PROJECT PROPOSAL FOR IMPLEMENTATION UNDER THE KYOTO PROTOCOL - CLEAN DEVELOPMENT MECHANISM

1. PROJECT PROPOSAL FOR IMPLEMENTATION UNDER THE KYOTO PROTOCOL - CLEAN DEVELOPMENT MECHANISM

Presented by: Emmanuel M. K. Amekor (Principal Environmental Officer) VRA – Environment & Sustainable Development Department, Akosombo - Ghana eamekor@yahoo.com and Emmanuel Amonoo-Johnson (Chemical Engineer) Takoradi Thermal PowerStation ejohnson@ttpp.vra.com

2. PROJECT IDEA NOTE (PIN) for Oil to Gas Fuel Switch Project

Project owner: Volta River Authority Sector: Energy/Energy Efficiency (Crude Oil – Gas Fuel Switch project) Address: P O Box MB 77, Accra – Ghana Tel :233-251-20313 Fax:233-251- Main Activity of project owner: Power Generation Location of Project: Aboadze, WR, Ghana GHG emissions to be reduced: CO2 From 1,590,898 T CO2e/yr to 1193174 T CO2e/yr.

3. PROJECT TITLE:

OIL – GAS FUEL SWITCH FOR A 330MW COMBINED CYCLE THERMAL POWER PLANT

4. HOST COUNTRY: GHANA

PROJECT PARTICIPANTS: VOLTA RIVER AUTHORITY

5. Type of ProjectSector: EnergyPrimary Activity: Energy EfficiencyProject LocationCountry: GhanaExact Location : Aboadze, Shama Ahanta East District, Western Region – GHANA

Key Dates of ProjectProject starting date : 2006Project ending date : 2031Project lifetime : 25 yrs. Current Stage of Project: Sourcing of Project finance

6. Organisation

Name of organisation: Volta River Authority Function(s) within project activities: Project Development and Implementation Postal address: P. O. BOX MB 77, Accra Country: GHANA Telephone: 233-21-664941-9, 233-21-221124 Fax: 233-31-21409 E-mail: paffairs@vra.com Telex: 2202 VOLTA GH

7. Administrative Officer Responsible for the Project

Name: Joshua K. Ofedie Job Title: Chief Executive Postal address: P. O. BOX MB 77, Accra Country: GHANA Telephone: 233-21-664941-9, 233-21-221124 Fax: 233-31-21409 E-mail: cex@accra.vra.com Telex: 2202 VOLTA GH

8. Contact Person for Project Activities (if different from the Administrative Officer)

Name: Stephen K. Doku Job Title: Director, Thermal Generation Postal address: P. O. BOX 237, Takoradi Country: GHANA Telephone: 233-31-21700 Fax: 233-31-21409 E-mail: dtgd@ttpp.vra.com Telex: 2202 VOLTA GH

9. BASELINE/EXISTING CONDITIONS

In the absence of project: Existing plant rated at 330MW Technology: 2x110MW GE Frame 9E Gas Turbines and Generators, 1x110MW Steam Turbine and Generator, 2No. Heat Recovery Steam Generators 161.kV substation (switchyard) Associated transmission lines. GHG emissions: 2x 795,449 T CO2e/yr = 1,590,898 T CO2e/yr

10. Barrier to Project going ahead in the absence of CDM

Current Stage of Project: Project owner constructing gas pipeline to deliver gas to existing plant, sourcing funds to finance acquisition of retrofitting accessories Project owner to fall on market financing mechanisms such as Equity, WB/IFC loan, Multi-donor financing of various components with high interest rates and conditionalities.

11. Barrier to Project going ahead in the absence of CDM contd.

Project owner has not yet been able to assemble all the funds for the total project Project to be delayed CDM being considered as one major project financing source Carbon revenue required up-front to finance purchase of retrofitting acessories, construction, installation and commissioning.

12. BRIEF PROJECT DESCRIPTION

The project will involve the conversion of existing gas turbines from oil firing to gas firing. It involves the procurement of various Retrofitting accessories to enable the GTs burn gas instead of oil. The project also includes the construction, installation and commissioning activities. The project will effectively increase the efficiency of the existing plant and ensure the generation of 330MW with cleaner fuel and less GHG emissions from the combustion. The inclusion of water injection technology will ensure the emission of lower NOx in the exhaust to the atmosphere. The project will also will result in a lower per unit cost of power generation at the plant, hence leading to an increase in the utilisation of this more efficient plant under the local dispatch system (SCADA) which controls its operation, as well as lead to a further reduction in CO2 emission in the whole system.

13. GHG BENEFITS OF PROJECT

330MW with cleaner fuel Less GHG emissions from the combustion. Water injection technology will ensure attainment of 42ppm NOx in the exhaust gas Reduction of CO2 emission from present 1,590,898 T CO2e/yr to 1193174 T CO2e/yr. ie equivalent to 29,829,350 T CO2e over the 25yrs. of the plant’s lifetime. Actual annual reductions will be subject to monitoring and verification.

14. Environmental, Socio-Cultural, and Economic Impacts of the project

Non-GHG Environmental Impacts of the Project Water injection will be carried out to reduce NOx emissions from the gas turbines Socio-Cultural Impacts of the project Generation of employment through hiring of additional staff/technicians/graduates No negative socio-cultural impacts are expected since the project will only improve the efficiency and reduce GHG emissions. Economic impacts of the project The project will provide power at a reduced cost to the Ghanaian power utility grid system and generate employment

15. Greenhouse gas impacts of the Project

Baseline Scenario Primary Activity: Fuel switch from oil to gas firing in a combined cycle plant The power plant is assumed operating on crude oil as combustion fuel, and it continues to operate at full 330MW capacity (at 85% availability) with annual emissions of 1,590,898 tons per year of CO2

16. Predicted Project Scenario  Primary Activity: Cleaner Energy Production

The 330MW combined cycle plant will be equipped with necessary accessories and equipment to enable the firing of natural gas as combustion fuel. Thus the same 330MW will be generated with cleaner fuel, less NOx emission. CO2 emissions will reduce to from present 1,590,898 T CO2e/yr to 1193174 T CO2e/yr. tons per year of CO2

17. GHG emission/sequestration calculation methodology

Description of Calculation Methodology for the Reference Scenario CO2 estimates are based on fuel chemistry and the actual rates of consumption in two existing gas turbine models (see calculation) Description of Calculation Methodology for the Project Scenario Levels estimated in the reference scenario are compared with situation with regard to gas instead of crude oil.

18. Compatibility with, and Supportiveness of National Economic Development and Socioeconomic and Environmental Priorities and Strategies

Compatibility with Economic Development and Socioeconomic and Environmental Priorities The project will: Generate same energy output on cleaner fuel, Lower cost/unit of electricity to the Ghanaian economy, Will lead to technology transfer and employment generation and poverty reduction, It will also add momentum to clean independent power development in Ghana. Result in x% net reduction in GHG emissions/kWh of energy

19. Contribution to capacity Building and Technology Transfer

The plant is the first thermal power generating plant in the country hence the project will add momentum to the trend toward more fuel efficient, lower emitting power generation in Ghana and lead to technology transfer into the country

20. Monitoring and Verification of Project Activities and Results

Party that will be monitoring project activities: Volta River Authority Party that will be verifying/validating project results : Not yet identified Date when monitoring plan will become operational (month/year): Information not yet available

21. Monitoring and Verification of Project Activities and Results

Types of data that will be collected: Plant gas fuel consumption Plant electricity output CO2 concentration in stack gas emissions NOX concentration in stack gas emissions

22. Monitoring and Verification of Project Activities and Results

Description of Monitoring and Verification Activities and Schedule for Implementation The developer will verify that the predictions made are established by the actual measured and recorded emissions. A Continuous Emissions Monitoring System equipment already installed on existing plant. All monitoring will be in accordance with the rules, regulations and procedures promulgated by the Ghana DNA, CDM Executive Board (EB) and the UNFCC

23. Explanation of methodology for calculating cost data

The Total project costs as well as the Total project revenues are discounted using the approved government discount rate for attracting project funds. The Net Present Value (NPV) of the project is calculated as the difference between the total costs and total revenues over the whole project lifetime. This value is then annualised or levelised and the cost benefit analysis is carried out. The Internal Rate of Return (IRR) is also calculated in order to determine the returns on the investment on the project. The Cost per Ton of Emission reduction (US$/Ton of CO2e) entailed in the project is calculated as: Annualised Net Present Value Total Emission Reduction due to the project

24. BASELINE SCENARIO COST CALCULATIONS FOR 220MW PLANT

PROJECT COSTS PROJECT REVENUES Equipment costs Power Sales CTGs Generators/ Acessories Cooling water/air system Demin water plant (NOx control) Transformers Switchyard facilities Engineering and Construction Testing/Commissioning Training of Operating Staff Operating Costs Maintenance Costs TOTAL PROJECT COSTS TOTAL PROJECT REVENUES Net Present Value (Total Project Costs-Total Project Revenues) Annualised over project life time of 25 years

25. PROJECT SCENARIO COST CALCULATIONS FOR 330MW PLANT

PROJECT COSTS PROJECT REVENUES Equipment costs Power Sales Gas skids CER Revenue Retrofitting accessories Engineering and Construction Testing/Commissioning Training of Operating Staff Operating Costs Maintenance Costs TOTAL PROJECT COSTS TOTAL PROJECT REVENUES Net Present Value (Total Project Costs-Total Project Revenues) Annualised over project life time of 25 years

26. THANK YOU FOR YOUR ATTENTION

Contact Information: Emmanuel Amonoo Johnson (Chemical Engineer) Takoradi Thermal Power Station, P. O. Box 237, Takoradi - Ghana ejohnson@ttpp.vra.com