Case Study: Environmental Management Aspects of the Combined-Cycle Power Plant Project in Country X

1. Case Study: Environmental Management Aspects of the Combined-Cycle Power Plant Project in Country X Discussion Material For the Moldova Safeguards Training Workshop October 28-31, 2008 By Victor B. Loksha ECA Safeguards Team Europe and Central Asia Region The World Bank

2. Country X would like to improve its energy supply • The country’s Ministry of Energy is the official counterpart • The country’s National Power Company (NPC) is in charge of implementing the project • Main physical component is to build a combined-cycle thermal power plant and connect it to the power grid http://www.worldofstock.com/closeups/BEN2138.php http://en.wikipedia.org/wiki/Combined_cycle

3. Project preparation milestones I. Consulting firm TQE is tasked with: • Selecting the best site, technology, and fuel • Conducting a study of technical, economic, and environmental feasibility at the selected site • Implementing EIA and developing EMP II. Engineering, Procurement and Construction contractor (EPC contractor) will: 1) Implement detailed design 2) Implement construction works, supply and install equipment

4. Site selection Seven possible locations were considered based on the following criteria: • Environmental conditions on site • Air quality concerns • Cost of electricity generation • Socio-economic concerns • Proximity to available transmission lines • Transmission system considerations • Fuel availability • Water and sewer needs • Transportation • Property availability

5. Sea coast of town Z chosen to be the site of the power plant http://eia.csir.co.za/cip/docs/Overview_CIP_Eskom_iGas_13092006.pdf http://www.flickr.com/photos/21281284@N02/2069577002/

6. The wildlife of coastal zone of Town Z is not uniquebut has value http://www.photosight.ru/photos/2814202/

7. Liquid fuel (distillate oil) is chosen as the primary fuel for the plant http://www.dnrec.state.de.us/dnrec2000/Divisions/AWM/ast/trifold%20brochure_clip_image003.jpg

8. Fuel for the plant will be delivered by sea from an offshore terminal • The terminal is 20 km away from the plant site • About 30 deliveries will be made per year by a barge with minimum capacity of 3,000 m3 http://www.fosoil.com/images/aerial.jpg

9. Environmental Impact Assessment includes modeling air pollution induced by the project • Country X has adopted the standards of the European Union for air quality • To demonstrate compliance with these standards, the TQE consultants have utilized the latest US EPA air pollution simulation model (ISCST3)

10. A sewage treatment facility will be provided at the plant • Discharge of treated effluent will be combined with the cooling water discharge http://www.chesapeakebay.net/photos.aspx?menuitem=16856

11. Sea water will be used for cooling • The power plant needs cool water for converting the plant’s exhaust steam back into water • The TQE team chooses the once-through cooling (OTC) system utilizing sea water for cooling • OTC technology is acceptable practice in Country X • The alternative closed-system technology would add $10 million (or 9%) to the cost of the plant

12. Once-through cooling technology • Cooling water will be treated with sodium hypochlorite to eliminate biological fouling • Residual chlorine in the effluent will meet World Bank guidelines (0.2 mg/l) http://www.google.com/imgres?imgurl=http://www.signonsandiego.com/uniontrib/20060414/images/news_factory.jpg&imgrefurl=http://www.signonsandiego.com/uniontrib/20060414/news_1n14intake.html&h=199&w=280&sz=21&tbnid=RhGFRSdxhloJ::&tbnh=81&tbnw=114&prev=/images%3Fq%3Donce-through%2Bcooling%2Bdischarge%2Bphoto&hl=en&sa=X&oi=image_result&resnum=3&ct=image&cd=1

13. Screening devices at the intake of the cooling circuit Bar screen for initial screening Traveling screen for final screening http://www.energy.ca.gov/2008publications/SWRCB-1000-2008-001/SWRCB-1000-2008-001.PDF http://www.fpi-co.com/images/applications-OpenCanalintoPipeline-lg.jpg

14. Return pipe of the cooling circuit ends with an outfall returning water to sea http://www.pacificpinnacles.com/TravelDiveLog/2006/May21_ElectricBeach/bg_coolingwateroutlet.html

15. Environmental Management Plan • Mitigation: Operation and Maintenance Phase

16. Example: Environmental Management Plan B. Monitoring: Operation and Maintenance Phase

17. EMP requirements are incorporated in the legally binding documents • The Project Agreement with NPC includes a provision on the need to implement the EMP • EMP requirements are incorporated in the bidding/contract documents • These requirements are binding for the EPC contractor • Relevant provisions of EMP are also included into contracts for fuel supply

18. Additional impact-specific plans and studies envisaged: Plans and Manuals: • Oil spill response, recovery, and mitigation plan • Emergency response plan • Site drainage and grading plan • Community impact action plan • Health and safety plan • Noise and vibration plan including baseline monitoring • Waste management plan • Employee health and safety manual

19. Additional impact-specific plans and studies envisaged (cont’d) Studies: • Environmental assessment of the final transmission line • Ambient air monitoring including meteorological data • Cooling water intake and discharge structure location study including: • fish studies, seabed flora and fauna, sea temperature monitoring, sediment sampling and analysis

20. Proposed power plant onsea coast of town Z http://eia.csir.co.za/cip/docs/Overview_CIP_Eskom_iGas_13092006.pdf

21. Public consultation and disclosure • EIA report documents adequate public consultation • Public announcements were thorough, transparent, and well distributed • National Agency for Energy and Environment coordinated the process • The meetings were well attended and publicized • The public provided inputs which were reflected in the final EIA and EMP • Final EA report was published in the World Bank’s InfoShop

22. Coast of Town Z before and after the Power Plant is built Before After

23. Attention Seminar participant! • You are the PIU Director at the NPC • You are asked to prepare for a meeting with Dr. Ruffle, a senior representative from an international environmental NGO • You believe that the recently finalized EMP (to be distributed separately) can help you answer Dr. Ruffle’s questions • What kind of issues do you think you need to be especially prepared to discuss?

24. Role Play: Dr. Ruffle’s Questions • Siting of the Plant • Air pollution from the Plant • Fuel supply (risk of oil spill) • Choice of cooling technology (why OTC) • Wastewater disposal • Practical implementation (enforcement) of EMP • Scope of specialized (impact-specific) EMPs

25. Siting of the Plant • Ruffle: In environmental management, like in many other fields, avoidance of damage is considered a better option than mitigation. The World Bank, among others, certainly subscribes to this view in its guidance on Environmental Management Plans[1].Some of the impacts this project will have on the environment might have been completely avoided had a different site been chosen for the project. This particular coastal area of Country X is particularly valuable/vulnerable and only 3 km away from a National Park. How did your experts choose the coastal area of town Z as the site for the project? What kind of criteria did you use to eliminate all the other possible locations? [1] Environmental Management Plans. Environmental Sourcebook Update/ No. 25. January 1999.

26. Air pollution control • Ruffle: How will you manage the air quality concerns at the site you have selected – especially the pollution resulting from fuel oil combustion?

27. Fuel supply: risk of oil spill • Ruffle: Choosing offshore oil as primary fuel is a big environmental risk to take. How many tanker trips per year do you anticipate, and how will you manage the risk of oil spills?

28. The choice of cooling technology:“I am outraged!” • Ruffle: I am outraged that, after so much analysis of environmental impacts, your experts would choose the once-through cooling (OTC) technology to cool the power plant. Why didn’t you choose a closed-cycle cooling system instead? The OTC technology uses the living and breathing sea water as the radiator fluid to run through the plant. Furthermore, the quantities of water involved in this process are enormous. Do you know how much water these systems use? There are estimates[1] that the water demand for a once-through cooling system is 30 to 50 times that of a closed-cycle system. Not only are fish and other marine organisms destroyed by being sucked into the plant at the point of intake, but the thermal and chemical pollution of the sea by the return water coming from the outfall is also very harmful for the aquatic ecology. Would you like to have a few copies of this poster? [1] http://www.lcca.co.uk/upload/pdf/POWER_STATIONS_WATER_DEMAND.pdf

29. Once-through cooling technologyschematic emphasizing damage to aquatic environment http://www.google.com/imgres?imgurl=http://www.signonsandiego.com/uniontrib/20060414/images/news_factory.jpg&imgrefurl=http://www.signonsandiego.com/uniontrib/20060414/news_1n14intake.html&h=199&w=280&sz=21&tbnid=RhGFRSdxhloJ::&tbnh=81&tbnw=114&prev=/images%3Fq%3Donce-through%2Bcooling%2Bdischarge%2Bphoto&hl=en&sa=X&oi=image_result&resnum=3&ct=image&cd=1

30. Wastewater disposal • Ruffle: How will you manage thewastewater coming from the pant?

31. Practical implementation (enforcement) of EMP • Ruffle: I have seenyour EMP and I appreciate the fact that it was on the table when the consultation meetings were held with the local public. I have to admit that it is probably one of the best documents of this sort that I have seen for similar projects. But I have some concerns about its practical implementation. How exactly can you make sure that the mitigation and monitoring measures included in the EMP will be actually enforced?

32. Discussion and Analysis:EMP Strengths and Weaknesses Strengths: • The air pollution control measures are designed to comply with the stricter of the potentially applicable standards (EU, WB) • Cost estimates are available for most items in the EMP and included in the Procurement Plan • EMP requirements are incorporated in the bidding/contract documents (binding for EPC contractor) and into the contracts of suppliers of fuel during operating phase • The EMP has been adequately disclosed, and the local community was actively involved

33. Discussion and Analysis:EMP Strengths and Weaknesses Weaknesses: • The mitigation options in the EMP are limited by the earlier commitments to pursue particular technological solutions (e.g., the once-through cooling system) • Both the technology and the site have been chosen mostly on the basis of narrowly defined (financial) cost minimization and plant efficiency, giving a lower priority to environmental considerations • No siting or technology choices should be eliminated until completion of the detailed EIA

34. Lessons Learned • EMP is not an isolated tool but should be part of the overall good environmental management and decision making • Environmental mitigation is an integral part of decision making and must be considered simultaneously with the analysis of alternative technological and siting choices • The project team may prepare a state of the art EMP, but may still be in a vulnerable position if the upstream decision making is perceived to be flawed • In making choices about the technology, it is more prudent to err on the conservative side and require the technology consistent with the higher degree of environmental protection • The absence of local environmental restrictions on certain technology in Country X is a weak excuse if the environmental credentials of the technology are known to be questioned. • Economic (incl. environmental) rather than just financial costs/benefits need to be part of the analysis of alternatives

35. Thank You!