
Response No. 1
The name of entity determining baseline
and monitoring methodology has been
updated in section B.8 of the revised PDD.
Please indicate if the person/entity is also a
project participant listed in Annex 1.
Response No. 2
The person/entity mentioned in section B.8
of the PDD is also a project participant
listed in Annex 1 of the PDD, which has
been updated in the revised PDD.

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23.

CL 07
Please clarify what PLTMH means

D.1

24.

CL 08
Please clarify what MHPP means

E.1

Rev 01 (2011-11-01) ,

Version No.:02

The abbreviation for PLTMH which


stands for (Pembangkit Listrik
Tenaga Mikro Hidro) is provided in
section D.1 of the revised PDD,
version 2.
The abbreviation for MHPP (Mini
Hydro Power Project) is provided in
section E.1 of the revised PDD,
version 2.

CL06 is resolved & closed.


The abbreviation for PLTMH has been
explained in section D.1 of the revised
PDD.
CL07is resolved & closed.
The abbreviation for MHPP (Mini Hydro
Power Project) has been explained in
section E.1 of the revised PDD.
CL08is resolved & closed.

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Table 3:
List of forward action requests (FARs)
Validation / Verification Manual
(37) The DOE shall raise a forward action request (FAR) during validation to highlight issues related to project implementation that require review
during the first verification of the project activity. FARs shall not relate to the CDM requirements for registration.
FAR number
Reference
Summary of project owner response
Validation team conclusion
FAR01
The project participant is requested to provide CDM
training plan to the validation team for review

Rev 01 (2011-11-01) ,

B.7.2

The CDM training plan will be conducted in


before the project going into operation. At the
time of site visit the construction of project
activity has not yet finished.
CDM training plan will be provided for
further review in the verification process.

Version No.:02

OK. The response is accepted at this stage.


DOE request to address this issue during
verification.

Page 111

Appendix B
Certificates of Competence

Page
112