PPD

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.
1
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CLEAN DEVELOPMENT MECHANISM

PROJECT DESIGN DOCUMENT FORM (CDM- PDD)
Version 03.1 - in effect as of: 28 July 2006
CONTENTS
A.
General description of project activity
B.
Application of a baseline and monitoring methodology
C.
Duration of the project activity / crediting period
D.
Environmental impacts
E.
Stakeholders comments
Annexes
Annex 1: Contact information on participants in the project activity

Annex 2: Information regarding public funding
Annex 3: Baseline information
Annex 4: Monitoring plan
Annex 5: Copy of Newspaper advertisement for Local stakeholders meeting
Annex 6: Photographs of local stakeholders meeting
Appendix 1 : Ex-ante CER estimates and Investment analysis
PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1

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SECTION A. General description of project activity

A. 1.
Title of the project activity:
25 MW biomass based power plant in Lahad Datu in Sabah, Malaysia

Version
:
01
Date
:
10/01/2009
A. 2. Description of the project activity:
(1)
Purpose of project activity
The main purpose of the project activity is to establish a greenfield power plant using Empty Fruit
Bunches (EFB), an abundantly available palm oil mill biomass residue, as fuel and supply the net
electricity after inhouse consumption to the state electric grid for sale displacing fossil fuel dominated
grid electricity .
(a) Scenario existing prior to the start of the project activity
The project activity is a Greenfield power plant from renewable biomass.
The palm oil mills process Fresh Fruit Bunch (FFB) from palm plantations to produce Crude Palm Oil
(CPO) as the main product. In the process, a number of solid and liquid residues are produced as follows:
Solid biomass residues :
Liquid waste
:
Mesocarp fibre, Palm Kernel Shells and Empty Fruit Bunches (EFB).
Waste water generally known as Palm Oil Mill Effluent (POME).
S. D. Resources Sdn. Bhd. (Project Proponent) proposes to establish a greenfield 25 MW power plant
in Lahad Datu utilising EFB as fuel . The project proponent would also be establishing a new 120 ton /
hour palm oil mill in the same premises. Therefore most of the EFB required for the project activity
would be sourced from its own mill and the balance would be sourced from other palm oil mills. The
proposed palm oil mill is also a Greenfield project to be implemented in two phases.
Project Scenario
The project activity is installation of a new 25 MW power plant implemented in two phases as shown in
the table A-1:
Table A-1- Details of phases of the project activity
Phases
I phase
II phase
Components of the project activity

Expected commissioning date
- Fuel preparatory system
01 January 2010
- One 75 ton / hour boiler
- One 25 MW fully condensing
turbine
One 75 ton / hour boiler
01 July, 2010
EFB is the biomass residue from the palm oil mill which is generally disposed in palm plantations and
allowed to decay in aerobic conditions. Other biomass residues of the palm oil mill such as mesocarp

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fibre and palm kernel shells are good sources of energy and are generally used for energy generation
purposes.
EFB is produced at a rate 21- 23 % of FFB processed in the mill and disposed in the palm plantations and
subjected to aerobic decay. Therefore, EFB is abundantly available in Malaysia. But EFB had been a
difficult biomass to handle due to its high moisture content and bulky nature. The project proponent
proposes to utilise only the difficult EFB as fuel source. EFB would be combusted in a furnace and the
heat would be used in a boiler to produce high pressure steam. The steam is passed on to the turbine to
produce electricity. The net electricity after the parasitic load of the power plant would be exported to the
Sabah grid of Sabah Electricity Supply Berhad (SESB), the state electric utility in Sabah state of
Malaysia.
Pre project scenario: This is a Greenfield biomass based power project.
(b) Baseline scenario
The baseline scenario is that the power generated by the project activity would in the absence of the
project activity be generated by the power plants in the grid and biomass residues would in the absence of
the project activity be left to decay.
Reduction of greenhouse gases by the project activity
The project activity would supply the electricity to the East Coast grid of Sabah Electricity Supply
Berhad (SESB). The installed power capacity of Sabah grid as of 31 December 2006 is given in Table A2
Table A-2- Installed power capacity mix of Sabah grid
Available capacity 1
% share
Gas based generation
226 MW
34.82 %
Oil based generation
372 MW
57.32 %
Hydro electric generation
51 MW
7.86 %
649 MW
100.00 %
Power source
Total
From the above table, it may be noticed that about 92.14% of the available capacity of the Sabah grid is
thermal generation with fossil fuel based sources and only 7.86 % of available capacity is from
hydropower. That is, the Sabah grid is powered predominantly by fossil fuels based generation. Hence,
the electricity supplied by the project activity would displace equivalent amount of electricity supplied
predominantly by fossil fuel based sources and associated CO2 emissions.
View of project participants on the contribution of project activity to sustainable development
Environmental sustainability
The project activity generates electricity from solid biomass wastes a renewable source of energy. The
project activity will lead to reduced disposal of waste products from the palm oil mills and increase the
utilisation of the energy content in wastes. The energy generation from a renewable source of energy
contributes for environmental sustainability.
Source : National Energy Balance 2006, Ministry of Energy, Water and Communications, Malaysia

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Additionally, the project activity would prevent the methane emissions due to aerobic decay of EFB in
the palm plantations and produces electricity without much greenhouse gas (GHG) emissions.
Thus, the following environmental benefits are derived from the project activity:
Produces electricity from a renewable energy source.
Prevents methane emissions due to decay of EFB in the palm plantations.
Produces electricity without or very less GHG emissions.
Has very little negative impact on the environment.
The project activity would install necessary pollution control equipment to minimise the emissions of
particulates and other pollutants.
Social sustainability
The project activity would contribute for the following social benefits:
Contributes to meet Malaysia s Ninth Plan target of 350 MW generation from renewable energy
New employment oppurtunities for the local population improving the social living standards of
the local community
Improve the technical skills of staff in the operations and maintenance of an efficient electricity
generation plant
New jobs for skilled manpower during operation of the project activity
Increase in local business like transportation, maintenance, parts supply, food and other services
which would improve the social living standards of the local community
Economical sustainability
Decreasing the countrys dependence on imported and fast depleting fossil fuels for generation of
electricity
Improvement in local economic activity
During operation of the project, direct and indirect employment opportunities would be available
for the local community leading to economical benefits.
Savings in precious foreign exchange due to reduction in import of fuels.
Technological sustainability
The project activity would establish a 69 bar pressure boiler probably for the first time in palm oil
biomass power plant in Malaysia and therefore would employ a technically better system than
that of generally used in Malaysia.
The project activity would contribute for the countrys policy to promote the use of renewable
energy.
All the above would contribute for the sustainable development.
A.3.
Project participants:
Name of Party involved (*)

((host) indicates a host Party)
Private and/or public

entity(ies) project
participants (*)
(as applicable)
Kindly indicate if the Party

involved wishes to be
considered as project
participant
(Yes/No)
Malaysia (Host)
S.D. Resources Sdn.Bhd.

(Private entity)
No

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United Kingdom
Natsource Europe Ltd
No
(*) In accordance with the CDM modalities and procedures, at the time of making the CDM-PDD
public at the stage of validation, a Party involved may or may not have provided its approval. At the
time of requesting registration, the approval by the Party (ies) involved is required.
A.4.
Technical description of the project activity:

A.4.1. Location of the project activity:
A.4.1.1.
Host Party(ies):
A.4.1.2.
Malaysia
Region/State/Province etc.:
Sabah state
A.4.1.3.
City/Town/Community etc:
Lahad Datu
A.4.1.4.
Detail of physical location, including information allowing the
unique identification of this project activity (maximum one page):
The project activity would be located in the Kwantas complex in Lahad Datu town in Tawau
division in Sabah state in East Malaysia on the Borneo island. Lahad Datu is in eastern part of Sabah
state. Lahad Datu has an airport for domestic flights with connections to state capital Kota Kinabalu and
other parts of the country. The physical co ordinates of the location of the project activity are in 5 01
21 N latitude and 118 2142 E longitude
The location of the project activity is given in the following figures.
Sabah
state
Figure A-1 : Map showing location of Sabah state in Malaysia map

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Lahad Datu
Location of
the project
activity
Figure A-2 : Map showing location of Lahad Datu in Sabah state

A.4.2. Category(ies) of project activity:
The project activity is categorised as follows:
Scope number
:
1
Sectoral Scope
:
Energy industries (renewable - / non-renewable sources)
A.4.3. Technology to be employed by the project activity:
The project activity is the installation of new Greenfield 25 MW EFB based power plant.
The fuel for the new power plant would be EFB from the palm oil mills. EFB due to its high moisture
content and bulky nature has to undergo some preparation to obtain better combustion properties before
being used as fuel in boilers.
EFB is at first fed to a roller crusher where it is crushed and the moisture content of EFB is reduced from
63 67 % (considered 65 % for calculation purposes) to about 43 47 % (considered 45 % for
calculation purposes). Then EFB is taken through a conveyor to a height of 23 metres from ground level
to feed buffer silos that in turn feed EFB into the boiler furnace.
Two boilers of 75 ton / hour one would be established in the first phase and one would be implemented
in the second phase of the project activity- operating at 69 bar pressure would utilise the heat to produce
high pressure steam. The steam is passed on to a 25 MW fully condensing steam turbine to produce
electricity. The net electricity after auxiliary consumption and electricity for the proposed palm oil would
be exported to the grid.

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(a)
Details of main manufacturing equipment
Specification of Boiler
Capacity
Working pressure
Type
Temperature
Efficiency
Type of grate
Quantity of boiler
Make
:
:
:
:
:
:
:
:
75 ton / hour
69 bar
Water tube
485 C super heated steam
86%
Inclined vibrating grate combined with moving grate
2
Jinan, China
Boiler would be complete with following accessories:

Boiler drums, tubes and headers
One draft air fan, one Induced draft fan, one secondary air fan
Roots blower
Boiler feed water regulator
Deaerator, feed water pumps, distribution header
Drainage pump. Drainage flush tank
Furnace dosing device
Super heater
Economiser
Air pre heater
Bag filter
Boiler control system
Boiler water sampling cooler
Interconnecting piping
50 metres high stack
Specification of Turbine
Capacity
Turbine Type
:
:
Working pressure
Voltage of generation
Quantity
:
:
:
25 MW
Fully Condensing, horizontal, impulse,
Multistage, axial flow and geared
69 bar
11 kV
1
(b) Type and levels of services

The project activity would be implemented in two phases. One boiler and the 25 MW turbine would be
established in the first phase of the project activity and the second boiler would be implemented in
second phase of the project activity.
Although 25 MW turbine would be installed in the first phase of the project activity, the actual capacity
of generation would be 12.5 MW only, as only one boiler would be installed in the first phase of the
project activity. The second boiler would be installed in the second phase of the project activity.

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Expected generation of electricity by the project activity

The expected quantity of net electricity generated by the project activity in both the phases is given in
Table A-3.
Table A-3 Expected generation of the project activity
Description
Installed capacity
Plant utilisation factor
Gross generation
Auxiliary consumption and
electricity supplied to the mill
Net electricity supplied to the grid
I phase ( first 6 months of

operation)
12.5 MW
II phase
75%
85%
25 MW
41,063 MWh during first 6 months
186,150 MWh/ year
6,345 MWh during first 6 months
27,132 MWh/ year
34, 7187 MWh during first 6 months
159,018 MWh/ year
(c) Greenhouse gases involved in the project activity

Baseline emissions
The project activity prevents the quantity of EFB utilized in the project from decay (mainly aerobic
decay) and supplies electricity to the grid. Therefore the project activity would claim credits for emission
reductions to avoidance of aerobic decay of biomass and due to the electricity displaced by the project
activity. Therefore project activity would reduce CO2 emissions and methane emissions.
Project emissions
The emissions due to the project activity would be mainly
CO2 emissions due to consumption of diesel during start up of the boilers
CO2 emissions due to consumption of diesel for transportation of EFB to the project activity
CO2 emissions due to consumption of electricity for fuel preparatory system and
CH4 emissions due to combustion of biomass in the project activity.
A.4.4. Estimated amount of emission reductions over the chosen crediting period:
Table A- 4: The total GHG emission reductions in t CO2e over the crediting period
Years
Annual estimation of emission

reductions in tonnes of CO2e
Year 1
83,780
Year 2
128,297
Year 3
128,297

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Year 4
128,297
Year 5
128,297
Year 6
128,297
Year 7
128,297
Year 8
128,297
Year 9
128,297
Year 10
128,297
Total estimated reductions (tonnes of CO2e)
1,238,454
Total number of crediting years
10
Annual average over the crediting period of

estimated reductions (tonnes of CO2e)
123,845
A.4.5. Public funding of the project activity:

The project activity does not have any public funding from the Annex I Parties. The project activity is
financed by internal resources and loan from commercial banks in Malaysia.
SECTION B. Application of a baseline methodology
B.1.
Title and reference of the approved baseline methodology applied to the project activity:
The project activity applies the following approved baseline methodology:

Title : Version 06.2 of ACM0006 - Consolidated methodology for grid-connected electricity generation
from biomass residues
The methodology also refers to the following tools for specific parts of the calculations:
Version 02.2 of Combined tool to identify the baseline scenario and demonstrate Additionality
Version 04 of Tool to determine methane emissions avoided from disposal of waste at a solid
waste disposal site
Version 01 of Tool to calculate baseline, project and /or leakage emissions from electricity
consumption
Version 02 of Tool to calculate project or leakage CO2 emissions from fossil fuel combustion
B.2.
Justification of the choice of the methodology and why it is applicable to the project activity
This consolidated methodology covers a number of different project types for power generation with
biomass residues.
The consolidated methodology ACM 0006 (version 06.2) has a number of applicability criteria discussed
in the table B.1 below.

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Table B-1 Justification of methodology

Applicability criterion
The methodology is applicable to biomass residue
fired electricity generation project activities,
including cogeneration plants
The project activity may include the following
activities or combinations of these activities :
The installation of a new biomass residue fired
power plant at a site where currently no power
generation occurs (greenfield projects); or
The installation of a new biomass residue fired
power plant, which replaces or is operated next
to existing power plants fired with either fossil
fuels or the same type of biomass residues as in
the project plant (power capacity expansion
projects); or
The improvement of energy efficiency of an
existing power plant (energy efficiency
improvement projects), e.g. by retrofitting the
existing plant or by installing a more efficient
plant that replaces the existing plant; or
The replacement of fossil fuels by biomass residues
in an existing power plant ( fuel switch
projects)
No other biomass types than biomass residues as
defined (Biomass residues are defined as biomass
that is a by-product, residue or waste stream from
agriculture, forestry and related industries. This
shall not include municipal waste or other wastes
that contain fossilized and/or non-biodegradable
material - small fractions of inert inorganic material
like soil or sands may be included) are used in the
project plant and these biomass residues are the
predominant fuel used in the project plant (some
fossil fuels may be co- fired)
For projects that use biomass residues from a
production process (e.g. production of sugar or
wood panel boards), the implementation of the
project shall not result in an increase of the
processing capacity of raw input (e.g. sugar, rice,
logs, etc) or in other substantial changes (e.g.
product range) in this process;
The biomass residues used by the project facility
should not be stored for more than one year;
Project compliance with the criterion

The project activity is a biomass residue fired
electricity generation project activity.
No significant energy quantities, except from

transportation or mechanical treatment of the
biomass residues, are required to prepare the
There is only simple mechanical treatment of the

biomass residues before they are used as fuel.
Therefore, energy quantities required are not
The project activity is installation of a new biomass

residue fired power plant at a site where no power
generation occurs (greenfield project) ;
The biomass residues used as fuel in the project

activity are Empty Fruit Bunch (EFB) from palm oil
mills. These residues contain no fossilized waste or
municipal solid waste. EFB, the biomass residues
are the predominant fuel used in the project activity.
Other types of residues, other than that covered by
the definition of biomass residues would not be
used in the project activity.
The utilisation of the biomass residues does not

affect the production process of the palm oil mills
as the production of crude palm oil is guided by the
harvesting and demand in the market. The project
activity will not result in any change in the
processing capacity or product.
The biomass residues used by the project facility are
not stored for more than a year

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Applicability criterion
biomass residues for fuel combustion, i.e. projects
that process the biomass residues prior to
combustion (e.g. esterification of waste oils)
Project compliance with the criterion

significant.
In addition to the above, approved consolidated methodology ACM0006 - version 06.2 also specifies that
the project activity should comply with baseline scenario in Table 2 of the methodology.
As per table 2 of the methodology, the project activity fully complies with the scenario 2 as given below
in Table B -2:
Table B-2 Justification of scenario
Scenario 2 of Table 2
The project activity involves the installation of a
new biomass residue fired power plant at a site
where no power was generated prior to the
implementation of the project activity. The power
generated by the project plant is fed into the grid or
would in the absence of the project activity be
purchased form the grid. The biomass residues in
the absence of the project activity be dumped or
left to decay or burnt in an uncontrolled manner
without utilizing it for energy purposes. In case of
cogeneration plants, the heat would in the absence
of the project activity be generated in boilers fired
with fossil fuels, or by other means not involving
the biomass residues. This may apply, for example,
where prior to the project implementation heat has
been generated in boilers using fossil fuels.
Project activity compliance

The project activity involves installation of a
new biomass residue fired power plant at a site
where no power was generated prior to the
implementation of the project activity.
The power generated by the project plant is fed
into the grid.
The biomass residues would, in the absence of
the project activity, is left to decay.
The project activity is not a cogeneration plant
and therefore rest of the criteria is not
applicable.
Since all the applicability conditions of the methodology and the baseline scenario are fully met, this
methodology is applicable for the project activity.
B.3.
Description of how the sources and gases included in the project boundary
Table B.3: Sources and gases included in the project boundary
Baseline
Source
Grid electricity
generation
Heat generation
Gas
CO2
Included
CH4
Excluded
Justification / Explanation
Main emission source and calculated as per version 06.2
of ACM 0006.
For the purpose of simplification this is conservative.
N2O
Excluded
CO2
Excluded
Not applicable as the project activity is a power plant
CH4
Excluded
Not applicable
N2O
Excluded
Not applicable

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Source
Uncontrolled
burning or decay
of biomass
residues
Gas
CO2
Excluded
CH4
Included
Methane emissions for aerobic decay of

considered.
N2O
Excluded
CO2
Included
CH4
Excluded
Emissions due to use of fossil fuel in the project activity

and using electricity for fuel preparation would be
included as emissions.
It is assumed that CH4 emissions to be very small.
N2O
Excluded
It is assumed that N2O emissions to be very small.
CO2
Included
Emissions due to consumption of diesel used for

transportation of EFB would be included as emissions.
CH4
Excluded
Not considered for the purpose of simplification
N2O
Excluded
Not considered for the purpose of simplification
CO2
Excluded
CH4
Included
N2O
Excluded
CO2
CH4
N2O
Waste water from CO2
the treatment of
biomass residues
CH4
Excluded
CO2 emissions from biomass are considered carbon

neutral.
Methane emissions from the utilisation of the biomass
as fuel are calculated and included in the project
emissions.
For the purpose of simplification. It is assumed that N2O
emissions to be very small.
The biomass will only be stored for a short period of
time.
On-site fossil fuel

and electricity
consumption due
to the project
activity (stationary
or mobile)
Project emissions
Off site
transportation of
biomass
Combustion of
biomass residues
for renewable
electricity and/or
heat generation
Storage of
biomass
N2O
Excluded
Excluded
Excluded
Justification / Explanation
Biomass is considered to be carbon neutral.
EFB are
The waste water quantity is expected to be very less.

The wastewater from the project activity would be sent
to the treatment plant and treated along with the
wastewater from the mill in closed anaerobic digesters
to recover methane and methane would be destructed in
the boilers or flared off. Since there are no methane
emissions due to this, these methane emissions are not
included.

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Project boundary
The project boundary of the project activity is shown in Fig B-1.
Fig B - 1 Project boundary
Project Boundary
Empty Fruit Bunch from

own palm oil mill and
other palm oil mills
Fuel preparation
system
75 ton / hr Boilers
Steam
25 MW Turbine
Electricity to the mill
To SESB Grid
To Consumers

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B.4.
Description of how the baseline scenario is identified and description of the identified
baseline scenario:
The identification of the baseline scenario is in accordance to ACM 0006 (version 06.2) with
demonstration of additionality as per version 02.2 of the Combined tool to identify the baseline scenario
demonstrate additionality hereinafter referred to as Combined Additionality Tool.
The Combined Additionality Tool prescribes four steps to establish the baseline scenario and demonstrate
additionality:
STEP 1.
STEP 2.
STEP 3.
STEP 4.
Identification of alternative scenarios

Barrier analysis
Investment analysis (if applicable)
Common practice analysis
The first and second steps would be used to identify the baseline scenario of the project activity.
STEP 1.
Identification of alternative scenarios
Step 1a.
Define alternative scenarios to the proposed CDM project activity
Pursuant to the Combined Additionality Tool, project proponent shall identify all alternatives scenarios
that are available to the project proponent and that provide outputs or services with comparable quality,
properties and application areas as the proposed CDM project activity.
In applying Step 1 of the Combined Additionality Tool, ACM0006 (version 06.2) requires realistic and
credible alternatives should be separately determined regarding:
How power would be generated in the absence of the CDM project activity;
What would happen to the biomass residues in the absence of the project activity; and
In case of cogeneration projects: how the heat would be generated in the absence of the project
activity.
Since this is not a cogeneration project, baseline scenario for heat is not relevant and hence not identified
for heat.
The plausible baseline scenarios for power generation identified in ACM0006 (version 06.2) are set out
in Table B4 with comments and conclusion for each plausible baseline scenario discussed in the
corresponding right columns.
Table B.4: Realistic and credible alternatives for power generation:
Plausible
baseline
scenarios for
power
generation
Description
Comments
Realistic
and
credible
alternative?
(Yes/No)

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Plausible
baseline
scenarios for
power
generation
P1
Description
Comments
P3
The generation of power in an

existing captive power plant,
using only fossil fuels.
There is no existing captive

power plant using fossil fuels.
No
P4
The generation of power in the

grid.
In absence of the project activity,

the power generated by the
project activity would be
generated in the grid.
Yes
P5
The installation of a new biomass

residue fired power plant, fired
with the same type and with the
same annual amount of biomass
residues as the project activity,
but with a lower efficiency of
electricity generation (e.g. an
efficiency that is common
practice in the relevant industry
sector) than the project plant and
therefore with a lower power
output than in the project case.
The project activity does not

claim to be an energy efficiency
project. There is no common
practice of installing lower
efficiency electricity generation
in grid connected electricity
generation plants. Thus the
installation of a lower efficiency
power plant at the site would not
be a realistic and credible
alternative.
No.
P6
The installation of a new biomass

residue fired power plant that is
fired with the same type but with
a higher annual amount of
biomass residues as the project
activity and that has a lower
efficiency
of
electricity
generation (e.g. an efficiency that
is common practice in the
relevant industry sector) than the
The project activity does not

claim to be an energy efficiency
project. There is no common
practice of installing lower
efficiency electricity generation
in grid connected electricity
generation plants. Thus the
installation of a lower efficiency
power plant at the site would not
be a realistic and credible
No.
P2
Realistic
and
credible
alternative?
(Yes/No)
Yes.
The proposed project activity not This could be an alternative but
undertaken as a CDM project
would not be a baseline scenario
activity.
as this option is economically
attractive as seen in subsequent
section.
No.
The continuation of power There is no existing power plant
generation in an existing biomass in the project site. Therefore,
residue fired power plant at the this is not a realistic alternative
project site, in the same
configuration, without retrofitting
and fired with the same type of
biomass residues as (co-)fired in
the project activity.

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Plausible
baseline
scenarios for
power
generation
P7
P8
P9
Description
Comments
project activity. Therefore, the alternative.

power output is the same as in the
project case.
The retrofitting of an existing Since there is no existing power
biomass residue fired power, fired plant, this is not an alternative.
with the same type and with the
same annual amount of biomass
residues as the project activity,
but with a lower efficiency of
electricity generation (e.g. an
efficiency that is common
practice in the relevant industry
sector) than the project plant and
therefore with a lower power
output than in the project case.
The retrofitting of an existing
biomass residue fired power that
is fired with the same type but
with a higher annual amount of
biomass residues as the project
activity and that has a lower
efficiency
of
electricity
generation (e.g. an efficiency that
is common practice in the
relevant industry sector) than the
project activity.
The installation of a new fossil
fuel fired captive power plant at
the project site.
Realistic
and
credible
alternative?
(Yes/No)
No
Since there is no existing power

plant, this is not an alternative
No
The objective of the project

activity is to establish a grid
connected power plant and not a
captive power plant. Moreover,
there is a huge availability of
biomass residues in and around
the project area. Hence, to
establish a captive power plant
using fossil fuels is not a realistic
and credible alternative.
No
Pursuant to Table B4, the realistic and credible alternatives identified for power generation are: P1 and
P4

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Alternatives for use of biomass residues

Since only one type of biomass residue - EFB - would be used in the project activity, alternatives are
identified only for EFB.
Table B.5: Realistic and credible alternatives for use of EFB

Plausible
baseline
scenarios for
EFB
B1
B2
B3
Description
Comments
The biomass residues are

dumped or left to decay under
mainly aerobic conditions.
This applies, for example, to
dumping and decay of biomass
residues on fields.
The common practice in the

palm oil industry is to dump the
EFB in palm plantations where
EFB decays mainly in aerobic
conditions.
Therefore, this is a realistic and
credible alternative
The common practice is dump
or leave to decay in fields.
There are no landfills with a
depth of more than 5 metres to
dispose EFB. Therefore, this is
not a realistic and credible
alternative.
The biomass residues are

dumped or left to decay under
clearly anaerobic conditions.
This applies, for example, to
deep landfills with more than 5
meters. This does not apply to
biomass residues that are
stock-piled or left to decay on
fields.
The biomass residues are burnt
in an uncontrolled manner
without utilizing it for energy
purposes.
B4
The biomass residues are used

for heat and/or electricity
generation at the project site
B5

for
power
generation,
including cogeneration, in
other existing or new gridconnected power plants.
Open burning of biomass

residues is prohibited according
to the Malaysian Legislation
Environmental Quality Act
1974 (amended 2000).This is
not a realistic and credible
alternative.
The raw material for the project
activity is EFB and usual
practice of disposing EFB is
either dumping in palm
plantations for aerobic decay.
Therefore, this is not a realistic
and credible alternative.
EFB is a difficult fuel to handle.
All the existing cogeneration
plants utilise other biomass
residues such as palm kernel
shells and mesocarp fibre as
these have a good calorific
value and easy to handle. Few
projects use EFB as fuel and all
Realistic and
credible
alternative?
(Yes/No)
Yes
No.
No
No
No

CDM Executive Board
page 18
Plausible
baseline
scenarios for
EFB
Description
B6

for heat generation in other
existing or new boilers at other
sites.
B7

for other energy purposes,
such as the generation of
biofuels
B8

for non-energy purposes, e.g.
as fertilizer or as feedstock in
processes (e.g. in the pulp and
paper industry)
Comments
these project activities are either

CDM projects or under
validation
process
for
registration. Therefore, this
could not be a baseline scenario.
EFB is a difficult fuel to handle
due to its high moisture content
and bulky nature. Costs of fuel
preparation and associated risks
involved are big and rendering
such projects not commercially
feasible. Thus this is not a
realistic and credible alternative
and could not be a baseline
scenario.
The technology to convert palm
oil mill biomass residues into
biofuels is still in a laboratory
scale 2 and thus it is not a
realistic and credible alternative
for the project proponent.
The common practice of palm
oil industry was to dump EFB
in fields. Due to the nature of
EFB, EFB could not converted
into fertilizer. But technologies
are available to convert it as
Compost. Few projects are
being developed to convert EFB
into compost but all these
projects are being developed as
CDM projects. Manufacture of
compost from EFB has several
technical and financial barriers
as several projects of EFB
conversion to compost are
registered as CDM projects.
Few of the barriers listed in
CDM registered projects are :
- No established market for
Realistic and
credible
alternative?
(Yes/No)
No
No
No
Danish Technical University, 2006: Ethanol potential for Empty Fruit Bunches pre-treated by Wet-Explosion
downloaded from www.eib.ptm.org.my

CDM Executive Board
page 19
Plausible
baseline
scenarios for
EFB
Description
Comments
Realistic and
credible
alternative?
(Yes/No)
organic compost in
Malaysia
- Farmers mindset to use
organic compost as against
inorganic fertiliser
- Long distances of transport
of compost to the mills due
to remote location of the
mills
EFB to paper
There is no project operating
which
utilizes
EFB
to
manufacture paper although
researches are being undertaken
for such conversion.
This clearly shows that the
utilization of EFB to produce
compost or paper would not be
part of baseline scenario.
Pursuant to Table B.5A, the realistic and credible alternative identified for use of EFB is: B1
Sub-step 1b. Consistency with mandatory applicable laws and regulations
Baseline scenario B3 in Table B.5 refers to uncontrolled burning of biomass residues. This baseline
scenario is not in compliance with existing Malaysia legislation. Open burning of biomass residues is
prohibited according to The Malaysian Legislation Environment Quality Act 1974 (amended 2000).
Thus, these baseline scenarios have thus been disregarded as realistic and credible alternatives.
Following Step 1 of the Combined Additionality Tool i.e. Identification of alternative scenarios, the
following realistic and credible alternatives are identified:
For power
P1 and P4.
Heat is not relevant for the project activity

For biomass residues :
B1
Based on the above discussions, the most credible combinations of baseline scenarios are as follows:-

CDM Executive Board
page 20
1.
Generation of power in the grid (P4) and biomass residues left to decay (B1) which is
consistent with Scenario 2 of Table 2: Combinations of project types and baseline scenarios
applicable to this methodology prescribed in ACM0006 (version 06.2) (Alternative 1);
2.
The proposed project activity not undertaken as a CDM project activity (P1 and B1)
(Alternative 2)
STEP 2.
Barrier analysis
This step serves to identify barriers and to assess which alternatives are prevented by barriers discussed in
Sub-step 2a below.
As prescribed in ACM0006 (version 06.2), the barrier analysis consists of two sub-steps namely:
Sub-step 2b:
Identify barriers that would prevent the implementation of alternative scenarios identified
in Step 1 above.
Eliminate alternative scenarios which are prevented by the identified barriers
Sub-step 2a.
Identify barriers that would prevent the implementation of alternative scenarios
Sub-step 2a:
Sub-step 2a requires the establishment of a complete list of realistic and credible barriers that may
prevent alternative scenarios to occur.
The complete list of realistic and credible barriers that may prevent implementation of alternative
scenarios are analysed as follows:
Investment barriers
Technology barriers
Lack of prevailing practice
Market barriers
Sub-step 2b.
Eliminate alternative scenarios which are prevented by the identified barriers
This step identifies alternative scenarios which are prevented by at least one of the barriers listed in Substep 2a above and eliminate those alternative scenarios from further consideration.
Alternatives to power generation:
Out of the nine (9) alternatives to power generation analysed in Sub-step 1a and Sub-step 1 b above, only
alternative P1 and P4 can be considered as realistic and credible baseline scenarios and are subjected to
barrier analysis prescribed in Step 2.
Table B.6: Barrier analysis for alternatives to power generation
Barrier
P1:
Alternatives to power generation

Proposed project activity not
P4 :
Generation of power in the grid
activity.

CDM Executive Board
page 21
Barrier
P1:
Investment

P4 :
activity.
Power production based on biomass for No investment barriers

grid has met strong investment barriers in
Malaysia. The barriers are mainly the
following 3 :
i. Tariff not meeting market IRR
expectations as explained in
Investment analysis;
ii. Lack of long term fuel supply;
iii. Lack of financing; and
iv. Certain provisions in Renewable
Energy Power Purchase Agreement
(REPPA) unacceptable to project
developers.
It may also be seen from Investment
analysis in next step Investment
Analysis that the returns from the project
activity are not sufficient to make the
project financially attractive.
The EFB based power projects that have
been
implemented
or
under
implementation are either registered as
CDM projects or under validation
process. Following is the list of EFB
based power projects:
Lahad Datu Edible Oil (Reg. No.

395)
Sandakan Edible Oil (Reg. No. 402)
Sahabat Empty Fruit Bunch Biomass

(Reg. No. 288); and
Kunak Bio Energy Project (in

process for registration as a CDM
project activity)
Kina Biopower plant (Reg. No.

0385) CDM project
Seguntor Bioeenrgy plant - (Reg.

No. 0386) - CDM project.
Bandar Baru Serting Biomass project

Regn. No. 1091 CDM project
Erik Dugstad et al 2007: Options for implementation of the RE target in 9th Malaysia Plan. Page 3 Summary
Downloaded from www.eib.ptm.org.my

CDM Executive Board
page 22
Barrier
P1:

P4 :
activity.
Distance of the grid interconnection point

Usually palm oil mills are located in
remote places and the distance from the
mill to the grid interconnection point is
quite far. This calls for high investment
cost for the transmission line from the
generation point to the interconnection
point.
Technology
Difficulties in employing EFB as fuel 4

Clinkers and slags are formed in the
surface of the boilers using EFB as a fuel
and this has the following effects:
Damage to boiler tubes by direct
abrasion;
Damage to boiler tubes due to impact

of dropping large mass of
clinker/slag; and
Reduction in boiler efficiency due to

formation of slag/clinker layer on
boiler tubes
Fuel preparation
The EFB is a bulky biomass and has high
moisture content. Therefore it is
necessary to subject EFB to some pre
treatment before being used as fuel. The
equipment used in the preparation of the
EFB fuel would generally experience
significant wear and tear due to the
presence of high silica content in the EFB
resulting in an increase in the
maintenance cost.
High Pressure boilers
It is the common practice in the palm oil
industry to employ low pressure boilers
usually operating at 20 23 bar pressure
and low efficient electricity conversion
system just enough to cater to the energy
requirements of the mill. The project
Experience from operating plant
No technology risk

CDM Executive Board
page 23
Barrier
P1:

P4 :
activity.
activity would employ high pressure

boiler operating at 69 bar pressure. There
is not much experience with high pressure
boilers in palm oil industry. To the best of
our knowledge, there is no project activity
using palm oil biomass residues which
employs 69 bar pressure boiler. The
project activity would probably be the
first of its kind to employ 69 bar pressure
boiler in Malaysia.
Risk of technological failure: In light of
the above, the project activity faces
significant risks in performance of the
technology.
Lack of
prevailing
practice
The grid connected electricity generation Power from the grid is the prevailing
projects is not a common practice in the practice
region.
There are about 112 palm oil mills and 9
palm oil refineries in Sabah state. Out of
these, only following 7 projects have
implemented / are implementing grid
connected palm oil biomass based
electricity generation projects and all
these projects are either registered as
CDM projects or under CDM validation:
i.
ii.
iii.
iv.
v.
vi.
Lahad Datu Edible Oil biomass

steam and power plant -CDM
Regn. No. 395
Sandakan Edible Oil biomass
steam and power plant - CDM
Regn. No. 402
Sahabat Empty Fruit Bunch
Biomass -CDM Regn. No 288);
Kina Biopower plant - CDM Regn.
No. 0385
Seguntor Bio energy plant CDM
Regn. No. 0386.
Kunak Bio Energy Project (in
process for registration as a CDM
Speech by The Minister for Energy Water and Communication Y.B. Dato' Sri Dr. Lim Keng Yaik at the National
Renewable Energy Forum 21/09/2006. Downloaded from www.ktak.gov.my

CDM Executive Board
page 24
Barrier
P1:

P4 :
activity.
project activity)
It may be noted that just 4.59 % of the

industries have implemented / are
implementing grid connected biomass
based power projects and all these
projects are implemented as CDM
projects.
Therefore, it is clear the biomass based
grid connected electricity generation plant
is not common business practice in
Malaysia.
The experience to generate grid connected
biomass power is very limited in Malaysia
as explained in earlier sections. The
negative perception of the major players
is one of the major barriers according to
Minister for Energy, Lim Keng Yaik 5 :
What can we do to tap the high potential
of renewable energy in our country?
While there are barriers that need to be
ironed out, I strongly believe that the
biggest barrier is our mindset and
perceptions. In this instance, all of us are
victims to the old way of thinking.

CDM Executive Board
page 25
Barrier
P1:
Market

P4 :
activity.
There are significant market barriers in Grid power is readily available

utilising EFB as fuel for biomass power
plant. In a major study for the EFB supply
chain 6 one of the conclusions is as
follows:
The demand of EFB fuel is subjected to
various barriers such as accessibility of
fuel due to high transportation costs,
uncertainty of EFB fuel prices
difficulty in handling as well as
fluctuation of supply due to cropping
seasons (peak/off peak)
It may be observed in Table B.5 that there are very significant barriers for the proposed project activity
to be undertaken not as a CDM project activity (P1) as compared to generation of power in the grid (P4).
It is well known that the generation of power in the grid has low technology, investment and market risks.
For the biomass type (EFB,) identified in Sub-step 1a and Sub-step 1b, only one alternative was
identified for each biomass type as discussed in Sub-step 1b. Thus, no barrier analysis was conducted in
relation to this alternative.
Outcome of Step 2b
From Sub-step 2a and Sub-step 2b, it is observed that Alternative 2 (P1 and B1) identified in Step 1
experiences significant barriers.
Following Sub-step 2b, alternatives scenario to the project activity that is not prevented by any barrier is
(Alternative 1):
P4 :
The generation of power in the grid and B1:
to decay under mainly aerobic conditions.
The biomass residues are dumped or left
Alternative 1 is not prevented by any barrier and Alternative 2 faces significant barriers.
As per Additionality tool, if there is only one alternative scenario that s not prevented by any barrier
and this alternative is not the proposed project activity undertaken without being registered as CDM
project activity, then this alternative scenario is identified as the baseline scenario.
Thus, Alternative 1- P4 and B1 is the baseline scenario for the project activity.
Eco-Ideal Consulting & Mensilin Holdings, 2005: Barrier Analysis for the Supply Chain of Palm Oil Processing
Biomass (Empty Fruit Bunch) as Renewable Fuel. Page 43 Downloaded from www.eib.ptm.org.my

CDM Executive Board
page 26
Thus, explanations using qualitative and quantitative arguments on how the registration of the CDM
project activity will alleviate the barriers that prevent the proposed project activity from occurring in the
absence of the CDM are set out below as per Combined Additionality Tool.
Qualitative arguments
As set out briefly in Step 2, the project activity experiences investment and technological barriers and
risks. The project activity would also face considerable financial barriers as explained in subsequent
section. The registration of the project activity as a CDM project activity allows the project proponent to
accept the inherent risks of the project activity arising from investment and technology risks. The income
from sale of CERs may also assist in overcoming the barriers posed by employment of new technology to
ensure the project activity is reasonably viable from commercial perspective.
In addition, it can be justified that CDM will help to overcome the major barriers based on the financial
contribution to the project activity. Such additional revenue also enables the project proponent to accept
risks associated with the inherent technological and investment risks of the project activity.
Quantitative arguments
From the quantitative viewpoint, the financial indicator set out below has been identified as most suitable
for the project type and decision making context:
Project internal rate of return (Project IRR)
In demonstrating how registration of the project activity as a CDM project activity will alleviate the
barriers that prevent the proposed project activity from occurring in the absence of the CDM, the Project
IRR of the project activity is calculated for further discussion.
The basic information for calculation of Project IRR is given below in Table B.7
Table B.7: Project IRR of the project activity without and with CDM registration
Parameters
Value
Data Source
Installed capacity (MW)
25
Project proponent
Project cost (RM Million)
100
Project proponent
Rate of interest for debt component %
8.5%
Project proponent
Annual power supplied to grid (MWh /

year)
159,018
During normal year of operation based on 85

% capacity utilisation after deducting
electricity supplied to the mill and auxiliary
consumption
Electricity tariff (RM/kWh)
0.215
As per existing policy for purchase of

renewable energy policy
Budgeted CER price (Euro/tCO2e) till

end 2012
12
As per signed Term Sheet
Budgeted CER price (Euro/tCO2e) post

Kyoto commitment period (2013
onwards)
Budgeted

CDM Executive Board
page 27
IRR Calculation period (years)
21
PPA is for 21 years. Technical life time of the

project.
Project IRR without CDM incentives
3.66 %
IRR Calculations
Project IRR with CDM incentives
11.07%
IRR Calculations
The Project IRR was calculated as per latest Guidance on the Assessment of Investment Analysis version 02.1 of CDM EB 41. The internal rate of return of the project activity was calculated for 21
years ( 1 year construction period + 20 years operation period) which is also the term of Power Purchase
Agreement . The Project IRR is calculated to be 3.66 % for 21 years. The IRR for the project activity is 1.36 % for 10 years. The spreadsheet of IRR calculations are attached as Appendix- 1.
It may be seen that the returns from the project activity from the sale of electricity alone are very low.
This IRR is lower than the borrowing rate for the project which is 8.5 %. The latest Guidance on the
Assessment of Investment analysis suggests that commercial borrowing rate to be one of the benchmarks
for Project IRRs 7 . This is a very conservative benchmark as the calculations also includes equity
component where the rate of returns expected are generally higher than the lending rates. The project
activity would not be able to even service the debt component of the project with sale of electricity to the
grid. This has been one of the main reasons for many projects not coming up in Malaysia inspite of
availability of huge quantity of biomass in the country. In spite of Government initiative to promote
renewable energy, there has been a reluctance on the part of the electric utility to offer better prices to
facilitate establishment of such projects on a commercial scale as the purchase price offered by the
electric utility does not make the projects commercially viable.
The project activity is clearly not attractive economically and has a clear investment barrier.
1.1 Sensitivity analysis:
A sensitivity analysis with variations as suggested by Guidance on the Investment Analysis was carried
out as below:
1. Variations in Investment cost
2. Variations revenue from the project
As per guidance, sensitivity analysis for investment costs has to be carried out for the components that
constitute more than 20 % of the investment costs. In this case, the cost of boiler and turbine would
constitute for more than 20 % of the investment cost. These two items contribute for about 50 % of the
project cost. Therefore, the variation is considered for 50 % of the project cost with 10 % variation.
The project IRR with +10 and -10 % variations for variables listed above are presented in the Table B-8.
Table B-8 Project IRR without CDM revenues for various variations
S. No.
Parameters
Variation
IRR for 20 Comments

years without
CDM revenues
Guidance 11 of Version 02.1- Guidance on Investment Analysis, EB 41 Annex 45

CDM Executive Board
page 28
1.
Variation
in
Investment costs
+10%
2.77 %
-10%
4.63 %
Variation in
revenues for the
project cost
+ 10%
10.33%
-10%
Negative
The IRR of the project activity is very

less than the benchmark.
Lower than the benchmark
10 % increase in revenue is very
unlikely as this would mean that the
plant has to be operated with a
utilisation factor of 85% during first
year and 95 % during subsequent
years. This is very unlikely as with all
forced
maintenance
shutdowns,
festival holidays and unexpected
down time, 95% capacity utilisation
factor is not possible and not realistic.
Especially high pressure boilers
operating with EFB which is a very
difficult fuel, even 85 % plant
utilisation factor is quite high.
Considering 8000 hours of operation
(91.3 % Utilisation factor) which is
difficult
but
still
possible
theoretically, IRR becomes 7.25 %,
still lower than the benchmark.
-
The results of the sensitivity analysis conducted confirm that the financial internal rate of return of the
project activity without CDM revenues is much lower than the benchmark of commercial borrowing rate.
It must be mentioned here that the commercial borrowing rate is a very conservative benchmark as the
project IRR calculations also has equity component and it is very unlikely that investors would invest in
the project with expectations to get returns as only that of commercial borrowing rates. In these
circumstances, an IRR of 12 % 8 is considered to be more appropriate indicator for Malaysia. It is hereby
requested that the IRR of the project activity to be compared with 12 % IRR as benchmark.
As explained above, the CDM would improve the IRR to the level above the commercial lending rate
making the project viable. Thus CDM would alleviate the barriers that exist for the proposed project
activity and that would prevent the proposed project activity from occurring. As per Combined
Additionality tool, next step is to proceed to Step 4 Common practice analysis.
Step 4:
Common practice analysis
4.1 Fuel usage

Energy consumption in the industry accounts for close to 40% of total energy consumption in Malaysia.
A broad variety of fuels is used currently, by far dominated by fossil fuels, and biomass is used only to a
very small extent less than 0.5%, and not accounted for in official energy statistics.
8
Para 1, Page 21 of 28 of the report The IPP Investment Experience in Malaysia by Jeff Rector

CDM Executive Board
page 29
Figure B.2: Distribution of fuels used in the total industrial sector in Malaysia, 2003.
(Source: National Energy Balance, PTM)
Figure B.2 depicts that the energy use in the industry in Malaysia is dominated by the use of fossil fuels.
Very few companies have been using biomass residue as fuel. Most of the biomass fuel used is PKS i.e.
cement industry whereas the use of EFB has been very limited (and mainly confined to CDM projects).
The statistics clearly set out that the use of biomass in industrial application is very limited in Malaysia
i.e. outside palm oil mills.
4.2. Similar project activities
There are about 112 palm oil mills and 9 palm oil refineries in Sabah state. Out of these, only following 7
projects have implemented / are implementing grid connected palm oil biomass based electricity
generation projects and all these projects are either registered as CDM projects or under CDM validation:
vii.
viii.
ix.
x.
xi.
xii.
Lahad Datu Edible Oil biomass steam and power plant -CDM Regn. No. 395
Sandakan Edible Oil biomass steam and power plant - CDM Regn. No. 402
Sahabat Empty Fruit Bunch Biomass -CDM Regn. No 288);
Kina Biopower plant - CDM Regn. No. 0385
Seguntor Bio energy plant CDM Regn. No. 0386.
Kunak Bio Energy Project (in process for registration as a CDM project activity)
It may be noted that just 4.59 % of the industries have implemented / are implementing grid connected
biomass based power projects and all these projects are implemented as CDM projects.
Therefore, it is clear the biomass based grid connected electricity generation plant is not common
business practice in Malaysia.
4.3 High pressure boiler

CDM Executive Board
page 30
The project activity would employ boilers operating at 69 bar pressure which are very rarely used in
Malaysia. To the best of our knowledge, such high pressure boilers are being employed for the first time
for the combustion of palm oil industry biomass especially EFB.
Therefore, the project activity is clearly not a Business as Usual scenario.
With the above discussion, it may be concluded that the project activity is clearly additional.
B.5.
Description of how the anthropogenic emissions of GHG by sources are reduced below
those that would have occurred in the absence of the registered CDM project activity (assessment
and demonstration of additionality):
The basic demonstration of additionality is handled in the previous section by means of the Combined
Additionality Tool in section B4. This section is complementary to Section B4 and therefore, the
discussions are not repeated here as suggested by recent Guidelines for completing the PDD.
B.6.
Emission reductions:
B.6.1. Explanation of methodological choices:
The first methodological choice is to decide on the appropriate baseline methodology. In this PDD,
ACM0006 (version 06.2) was applied as the appropriate baseline methodology based on justification
discussed in Section B.2.
The second choice is the baseline scenario described in detail in Section B.4 above. The conclusion is that
this project should be evaluated under Scenario 2 of Table 2 of ACM 0006, (version 06.2).
This scenario is relevant since the project activity is a greenfield power plant where the baseline scenario
established in Section B.4 is Scenario 2 of Table 2 of ACM0006, (version 06.2) i.e.:
Power would be generated in the power plants in the grid and

Biomass would be left to decay mainly in aerobic conditions
According to the applied methodology, the project boundary encompasses:
The power plant at the project site;
The means for transportation of biomass residues to the project site (e.g. vehicles);
All power plants connected physically to the electricity system that the CDM project power plant
is connected to. The spatial extent of the project electricity system, including issues related to the
calculation of the build margin (BM) and operating margin (OM), is further defined in the
Consolidated baseline methodology for grid-connected electricity generation from renewable
sources(ACM0002) 9 .
The site where the biomass residues would have been left for decay.
B.6.1.1 Emission reductions of the project activity

The reference to the ACM0002 is according to the EB 359 ACM0002 has been replaced with the Tool to
calculate emission factors for electricity system (Version 1)

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The emission reductions in the year, y, will be calculated using the formula (1) in the ACM0006 (version
06.2):
ERy
= ERheat, y + ERelectricity, y + BEbiomass, y PEy Ly
(1)
Where:
= Emissions reductions of the project activity during the year y in ton CO2/ year
ERy
ER electricity, y = Emission reductions due to displacement of electricity during the year y in ton CO2/year
ER heat,y
= Emission reductions due to displacement of heat during the year y in ton CO2/ year
BE biomass,y
PEy
Ly
Baseline emissions due to natural decay or burning of anthropogenic sources of biomass

during the year y in ton CO2 e /year
= Project emissions during the year y in ton CO2 / year, and
= Leakage emissions during the year y in ton CO2 / year
Emission reductions due to heat

Since heat is not extracted from the plant, emission reductions due to heat are not applicable for the
project activity.
Hence, emission reductions is calculated as :
ERy = ER electricity, y + BEbiomass
PEy Ly
B.6.1.2 - Project emissions

As per ACM0006, version 06.2, project emissions include:
CO2 emissions from transportation of biomass to the project site (PETy)
CO2 emissions from on-site consumption of fossil fuels due to the project activity (PEFFy)
CO2 emissions from consumption of electricity (PE EC,y)
CH4 emissions from the combustion of biomass (PE Biomass, CH4,y).
CH4 emissions from wastewater
PEy = PETy + PE FF, CO2, y + PEEC,y + GWPCH 4 ( PEBiomass,CH 4, y + PEww,CH4,y) (2)
Where:
PETy
PEFF, CO2,y
PEEC,y
GWPCH4
CO2 emissions during the year y due to transport of the biomass to the project
plant in ton CO2 / year
CO2 emissions during the year y due to fossil fuels consumed in the project
activity in ton CO2 / year
CO2 emissions during the year y due to electricity consumption at the project site
that is attributable to the project activity (ton CO2/year)
Global Warming Potential for methane valid for the relevant commitment period
in ton CO2/ton CH4

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page 32
=
=
PEBiomass, CH4,y
PE ww, CH4,y
CH4 emissions from the combustion of biomass during the year y in tCH4/ year.
CH4 emissions from waste water generated from the treatment of biomass
residues in year y (ton CH4/yr)
B.6.1.2. i) CO2 emissions for transportation of biomass

The project activity would consume EFB from its own palm oil mill and from palm oil mills in the
surroundings. The fuel would be transported from a number of palm oil mills. An average distance of
about 100 kilometres for round trip is considered for ex-ante estimates. The average distance per round
trip would be monitored as per monitoring methodology and actual emissions would be calculated during
monitoring.
Methodology gives two options to estimate the emissions due to transportation of biomass. The first
option is adopted.
The formula to calculate the emissions from the transport is calculated by the following formula:
PET
BF T , k , y
TL
AVD
EF
km , CO 2 , y
(2a) of methodology
Where,
PETy
CO2 emissions during the year y due to transport of the biomass residues to the
project site (t CO2/year)
TLy
Average truck load of the trucks used (tons) during the year y
BFT,k,y
Quantity of biomass residue type k transported to the project site during the year
y (tons)
AVDy
Average round trip distance (from and to) between the biomass residue fuel
supply sites and the site of the project activity during the year y (km)
EFkm,CO2,y
Average CO2 emission factor for the trucks measured during the y (t CO2/km)
B.6.1.2. ii) CO2 emissions for on site consumption of fossil fuels

The project activity does not co fire any fossil fuel for generation of electricity. However, some diesel
would be consumed for effective operation of the power plant for the following purposes:
i)
During start up of the power plant from cold condition. Cold condition is when the boiler is
switched off for long time and becomes completely cold
ii) Sometimes boiler may be switched off for short time and may still be in warm condition when
restarted again. Quantity of diesel required would be lesser than that required to start from cold
condition.
iii) Diesel would be required for boiler and pressure vessel inspection every year.
The CO2 emissions due to consumption of diesel would be calculated as per Tool to calculate project
or leakage CO2 emissions from fossil fuel combustion Version 1 as specified in the methodology.
As per tool, CO2 emissions from combustion of fossil fuels are calculated based on the quantity of fossil
fuel combusted and the CO2 emission coefficient of the fuel as follows:
PEFF,j,y
FCi.j.y
COEFi,y

CDM Executive Board
page 33
Where:
PEFF,j,y
FCi,j,y
COEFi,y
i
are CO2 emissions from fossil fuel combustion in process j during the year y (tCO2 / yr);
is the quantity of fuel type i combusted in process j during the year y (mass or volume unit /
yr);
is the CO2 emission coefficient of fuel type i in year y (tCO2 / mass or volume unit);
are the fuel types combusted in process j during the year y.
Diesel is the fossil fuel consumed in the project activity for start up and during annual pressure vessel
inspection.
The CO2 emission co efficient of the diesel is calculated based on Option B in the tool as follows :
COEFi,y
NCVi,y
EFCO2,i,y
Where,
NCVi, y
is the net calorific value of the fuel type i used in the year y in GJ/ ton
EFCO2,i,y
is the CO2 emission factor of the fuel type i in year y in t CO2 / GJ.
As per the tool, the regional or national default value as per National Energy Balance could be used, if
available for these values.
As per latest National Energy Balance, 2005 issued by Ministry of Energy, Water and Communications,
Malaysia, the national default value is available for net calorific value of diesel oil which is 42.4960 GJ/
ton.
For CO2 emission factor of diesel, as per tool, latest IPCC default value at the upper limit of the
uncertainty at a 95% confidence interval as provided in Table 1.4 of Chapter 1 of Vol.2 (Energy) of the
2006 IPCC guidelines on National GHG Inventories would be adopted. The value for diesel is 0.0748
ton CO2/ GJ
Hence, COEF,i,y
Hence, PEFF,j,y
42.4960 GJ/ ton
3.1787 t CO2 / ton
=
=
FCi.j.y
0.0748 ton CO2/ GJ
COEFi,y
FCi.j.y (ton) x
3.1787 t CO2/ ton
B.6.1.2. iii) Electricity consumption at the project site

According to ACM0006 (version 06.2) CO2 emissions from on-site electricity consumption (PEEC,y)
should be calculated using the latest approved version of the Tool to calculate project emissions from
electricity consumption. In applying the tool, the project plant as well as any other biomass-fired power
plants at the project site should not be considered as captive power plants.
As there is no on site fossil fuel fired power plant this means that all the electricity consumption on site in
by the project activity should be calculated as project emissions based on import at electricity from the
grid. As per methodology, the on-site electricity consumption attributable to the project activity (ECPJ,y)
should include all electricity consumption that is consumed by the project activity (e.g. for mechanical
treatment of the biomass), except for auxiliary electricity consumption by the project plant (e.g. for
pumps, vans, etc.).

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Project emissions from consumption of electricity from the grid are calculated based on the power
consumed by the project activity for the mechanical treatment of the biomass (fuel preparatory
equipment) and the emission factor of the grid, adjusted for transmission losses, using the following
formula:
PEEC,y = ECPJ,y x EFgrid,y x (1 + TDLy )
Where:
PEEC,y =
ECPJ,y =
EFgrid,y =
TDLy =
Project emissions from electricity consumption by the project activity during the year y
(ton CO2 /year);
Quantity of electricity consumed by the project activity for fuel preparation during the
year y (MWh / year);
CO2 Emission factor for the grid in year y (ton CO2/MWh)
Average technical transmission and distribution losses in the grid in year y for the voltage
level at which electricity is obtained from the grid at the project site
B.6.1.2. iv) Methane emissions from burning of biomass

The combustion of biomass would lead to methane emissions. The formula for calculating the emissions
is:
PEBiomass,CH 4, y = EFCH 4,BF x BFk,y x NCVk (2c)
Where:
BFk,,y =
NCVk =
EFCH4,BF=
Quantity of biomass type k used as fuel in the project plant during the year y in a volume
or mass unit,
Net calorific value of the biomass type k in TJ/ ton of dry matter of biomass,
CH4 emission factor for the combustion of biomass in the project plant tons CH4 per TJ.
According to Table 4 :Default CH4 emission factors for combustion of biomass residues of ACM 0006
version 06.2, the default methane emission factor for other solid biomass residues is 30 kg/TJ with an
uncertainty level of 300 %. The conservativeness factor for uncertainly level above 150 % is 1.37.
Therefore, CH4 emission factor for solid biomass residues = 30 kg / TJ * 1.37
= 41.1 kg / TJ.
B.6.1.2. v) Methane emissions from waste water treatment (PEWW,CH4,y)
Small quantity of wastewater would be produced from the fuel preparatory system in the project activity.
This wastewater would be treated in closed anaerobic reactors along with the POME from the mill.
Methane generated from the closed anaerobic digesters would be destroyed in boilers or in flares.
Therefore, there would be no methane emissions from the waste water. Hence, the methane emissions
from wastewater are not estimated.
Therefore, Project emissions are,
PEy =
PETy + PEFF,CO2 y +
PEEC,y
GWPCH 4 * PE biomass, CH 4, y
B.6.1.3 Emission Reductions from electricity production

The emission reductions due to the displacement of electricity are calculated from the following formula:
ER electricity, y = EGy x EF electricity, y
(4)

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Where:
ER electricity, y = Emission reductions due to displacement of electricity during the year y in tons of CO2 /
year
EGy
= Net quantity of electricity generation in the project activity during the year y in MWh
EF electricity, y = CO2 emission factor for the electricity displaced due to the project activity during the
year y in tons CO2/MWh
B.6.1.3.1 Determination of EF electricity, y
As per the approved methodology for scenario 2, the emission factor for the displacement of electricity of
a project activity with more than 15 MW should correspond to the grid emission factor (EF electricity, y= EF
grid, y) and EF grid, y should be calculated as follows:
If the power generation capacity of the project plant is more than 15 MW, EFgrid, y should be calculated
as a Combined Margin (CM) following guidance in the section Baselines in the Consolidated baseline
methodology for grid connected electricity generation from renewable sources (ACM0002). This
guidance is to be replaced with Tool to calculate the emission factor for electricity system (version
01.1).
The emission factor of the grid as per tool is given in Annex 3 Baseline information.
B.6.1.3.2. Determination of EGy
As per version 06.2 of ACM0006, for scenario 2, EGy corresponds to the net quantity of electricity
generation in the project plant (EGy = EG project plant)
Where,
EGy
= Net quantity of electricity generation in the project plant (MWh)
B.6.1.3.3 Determination of methane emissions due to aerobic decay of biomass residues

As per approved methodology, in the case of biomass residues are dumped or left to decay under mainly
aerobic conditions or burnt in an uncontrolled manner without utilizing them for energy purposes,
baseline emissions are calculated assuming for both the scenarios viz , natural decay and uncontrolled
burning , that the biomass residues would be burnt in an uncontrolled manner.
The baseline methane emissions due to aerobic decay of biomass residues is given by :
BEbiomass, y
Where,
BE biomass,y
GWPCH4
BFpj,k,y
NCVk
EFCH4,BF
= GWPCH4
BFpj,k,y
* NCVk
EF burning, CH4, k, y
is the baseline emissions due to natural decay of biomass

during the year y in ton CO2 e /
year
is the Global Warming Potential of methane in tCO2e/ tCH4
is the incremental quantity of biomass used in the project plant in tons of dry matter
is the Net calorific value of the biomass type k in GJ/ ton of dry matter of biomass,
is the CH4 emission factor for the combustion of biomass in ton CH4 per GJ.

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In the absence of accurate information, the methodology suggests a default value of 0.0027 t CH4/ ton of
biomass for the product of NCVk and EF burning, CH4, k, y
As per methodology, the uncertainty of methane emission factor for uncontrolled burning of biomass is
more than 100 % and therefore the value of 0.0027 t CH4/ ton of biomass has to be adjusted with a
conservativeness factor of 0.73.
Hence,
NCVk *
=
=
0.0027 * 0.73
0.001971 t CH4/ t biomass
Assessment of leakage:
As per methodology, where the baseline scenario is that the biomass residues are dumped or left to decay
or burnt in an uncontrolled manner without utilising for energy purposes, leakage has to be assessed to
demonstrate that the project activity does not increase the use of fossil fuel use.
Methodology suggests three options to assess leakage. Option 2 has been adopted due to availability of
direct data. As per option 2, it should be demonstrated that the quantity of available biomass is at least 25
% larger than the quantity of biomass residue that are utilized.
A radius of 50 km has been considered for assessment of leakage. Same distance of 50 kms has been
considered for transportation of biomass to the project site although actually distance could be lesser
during the operation of the project activity.
The names of the palm oil mills within a radius of 50 kms and their installed capacity is given in Table B9.
Table B-9 Details of palm oil mills within a radius of 50 kms and their installed capacity
S.No.
Name of the palm oil mill
Installed capacity ( t. FFB/ hr)
1.
Sabahmas Palm Oil Mill
60
2.
Sebrang Palm Oil Mill
60
3.
Rimmer Palm Oil Mill
60
4.
Tongmanis Palm Oil Mill
60
5.
Unico Desa Palm Oil Mil
60
6.
Tamaco Mill II
60
7.
Bell Sawit Palm Oil Mill
45
8.
Sandau Palm Oil Mill
60
9.
Haranky Palm Oil Mill
60
10.
Tabung Haji Palm Oil Mill
60
11.
Melewar Palm Oil Mil
60
12.
Waris Selesa Palm Oil Mill
45
13.
TSH (Sabahan) Palm Oil Mill
60

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14.
Tong Len Mill II
60
15.
S.D. Resources
120
Total
930 ton / hour
Assuming at least 6000 hours of operation of each mill, total FFB processed by the mills in the region
would be 5,580,000 tons of FFB/ year. There are no official statistics on the production and use of EFB,
so the total available amount of EFB has to be calculated. Quantity of EFB produced ranges from 21 23
%. An average value of 22 % is considered as EFB production. Further it is assumed that the annual
increase in FFB processed in Sabah will be 3.5% p.a. 10 . The escalation is not considered for leakage
estimates for conservatism.
The total quantity of FFB processed, EFB produced, demand for EFB and excess availability within 50
km radius is calculated and shown in Table B.10 below.
The demand for EFB is estimated through the number of potential CDM projects in the region. The CDM
projects considered are derived from the UNEP CDM-pipeline 11 . The CDM Pipeline contains a list of
all CDM projects that have either been uploaded for Global Stakeholder Process under validation or has
been submitted for registration at the UNFCCC.
In addition, save and except for consumption by CDM project activities, there is not any known use for
EFB in the region.
Table B.10: Calculation of leakage for biomass
Description
FFB processing capacity of palm oil mills in the region
Removing mill no. 11 as this is proposing CDM project with EFB (Mill
nos. 12 and 14 are proposing CDM projects mainly with mesocarp fibre)
FFB processed in balance mills
Number of operating hours of the mills
Total FFB processed
EFB processed at 22 %
EFB required for other projects within 50 km radius
Lahad Datu Edible Oils Sdn Bhd (Source : Registered PDD of the project
activity)
EFB available
EFB required for the project activity
Excess EFB
Value
930 tons / hour
60 tons/ hour
870 tons/ hour
6000 hours / year
5,220,000 tons / year
1,148,400 tons / year
122,500 tons / year
1,025,900 tons/ year
362,727 tons / year
663,173 tons / year
10
Anders Evald et al 2005: Renewable Energy Resources (in Malaysia) Recalculated based in table 2.2 p 10
11
CDM pipeline downloaded from www.cdmpipeline.org 12/01/2008

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Percentage of excess
182.83 %
Table B.10 conservatively affirms that there is approximately 182.83 % of unconsumed EFB in the
region after deducting all the volume consumed by the (CDM) project activities in the region. This
percentage exceeded the 25% unconsumed EFB benchmark required as the criteria to rule out leakage.
Furthermore, there is still excess EFB to accommodate other minor uses without changing the conclusion.
B.6.2. Data and parameters that are available at validation:
ID No.
Data / Parameter:
Data unit:
Description:
Source of data:
A
GWPCH4
t CO2 e /t CH4
Global Warming Potential (GWP) of methane, valid for the relevant commitment
period
Decisions under UNFCCC and the Kyoto Protocol (a value of 21 is to be applied
for the first commitment period of the Kyoto Protocol)
21
21 for the first commitment period. This value shall be updated according to any
future COP or MOP decision.
Value applied:
Justification of the
choice of data or
description of
measurement methods
and procedures actually
applied :
Any comment:
-
ID No.
Data / Parameter:
Data unit:
Description:
Source of data used:
Value applied:
choice of data or
description of
measurement methods
applied :
Any comment:
ID No.
Data / Parameter:
Data unit:
Description:
B
EFCH4,BF
Kg/TJ
IPCC 2006
41.1 kg methane/TJ (calculated as the original 30 kg methane/TJ *
conservativeness factor of 1.37)
The methane emission is relatively uncertain, and thus a high conservativeness
factor is used in calculating the annual emissions.
Although methane emissions due to decay of biomass is not considered in the

baseline, methane emissions due to combustion of biomass is considered for
conservatism
C
EFgrid,y
tCO2/ MWh
The emission factor of the Sabah grid

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Source of data used:

Study by the Malaysian Energy Centre (Pusat Tenaga Malaysia)
Value applied:
0.8 kg CO2/kWh
The data was collected from the best available source the local utility company
choice of data or
description of
measurement methods
applied :
Any comment:
The base years for the calculation are 2003-05, for which the latest statistics are
available.
B.6.3. Ex-ante calculation of emission reductions:

As discussed in section B.6.1.1, emission reductions is calculated as :
ERy = ER electricity, y + BE biomass PEy Ly
Where:
ERy
=
ER electricity, y =
ERbiomass
=
PEy
=
Ly
=
Emissions reductions of the project activity during the year y in tons of CO2,
Emission reductions due to displacement of electricity during the year y in t CO2
Emission reductions due to aerobic decay of biomass residues in t CO2
Project emissions during the year y in tons of CO2, and
Leakage emissions during the year y in tons of CO2.
Of these Ly are estimated to be zero.

Therefore, ER y = ER electricity, y + BE biomass PE y
As mentioned in section B.6.1.3, emission reductions due to the displacement of electricity are calculated
from the following formula:
ER electricity, y =
EG y
EF electricity, y
Where:
ER electricity, y = Emission reductions due to displacement of electricity in the year y in tons of CO2 / year
EGy
= Net quantity of electricity generation in the project plant during the year y in MWh
EF electricity, y = CO2 emission factor of the grid for the year y in tons CO2/MWh
B.6.3.1 Determination of EF electricity, y
As per the approved methodology, the emission factor for the displacement of electricity of a project
activity with more than 15 MW should correspond to the grid emission factor (EF electricity, y= EF grid, y) and
EFgrid, y should be calculated as a combined margin (CM) as per Tool to calculate the emission factor for
electricity system (version 01.1).
The basis for determination of EF electricity, y is given in Annex 3 Baseline information

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EF electricity, y estimated as per methodology and applicable tool
= 0.8 t CO2/ MWh
B.6.3.2. Determination of EGy

As per version 06.2 of ACM0006, EGy for scenario 2 is the net quantity of electricity generation.
EG y = EG project plant, y
The first phase of the project activity would be commissioned by January 2010 and second phase of the
project activity would be commissioned by July 2010.
In the first phase, one 75 ton / hour boiler would be commissioned along with 25 MW turbine. This
would produce about 12.5 MW of gross electricity.
The calculations of net electricity generated by the project activity are given in Annex 3- baseline
information and in attached spreadsheet as Appendix 1.
The net electricity exported to the grid by the project activity in the first phase during first six months of
the project activity is expected to be 34,427 MWh.
The net electricity exported to the grid by the project activity after commissioning the second phase
would be 159,018 MWh / year.
Emission reductions ( baseline emissions) due to displacement of electricity for an year from second year
would be ,
ER electricity, y
=
EG y x EF electricity, y
=
159,018 MWh/ year
x 0.8 t CO2 / MWh
127,214 t CO2/ year from second year
Emission reductions ( baseline emissions) due to displacement of electricity during operation of first year
would be calculated as follows,
Baseline emissions during first six months of the project activity
ER electricity,
EG x EF electricity, y
34,718 MWh
27,541.6 t CO2 during first six months of the first year
x 0.8 t CO2 / MWh
Baseline emissions during next six months of the first year

ER electricity,
=
EG y x EF electricity, y
=
69,435 MWh
x 0.8 t CO2 / MWh
55,548 CO2 during next six months of the first year
Baseline emissions during the first year due to displacement of electricity is,
ER, electricity, y
27,774 + 55,548
83,322 ton CO2/ year

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B.6.3.3 Baseline emissions due to aerobic decay of biomass residues in a year BEbiomass, k, y
BEbiomass, y
= GWPCH4
BEbiomass
21 tCH4 / tCO2
BFpj,k,y
* NCVk
* 126,954 ton / year
* 0.001971 tCH4 / ton
= 5,255 ton CO2/ year

Baseline methane emissions due to aerobic decay of biomass in the first year
(Please refer attached spreadsheet for calculations).
= 3,477 ton CO2/year
B.6.3.4 Project emissions

As per section B.6.1.2, project emissions,
PEy
= PETy +
PEFF
CO2, y
+ PEEC,y +
GWPCH 4 * PE biomass,
CH 4, y
Where:
PETy
CO2 emissions during the year y due to transport of the biomass residues to the project
activity (ton CO2/year)
PEFF CO2,
CO2 emissions due to consumption of fossil fuel during the year by the project activity in
ton CO2 / year
PEEC,y
CO2 emissions during the year y due to electricity consumption by the project activity
in ton CO2/year
GWPCH4
= Global Warming Potential for methane in ton CO2/ton CH4
PEBiomass,CH4,y= CH4 emissions from the combustion of biomass during the year y in ton CH4 / year.
B.6.3.4.1 CO2 emissions due to transport of biomass residues to the project activity
The formula to calculate the emissions from the transport of biomass to the project activity is
PETy =
BF
T ,k , y
TLy
AVDy EFkm,CO 2, y (2a)
Where,
PETy
TLy
BFT,k,y
=
=
AVDy
EFkm,CO2,y
CO2 emissions during the year y due to transport of the biomass residues to the
project site (t CO2/year)
Average truck load of the trucks used (tons) during the year y
Quantity of biomass residue type k transported to the project activity during the
year y (tons)
Average round trip distance (from and to) between the biomass residue fuel
supply sites and the project activity during the year y (km)
Average CO2 emission factor of the trucks (t CO2/km)
Quantity of EFB that would be utilised in the power plant =

362,727 tons / year
Quantity of EFB that would be available from the new palm oil

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in the same complex

Quantity of EFB that needs to be transported , BFT,k,y
Average truck load , TLy
Average round trip distance, AVDy
=
=
=
=
158,400 tons / year

204,327 tons/ year
25 tons / trip
100 kms
=
=
=
=
=
=
=
=
=
0.6 litre / km
0.845 kg / litre
0.507 kg of diesel/ km
42.4960 GJ/ tonne 12
0.0748 t CO2/ GJ 13
3.1787 t CO2 / tonne
3.1787 kg CO2 / kg of diesel.
3.1787 kgCO2/ kg l X 0.507 kg / km
1.612 kg CO2 / km
0.001612 t CO2 / km
Emission factor of diesel per kilometre, EFkm,CO2,y

Diesel consumption
= 60 litres/ 100 km
Density of diesel
Diesel consumption
Calorific value of diesel
CO2 emission factor of diesel
Emission factor of diesel
Emission factor of diesel
EFkm,CO2,y
PETy
204,327 tons/ year

------------------------25 tons / trip
1317 ton CO2 / year
100 kms
x 0.001612 t CO2 / km
B.6.3.4.2- CO2 emissions due to consumption of fossil fuels by the project activity
Small quantities of diesel would be required during start up of the boilers. The quantities of diesel
expected to be consumed per year by the project activity would be as follows :
- 200 litres / hour for 24 hours during start up from cold condition which is expected to
happen 4 times per year.
- 200 litres hour for 4 hours during start up from warm condition which is expected to
happen 6 times per year
- 100 litres/ hour for 14 days during pressure vessel inspection which is once a year.
On the above basis, diesel required by the project activity
Density of diesel
Quantity of diesel required
=
=
=
57, 600 litres/ year

0.845 kg/ litre.
48.672 tons/ year
As discussed in section B.6.1.2.ii, project emissions due to consumption of diesel in the project activity,
PE FF, CO2, y is estimated as follows :
PEFF, CO2,y
=
=
FCi.j.y
x COEFi,y
FCi.j.y (ton) x 3.1787 t CO2/ ton
12
Source : National default value for diesels as per National Energy Balance ,2005, Malaysia
13
Source : Upper value of Table 1.4 of chapter 1 of IPCC 2006 as per methodology

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Where
FCi,j,y is the quantity of diesel consumed in tons / year
COEF, j, y is the CO2 emission factor of diesel in t CO2/ ton
=
=
48.672 tons/ year

3.1787 t CO2/ ton
Hence, PEFF, CO2, y= 48.672 tons/ year
155 ton CO2/ year
3.1787 t CO2/ ton
B.6.3.4.3- CO2 emissions due to consumption of electricity

The project emissions from consumption of electricity from the grid are calculated based on the power
consumed by the project activity and the emission factor of the grid, adjusted for transmission losses,
using the following formula:
PEEC,y =
ECPJ,y x EFgrid,y x (1 + TDLy )
Where:
PEEC,y
ECPJ,y
EFgrid,y
TDLy
=
=
=
Project emissions from electricity consumption by the project activity during the year y
(ton CO2 /year);
Quantity of electricity consumed by the project activity during the year y (MWh / year);
Emission factor for the grid in year y (ton CO2/MWh)
Average technical transmission and distribution losses in the grid in year y for the voltage
level at which electricity is obtained from the grid at the project site
Estimation of EC PJ ,y
Although electricity for the fuel preparatory system would be from the biomass power plant, as per
methodology, electricity required for the fuel preparatory system would have to be considered as
imported from the grid.
The approximate installed capacity of the fuel preparatory system is 100 kW.
Number of operating hours
=
7,446 hours/ year.
Electricity required for operating the system
=
100 x 7446 x 1/1000
=
744.6 MWh/ year
Transmission and distribution losses (TDL)
The transmission and distribution losses are calculated from net electricity generation and net electricity
consumption in Sabah grid during the year 2005 which is the latest year for which the data is publicly
available.
Net electricity generation for the year 2006
Net electricity consumption for the year 2005
Transmission and distribution losses
TDL %
PE EC, y
744.6 MWh/ year
=
=
=
=
1294 GWh 14
1007 GWh 15
287 GWh
22.18 %
0.8 ton CO2 / MWh
* ( 1+0.2218)
14
Source : National Energy Balance, 2005, Malaysia, Ministry of Energy. Water and Communications, Malaysia
15
Source : National Energy Balance, 2005, Malaysia, Ministry of Energy. Water and Communications, Malaysia

CDM Executive Board
page 44
728
ton CO2 / year
B.6.3.4.4- Methane emissions due to combustion of biomass

PE Biomass,CH 4, y = EFCH 4,BF x BFk,y x NCVk
Where:
BFk,,y
Quantity of biomass type k used as fuel in the project plant during the year y in ( tons of
dry matter)
Net calorific value of the biomass type k in TJ / ton of dry matter of biomass,
CH4 emission factor for the combustion of biomass in the project plant tons CH4 per TJ.
NCVk
=
EFCH4,BF =
Quantity of dry matter

Net calorific value on dry basis
EF CH4,BF =
= BFk,y
= NCVk
41.1 kg CH4 / TJ
=
=
126,954 tons of dry matter / year

18 GJ/ ton 16
0.0000411 ton CH4 / GJ
Hence,
PEbiomass,CH 4, y=
126,954
18
x 0.0000411
94 ton CH4/ year
Total Project emissions,

PEy
1317 + 728 + 155 + ( 21 x 94)
4172 ton CO2 / year
The project emissions during the first year of operation would be 3020 ton CO2/ year. Details of
calculation are given in attached Appendix 1.
Emissions reductions due to the project activity during I year ,
ER,y,
=
=
Baseline emissions during I year Project emissions during I year

83,322 ton CO2 / year + 3,477 ton CO2 / year - 3020 ton CO2 / year
83,780 ton CO2 / year
Therefore, the emissions reductions due to the project activity in a year from second year,
16
Source : Renewable Energy Resources, by Anders Evald and others Integrated Resource Planning,
DANIDA, February, 2005

CDM Executive Board
page 45
ER,y,
=
=
=
Baseline emissions
Project emissions
127,214 ton CO2/ year + 5,255 ton CO2 / year
B.6.4. Summary of the ex-ante estimation of emission reductions:
Table B.11; Summary of the ex ante estimation of the emission reductions
B.7.
Year
Total Baseline
Emissions, EBL
(t CO2e)
Total Project
Emissions, EPA
(t CO2e)
Total Leakage
Emissions, ELE
(t CO2e)
Emissions
Reduction, ER (t
CO2e)
Year 1
86,799
3,020
83,780
Year 2
132,469
4,172
128,297
Year 3
132,469
4,172
128,297
Year 4
132,469
4,172
128,297
Year 5
132,469
4,172
128,297
Year 6
132,469
4,172
128,297
Year 7
132,469
4,172
128,297
Year 8
132,469
4,172
128,297
Year 9
132,469
4,172
128,297
Year 10
132,469
4,172
128,297
TOTAL
1,279,022
40,568
1,238,454
Application of the monitoring methodology and description of the monitoring plan:

B.7.1. Data and parameters monitored:
ID No.
Data / Parameter:
Data unit:
Description:
Source of data :
Measurement
procedures ( if any) :
01
BFk,y
Tonnes dry matter of EFB
Quantity of EFB combusted in the project activity during the monitoring period.
On site measurements
Quantity of EFB fed to the boiler would be weighed and recorded in the plant
records. The weight of EFB on dry basis would be calculated by multiplying
the quantity of EFB combusted during the monitoring period with the dry matter
content of EFB. The dry matter content of the biomass is 100 % minus Moisture
content % of the biomass.

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Monitoring frequency
QA/QC procedures to
be applied:
Continuously and an energy balance would be prepared annually

The measurements of the biomass type would be cross checked with an annual
energy balance by using values for energy content of the biomass and the
efficiency of the boiler.
Any comment:
Data would be archived for the crediting period and 2 years thereafter
ID No.
Data / Parameter:
Data unit:
Description:
Source of data :
Measurement
procedures ( if any)
02
Moisture content of EFB
%
Moisture content of EFB
On-site measurements.
Measurements are undertaken for representative samples of the biomass residues
used in the project activity. The analysis would be done as per accepted
international standards.
The moisture content of EFB would be analysed once in a month
Comparison with other measurements and with default values from literature.
Monitoring frequency:
QA/QC procedures to
be applied:
Any comment:
ID No.
Data / Parameter:
Data unit:
Description:
Source of data :
Measurement
procedures ( if any)
QA/QC procedures to
be applied:
Any comment:
ID No.
Data / Parameter:
Data unit:
Description:
Source of data:
Measurement
procedures if any:
QA/QC procedures:
03
EF CH4,BF
tCH4 /TJ
Methane emission factor for the combustion of biomass residues
Default values from Table 4 of ACM0006 version 06.2
Default values as per approved methodology
Since default value is adopted, frequency is not applicable.
Since the emission factor is uncertain, a high conservativeness factor is used in
calculating the project emissions.
Although methane emissions due to decay of biomass is not considered in the
baseline, methane emissions due to combustion of biomass is considered for
conservatism.
04
AVDY
Km.
Average round trip distance (from and to) between biomass fuel supply sites and
the project sites.
Records by project participants
The average distance can then be calculated as the weighted average of distance
to the mills. The sampling will be continuous.
Continuously
Check consistency of distance records provided by the truckers by comparing
recorded distances with other information from other sources (e.g. maps).

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Any comment:
ID No.
Data / Parameter:
Data unit:
Description:
Source of data:
05
TLy
Tons.
Average load of the trucks used for the transportation of biomass.
Data from the weighing of incoming trucks are used to calculate the average
weight of the truck loads arriving at the plant.
Determined by averaging the weights of each truck carrying biomass to the
project plant. Continuously, aggregated annually.
Continuously
Check consistency of the number of truck trips with the quantity of biomass
combusted, e.g. by the relation with previous years.
Measurement
procedures if any:
QA/QC procedures:
Any comment:
ID No.
Data / Parameter:
Data unit:
Description:
Source of data:
Measurement
procedures if any:
QA/QC procedures:
Any comment:
ID No.
Data / Parameter:
Data unit:
Description:
Source of data :
Measurement
procedures:
QA/QC procedures to
be applied:
Any comment:
06
EFkm,CO2,y
tCO2/km.
Average CO2 emission factor for the trucks during the year y.
Sample measurement of the fuel type, fuel consumption and distance travelled
for all truck types will be conducted. CO2 emissions from fuel consumption shall
be calculated based on methodology. For NCV and EFCO2, reliable national
default values or IPCC default value values can be used.
Once in a year
The results will be cross-checked with emission factors referred to in the
literature.
07
FF project plant,i ,y (As per ACM 0006 ver 06.2 )
or
FCi,,j,y (As per Tool to calculate project or leakage CO2 emissions from fossil
fuel combustion )
Both data have the same definition.
Litres of diesel/year.
Quantity of diesel used in the project activity
Plant records
The quantity of diesel used in the project activity would be monitored and
recorded.
Continuously
Would be cross checked with fuel purchase receipts and usage details

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ID No.
Data / Parameter:
Data unit:
Description:
Source of data:
Measurement
procedures if any:
QA/QC procedures:
Any comment:
08
EF,FF, CO2,
tCO2/GJ
CO2 emission factor for diesel used
Default National values would be used, If national values are not available,
latest default IPCC value would be used
Default value
Since default value is adopted, frequency is not applicable
ID No.
Data / Parameter:
Data unit:
Description:
Source of data:
Measurement
procedures:
QA/QC procedures to
be applied:
Any comment:
09
EG project plant, y
MWh/year.
Net electricity generated by the project activity in a year
On site measurements
The data would be measured from the energy meter and recorded.
ID No.
Data / Parameter:
Data unit:
Description:
Source of data:
Measurement
procedures :
10
NCVk,
GJ/ton of dry matter
Net caloric value of EFB.
Measurements.
Measurements shall be carried out at reputed laboratories and according to
relevant international standards.
The NCV of EFB would be measured once in six months, taking at least three
samples for each measurement.
The consistency of the measurements would be checked by comparing the
measurement results with relevant data sources (e.g. values in the literature) If
the measurement results differ significantly, additional measurements would be
conducted. It would be ensured that, the NCV would be determined on the basis
of dry biomass.
The data would be archived electronically for the crediting period and two years
thereafter
QA/QC procedures:
Any comment:
ID No.
Data / Parameter:
Data unit:
Continuously
Meter would be calibrated as per standard procedures.
The data would be archived electronically for the crediting period and two years
thereafter
11
Tons

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Description:
Source of data:
Measurement
procedures:
QA/QC procedures:
Any comment:
ID No.
Data / Parameter:
Data unit:
Description:
Source of data:
Quantity of EFB that are utilized (used for energy generation) in the defined
geographical region.
Survey or statistics.
Annual collection of data from small scale renewable energy projects and CDM
projects using EFB as fuel or feedstock in the districts of Lahad Datu, Kunak,
Tawau and Semporna.
If possible, data on amount of used EFB is collected directly. Where only power
production data are available estimates of the fuel use are calculated by default
values from PDDs or generic information.
Element in evaluation of the leakage based on approach L2.
12
Tons
Quantity of available EFB in the region.
Calculations are based on annual production statistics from MPOB on state level
recalculated to cover the geographic region.
Annual calculations of the quantity of EFB is based on the default relation
between FFB and EFB of 22 %.
Description of
measurement methods
applied :
QA/QC procedures:
Any comment:
Element in evaluation of the leakage based on approach L2.
ID No.
Data / Parameter:
Data unit:
Description:
Source of data:
Measurement
procedures :
QA/QC procedures to
be applied:
Any comment:
ID No.
Data / Parameter:
Data unit:
Description:
Source of data
13
ECpj,y
MWh.
On-site electricity consumption for the biomass fuel preparatory system.
Calculated
The value would be obtained by multiplying the installed capacity of the fuel
preparatory equipment in kW and the number of operating hours of the project
activity and dividing by 1000
Continuously
.
The data would be archived electronically for the entire crediting period and two
years thereafter
14
EF grid, y
tCO2/ MWh
CO2 emission factor for grid electricity during the year y
Adopted if publicly published by relevant national agencies, especially by Pusat
Tenaga Malaysia (Malaysia Energy Centre). If not available, the emission factor
would be calculated

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Measurement
procedures
QA/QC procedures to
be applied:
Any comment:
ID No.
Data / Parameter:
Data unit:
Description:
Source of data:
Measurement
procedures:
QA/QC procedures to
be applied:
Any comment:
As per tool to calculate emission factor for an electricity system.

Once at the start of the project activity
As per approved tool
-
15
TDLy
Average technical transmission and distribution losses in the grid in the year y,
for the voltage level at which electricity is obtained from the grid at the project
site.
Calculated if sufficient data are publicly available. If the data re not available,
the default value from the Tool to calculate baseline, project and/ or leakage
emissions from electricity consumption (version 1) would be used
Calculated from data or default value from tool
-
B.7.2. Description of the monitoring plan:

This monitoring plan would set out a number of monitoring tasks in order to ensure that all aspects of
projected greenhouse gas (GHG) emission reductions for the proposed project activity are controlled and
reported. This requires an on going monitoring of the project activity to ensure performance according to
its design and that claimed Certified Emission Reductions (CERs) are actually achieved.
Training and Operation of the project activity
The staff of project proponents would be trained by the suppliers in operation, maintenance, preventive
maintenance and trouble shooting of the project activity. The technical experts of the suppliers would
stay in the plant during commissioning of the project activity and train the staff of the project activity.
They would also provide the operation and maintenance manuals of the major equipment of the project
activity.
The plant would be operated 24 hours based on three shifts. The General Manager of the mill would be
Overall in charge of the project activity and implementation of the monitoring plan and summarizing the
results.
The operating data of the project activity like biomass combusted in the boiler, operating parameters of
the boiler, electricity produced, electricity supplied to the mill, electricity exported to the grid, diesel oil,
if any, consumed etc , would be recorded in the plant records by the Operators. There would be three
boiler operators one per each shift and six turbine operators two per shift. These Operators would
report to Chargemen. There would be one Boiler Chargeman and one Turbine Chargeman in each shift.

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The Chargeman would have a Chargeman Certificate and would be qualified to operate in high voltage
stations. The data recorded by the Operators would be regularly checked by the Chargemen.
A qualified electrical engineer (Steam grade engineer) would be in charge of the day to day running of
the project activity including operation and maintenance of boiler, turbine and other equipment in the
project activity. The electrical engineer would check the plant records regularly.
The weekly and monthly summary of the operating data of the project activity would be prepared by the
Electrical engineer and be reported to the Plant Manager and General Manager.
The electricity exported to the grid would be measured at the export meter. The electricity exported by
the project activity to SESB grid would be recorded by representatives of SESB and project proponents
each month. This reading would be the basis for invoicing by the project proponent and would be the
basis for calculation of emissions reductions of the project activity. These meter readings would be
maintained by the project proponent in power plant and in the head office. Monthly invoices are prepared
based on the joint certification of meter reading.
Internal Audits
The internal audit of the project activity would be conducted by the General Manager. He would review
all the records, safety installations, operating procedures, etc., any corrective action to be taken would be
recorded and steps would be taken to implement the corrective action.
Brief responsibilities of each person of the project activity
1. General Manager
He would be Overall In charge of the administration and operation of the mill and the project activity
and for reporting to the head office. He has more than 25 years experience in operation of palm oil
mills and biomass based power systems. He would be in charge of the Overall management of the
implementation of the monitoring plan and quality control of data and records.
He would periodically audit the records and if any discrepancy is found shall record them and take
corrective action as required.
2. Plant Manager
He is In charge of operation and maintenance of the project activity and would assist the General
Manager in implementation of the monitoring plan and summarizing the results. He would check the
results of all data monitored and would ensure the quality and accuracy of the data monitored.
3. Electrical engineer
He is In charge of the day today running of the project activity, its effective operation, maintenance
and monitoring. He would be directly responsible for maintenance of the plant records and operating
data. He would be in charge of ensuring the calibration of meters, analysis of biomass etc., and all
QA/QC activities associated with the project activity.
4. Protocol engineer
He would be in constant touch with SESB grid officials about day today running of the project
activity, offtake of electricity, etc.,
5. Boiler Chargemen

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The Boiler Chargemen would be qualified to operate in high voltage stations and would be in charge
of the maintenance of the boiler. They would ensure that the data are recorded in the plant records
regularly.
6. Turbine Chargemen
The Turbine Chargemen would be qualified to operate in high voltage stations and would be in
charge of the maintenance of the turbine. They would ensure that the data are recorded in the plant
records regularly
7. Operators
They would be In charge of operating the Project activity and recording the data in the plant records.
8. Accounts and Admin Executive
Cross checking the monitoring records with receipt and procurement records.
The general structure of the monitoring team of the project activity is given below in Fig B-3:

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Fig B-3 CDM Management structure of the Project activity
General Manager
Plant Manager
Protocol Engineer
Electrical Engineer (Steam

Grade Engineer) (3 one in each
shift)
Electrical Chargeman
Boiler Chargeman
(3 one in each shift)
Operators
(3 one in each shift)
Accounts and Admin Executive

(2 persons)
Turbine Operators
(6 two per shift)
B.8.
Date of completion of the application of the baseline study and monitoring methodology and
the name of the responsible person(s)/entity(ies)
Date of completion of the application of the baseline study and monitoring plan: 28/10/2008
Entity responsible for application of baseline study and monitoring plan :
YTL- SV Carbon Sdn. Bhd.
Level 4, Annex Block, Lot 10 Shopping Centre,
50, Jalan Sultan Ismail, 50250 Kuala Lumpur,
MALAYSIA
Tel : +6 03-2144 7200 Fax : +6 03-2144 7573
The entity determining the baseline and monitoring methodology is not a Project Participant.

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SECTION C. Duration of the project activity / crediting period

C.1.
Duration of the project activity:

C.1.1. Starting date of the project activity:
24/10/2008
The date of purchase order for the boiler of the project activity is considered as the starting date of the
project activity. This is the first purchase contract for the project activity.
In accordance with para 68 of EB 41 and Annex 46 of EB 41, a letter with reference: SDR/CDM/08/020
dated 15th October 2008 was sent to DNA, Malaysia and a letter with reference :SDR/CDM/08/021 dated
15th October 2008 was sent to UNFCCC informing the intention to implement the project activity as
CDM project activity and seek CDM status for the same.
C.1.2. Expected operational lifetime of the project activity:
25 y-0 m
C.2.
Choice of the crediting period and related information:

The project activity would apply fixed crediting period. The crediting period would start only
after the registration of the project activity as a CDM project activity.
C.2.1. Renewable crediting period
Not applicable
C.2.1.1. Starting date of the first crediting period:
Not applicable
C.2.1.2. Length of the first crediting period:
Not applicable
C.2.2. Fixed crediting period:
The project activity would apply fixed crediting period.
C.2.2.1. Starting date:
01/01/2010
The crediting period would not commence before the date of registration of the project
activity as CDM project activity.
C.2.2.2.
10y-0 m
Length:

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SECTION D. Environmental impacts

D.1.
Documentation on the analysis of the environmental impacts, including transboundary
impacts:
A combined study of the Environmental impacts due to the project activity and the proposed palm oil
mill has been carried out. The project proponent would obtain other necessary approvals before
commissioning and during operation of the project activity
A brief review of the environmental impacts due to the project activity is discussed below;
Impact on Air
The burning of biomass in the boiler would produce emissions. A bag filter would be provided to reduce
particulate emission level in the exhausts. A stack of height 50 metres would also be provided for venting
of emissions from the boiler to meet the air quality standards.
Impact on water
Little quantity of waste water is expected to generate from fuel preparatory system of the biomass. This
water would be treated along with the palm oil mill effluent (POME) in the treatment plant. POME
generated in the treatment plant would be treated in closed anaerobic digesters and methane would be
recovered and destroyed either in the flare or in a gas engine or in a boiler.
Impact due to odour
There are absolutely no odour issues due to the project activity.
Impact on land
Ash would be produced due to burning of biomass . The design of boiler includes a moving grate which
would ensure that the biomass would be completely burnt and therefore, the quantity of ash produced
would be reduced. The produced ash would be disposed as manure in plantations or as an additive for
brick manufacturing.
The project activity has many positive environmental impacts, few of which are highlighted below:
Electricity generation from a solid waste and a renewable energy source

Electricity generation with very less or negligible GHG emissions.
Promoting better image on palm oil production technology.
D.2.
If environmental impacts are considered significant by the project participants or the host
Party, please provide conclusions and all references to support documentation of an environmental
impact assessment undertaken in accordance with the procedures as required by the host Party:
The environmental impacts due to the project activity are not considered to be significant by the Host
Party and the project participants.

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SECTION E. Stakeholders comments

E.1.
Brief description how comments by local stakeholders have been invited and compiled:
A local stakeholder meeting was held for the project activity on 20 th October, 2008 at the project
proponents premises at Lahad Datu to compile the views and comments of the local stakeholders.
Invitation to the local stakeholders
Letters of invitations were sent to various institutions such as Malaysian Palm Oil Board, SESB, the
electric utility, Department of Environment, non governmental organisations, local community, other
palm oil mills in the area, etc.,
Advertisement was published in newspaper, Daily Express on Wednesday, 15 October, 2008 inviting
local public and others to attend a meeting on the project activity. The copy of Newspaper Advertisement
is attached as Annex 5.
Notice was displayed in the Notice Board of the premises inviting the staff of the project proponent to
attend the meeting and give their comments.
The list of attendees of the local stakeholders meeting is given in the Table E-1 below
Table E-1 List of attendees of the local stakeholders meeting
No.
Name
Organization
En. Norizah Bt. Mohd. Nor
Suruhanjaya Tenaga, Sandakan (Energy Commission, Malaysia
En Ruby Thaddesu
Sabah Electricity Supply Berhad, Lahad Datu
En. Ag Mohd Adzri Ag Ahmad
Jabatan Perhutanan (Forest Department), Lahad Datu
En. Viyono Selamat
Sabah Ports, Lahad Datu
En. Ali Hj. Ahmad
Jabatan Tenaga Kerja, Lahad Datu (Works Department)
En. Lam Kai Peng
Majlis Daerah, (Municipal council), Lahad Datu
En. Sino b. Lakiman
Balai Bomba &Penyelamat ( Fire Department)
En. Endy Raymond
Eramaz (M) Sdn. Bhd
En. Ir. Azmer Shamsuddin
Lahad Datu Edible Oil (CDM registered project activity)
10
En. Alsin Alunan
SPC Bio Diesel Sdn. Bhd
11
Mr. Wong Tack
SEPA, Lahad Datu (NGO)
12
Mr. Teng Boon Yau
Etara Kejuruteraan (M) Sdn. Bhd
13
En. Ali Kama
JKK/KK, Kg Epil, Lahad Datu (Epil Village Committee)

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14
Mr. Anjang
Penduduk, Kg Epil, Lahad Datu (Epil village resident)
15
En. Hj. Rusli Sakka
JKK/KK, Kg Indah Jaya, Lahad Datu (Indah Jaya Village

Committee)
16
En. Rosli
Penduduk, Indah Jaya, Lahad Datu (Indah Jaya resident)
17
En. Hj. Rahim Lakaim
JKK/KK, Kg Dasar Baru, Lahad Datu (Dasar Baru Village

Committee)
18
Mr. Chong Yun Nyen
Sepangar Shipyard
19
Mr. Dante Legada
Kwantas Oil Sdn. Bhd (Project Proponent group)
20
Mr. T. Rajendran
S. D. Resources Sdn. Bhd
21
Mr. Ilango S. Bharathi G.
YTL SV Carbon Sdn. Bhd (CDM Advisors)
22
Mr. Gopal
Kwantas Oil Sdn. Bhd
23
Mr. Manatan Ahamad
JKK/KK, Kg Sabah Baru, Lahad Datu (Sabah Baru Village

Committee)
24
Mr. Mathew Tamguez
Sinar Enterprise
25
Mr. Max
Milivest
26
Ms. Mohd. Kashid Wahid
27
Ms. Zainals T.Banus
28
Ms. Yonh Koh
29
Mr. Leong Yun Peng
S. D. Resources Sdn. Bhd (Project Proponent group)
30
Mr. Supardi Sanag
Palm Energy Sdn. Bhd
31
Mr. Yong voon Pei
Palm Energy Sdn. Bhd
Mr. T. Rajendran of the project proponent welcomed the gathering and gave a presentation about the
technical details of the project activity, objectives and their intention to develop the project activity as a
CDM project activity. He also explained the need for the meeting and requested the delegates to offer
their views / comments and opinions about the project activity. Subsequently Mr. Ilango Bharathi gave a
presentation about CDM, the initiatives of UNFCCC in mitigating climate change and requested the
delegates for their frank comments on the project activity.
E.2.
Summary of the comments received:
The comments and queries of the delegates and responses by the project proponents are given below in
the form of questions and answers:

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Question: Mr. Azmer Shamsuddin, Lahad Datu Edible Oil (LDEO) (Sr. General Manager) : What type of
cooling system method does this turbine be using?
Answer: Mr. T Rajendran, S.D. Resources : The turbine will be using a straight forward method of
Condenser which complies to the requirement of environmental authorities.
Q: Mr. Azmer Shamsuddin, LDEO : What type of incentive the government is offering in terms of tax
rebate? To what extent SD Resources would benefit from the governments incentives?
A: Mr. T Rajendran, S.D. Resources : The government is yet to officially announce any financial
incentive for this type of project. As of now, to the best of our understanding, the tax incentives do not
apply to income derived from the trading of CERs (Certified Emission Reductions) generated by the
project activity.
However, we hope that project activity would have official support from the Government of Malaysia as
the project activity would contribute to meet the Government of Malaysia s Ninth Plan target of 350
MW to be produced from renewable energy.
Q: Mr. Azmer Shamsuddin, LDEO : How confident you are that you would be able to achieve reduction
of nearly 1 million tons of CO2 for 10 years when the Kyoto Protocol expires by 2012?
A : Mr. Ilango Bharathi,: Although the uncertainty of Kyoto Protocol exists, it is normal practice to
estimate emission reductions for a period of 7 years or for a period of 10 years. The project activity has
adopted a crediting period of 10 years, it is expected that the project activity would reduce about 1
million tons of CO2 in 10 years. It is hoped that Kyoto Protocol would be extended beyond 2012.
However, the project would continue to produce electricity from renewable biomass and displace grid
electricity reducing greenhouse gas emissions even after 2012.
Q: Norizah Bt. Mohd. Nor, Suruhanjaya Tenaga, Sandakan (Energy Commission, Malaysia) : What
about the raw material availability for the project as another project is already operating in the area?
How much power would be exported to the grid?
A : Mr. T Rajendran, S.D. Resources
We are aware of the similar project and requirement of biomass. As per our study, there is ample
availability of EFB in the area and still a huge quantity of EFB is being dumped in the fields and allowed
to decay. Our study shows that there is more than 100 % excess EFB available within a radius of 50
kilometres of the project activity.
About 10 MW would be exported during the first stage and about 21 MW would be exported after
commissioning the 2nd stage of the project activity.
Q: Norizah Bt. Mohd. Nor, Suruhanjaya Tenaga, Sandakan (Energy Commission, Malaysia) : What is
the experience of the consultant in CDM projects and similar projects, especially in Malaysia?
A: Mr. Ilango Bharathi,: Currently, we are assisting in the development of about 42 projects in Malaysia
which includes biomass based electricity generation projects, composting projects, biogas projects, etc.,
Apart from above, we are also developing waste heat recovery based electricity generation projects,
landfill projects, energy efficiency projects, etc., in other countries. Two of our projects have been
registered and few projects have been submitted for registration and others are under various stages of
CDM process.
Q : Norizah Bt. Mohd. Nor, Suruhanjaya Tenaga, Sandakan (Energy Commission, Malaysia) : What
about the storage capacity of incoming raw material?
A : Mr. T Rajendran, S.D. Resources : We would have 1 to 2 days storage as there would be
continuous supply of EFB.

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Q: Mr. Lam Kai Peng - Majlis Daera, (Municipal council), Lahad Datu : What are you going to do with
the ash that would be generated in the project?
A: Mr. T Rajendran, S.D. Resources: Ash has several uses. It could be used as manure in plantations,
could be used in brick manufacturing, cement manufacturing, etc., It would be disposed as per
environmental regulations.
Q: Mr. Ruby Thaddesu Sabah Electricity Supply Berhad: Could you explain in more detail the
electricity export to state grid?
A: Mr. T Rajendran, S.D. Resources: The electricity would be generated at 11 kV and net electricity after
inhouse consumption would be exported to the grid at 11 kV since the nearest injection point is at 11 kV.
The interconnection line would be implemented in accordance to SESBs requirements and practices. The
project activity would have one Protocol Officer who would be in constant touch with SESB for day
today export of the electricity.
After commissioning the first phase of the project activity, about 10 MW would be exported to the state
grid and after completion of the second phase, 21 MW would be exported to the grid.
E.3.
Report on how due account was taken of any comments received:
Since there was no comment requiring immediate action from the project proponents, no action was taken
due to the comments.

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Annex 1
CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY
Project Participant - Host Country
Organization:
Street/P.O.Box:
Building:
City:
State/Region:
Postfix/ZIP:
Country:
Telephone:
FAX:
E-Mail:
URL:
Represented by:
Title:
Salutation:
Last Name:
Middle Name:
First Name:
Department:
Mobile:
Direct FAX:
Direct tel:
Personal E-Mail:
S.D Resources Sdn. Bhd

P.O. Box 61118
Lahad Datu
Sabah
91120
MALAYSIA
+6089 887 030
+6089 884 588
General Manager
Mr.
T.
Rajendran
+6019 833 211
+6089 884588
+6089 887036
rajendran@fordeco.com
Project Participant Annex I Party

Organization:
Street/P.O.Box:
Building:
City:
State/Region:
Postfix/ZIP:
Country:
Telephone:
FAX:
E-Mail:
URL:
Represented by:
Title:
Salutation:
Natsource Europe Limited.

Heron Square
Hill House
Richmond upon Thames
Surrey
TW9 1EP
United Kingdom
+44 (0)208 439 9515
+44 (0)208 439 9514
cdm_representative@natsource.com
www.natsource.com
Andrew Hallett
Manager
Mr.

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page 61
Last Name:
Middle Name:
First Name:
Department:
Mobile:
Direct FAX:
Direct tel:
Personal E-Mail:
Hallett
Andrew
+44 7747 481131
+44 (0)208 439 9514
+44 (0)208 439 9512
ahallett@natsource.com

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Annex 2
INFORMATION REGARDING PUBLIC FUNDING
There is no public funding of the project activity from Annex 1 Parties.

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Annex 3
BASELINE INFORMATION
The baseline emission factor of the grid for electricity displacement and net quantity of electricity
generation and transmission and distribution losses are calculated in this section.
A.3-1 Determination of emission factor for electricity displacement (EF electricity, y)
As per the approved methodology version 06.2 of ACM0006, if the power generation capacity of the
project activity is more than 15 MW, the grid emission factor (EF electricity, y= EF grid, y) should be calculated
as per Combined Margin method as described in the Tool to calculate the emission factor for electricity
system (version 01.1).
Step 1. Identification of the relevant electric power system
The electricity grid network of Malaysia is as follows:
1. Peninsular grid
2. East Coast Sabah grid
3. West Coast Sabah grid
4. Sarawak grid
The project activity is located in eastern coast of Sabah state and supplies electricity to the East Coast
grid of Sabah. The tow main grids of Sabah state- East coast grid and West Coast grid are not
interconnected 17 . Since, the grids are not interconnected, the electricity supplied by the project activity
would displace electricity only in the East Coast Sabah grid. Hence, East Coast grid of Sabah is
considered as the applicable grid for the project activity and the electricity emission factor of East Coast
Sabah grid is considered to estimate the emission reductions of the project activity.
The CDM Energy Secretariat of Pusat Tenaga Malaysia (Malaysian Energy Centre) publishes Study on
Grid Connected Electricity Baselines in Malaysia wherein the baseline electricity emission factor of
each grid is calculated and published. The latest study was published in January, 2008.
The published Study has calculated the emission factor of East Coast Sabah grid based on combined
margin method 18 .
17
Source : Study on Grid Connected Electricity baselines in Malaysia, 2005 prepared by CDM Energy Secretariat,
Pusat Tenaga Malaysia, (Malaysia Energy Centre).
18
The Baseline Study mentions that the emission factor has been calculated as per ACM0002. It must be noted that
the steps specified in ACM0002 to estimate the emission factor are same as in Tool to calculate the emission factor
for an electricity system Version1.1. The Baseline study had adopted the latest IPCC 2006 Guidelines for National
Greenhouse Gas Inventories to estimate the emission factor. Therefore, it may be considered that the emission
factor has been calculated as per the tool.

CDM Executive Board
page 64
The emission factor of East Coast Sabah grid is calculated as 0.8 t CO2 / MWh 19
Since data of generation of electricity, fuel consumption, etc., are not publicly available for estimation of
emission factor of the grid, this official study by CDM Energy Secretariat of Malaysian energy Centre
has been adopted.
A. 3-2 Determination of Transmission and Distribution losses of Sabah grid
The Transmission and Distribution Losses (TDL) of the connected grid have to be determined for
estimating the project emissions due to electricity consumed by the project activity for the fuel
preparatory system.
TDL is determined based on the net electricity generation and net electricity consumption data of Sabah
grid. The latest year for which these data are publicly available is 2006.
TDL is determined below:
Net electricity generation in Sabah grid for the year 2006
1,294 GWh 20
Net electricity consumption in Sabah grid for the year 2006
1,007 GWh 21
Transmission and distribution losses
287 GWh
Transmission and distribution losses % (TDL%)
22.18 %
A.3- 3 Determination of Net quantity of electricity generation by the project activity EGy
As per Scenario 2 of version 06.2 of ACM0006, the net quantity of electricity generated EGy corresponds
to the net quantity of electricity generated by the project plant (EG project plant).
Estimation of net electricity generation during first phase of the project activity ( for first six months)
Capacity of power plant in the first phase
12.5 MW
Capacity Utilisation factor
75 % in the first phase
Period of operation of the first phase
6 months.
Number of operating hours of the first phase
75% x 8760 hours/year x 0.5
3285 hours
Gross electricity generated
=
=
12.5 MW x 3285 hours

41,063 MWh during I phase (first six months)
Expected auxiliary consumption at 8 %
19
Source : Study on Grid Connected Electricity baselines in Malaysia, 2005 prepared by CDM Energy Secretariat,
Pusat Tenaga Malaysia, (Malaysia Energy Centre).
20
Source : National Energy Balance, 2006, Malaysia, Ministry of Energy, Water and Communications, Malaysia
21
Source : National Energy Balance, 2006, Malaysia, Ministry of Energy, Water and Communications, Malaysia

CDM Executive Board
page 65
Expected electricity supply to the mill
3,060 MWh during I phase (first six months) 22
Net electricity supplied to the grid, EGy
Estimation of net electricity generation during next six months of the first year
Capacity of power plant in the second phase
25 MW
75 % in the first phase
Period of operation of the first phase
6 months.
Number of operating hours of the first phase
75% x 8760 hours/year x 0.5
3285 hours
=
=
25 MW x 3285 hours
82,125 MWh
Expected auxiliary consumption
6,570 MWh
6,120 MWh
69,435 MWh
=
=
34718+ 69435 MWh

104,153 MWh during first year
Therefore, net electricity supplied to the grid

during first year
Estimation of net electricity generation per year after second (final) phase of the project activity
Capacity of power plant
25 MW
85 % from second year
25 MW x 8760 hours/ year x 85%
186,150 MWh / year
Expected auxiliary consumption
14,892 MWh/ year
12,240 MWh / year from second year
159,018 MWh / year
22
This figure is estimated based on the generally observed figure of 17 kW/ ton of FFB processed. This figure has
been assumed for estimation purposes. This may slightly vary during actual operations. However, net electricity
exported to the grid would be the basis for estimation of emission reductions.

CDM Executive Board
page 66
Annex 4
MONITORING INFORMATION
1.
Introduction
The monitoring plan of the proposed project is a guidance document that provides the set of procedures
for preparing key project indicators, tracking and monitoring the impacts of the proposed project activity.
The monitoring plan will be used throughout the defined crediting period for the project to determine and
provide documentation of GHG emission impacts from the project activity. This monitoring plan fulfils
the requirement set out by the Kyoto Protocol that emission reductions projects under the CDM have real,
measurable and long-term benefits and that the reductions in emissions are additional to any that would
occur in the absence of the certified project activity.
The monitoring plan will use the following definitions of monitoring and verification.
Monitoring: The systematic surveillance of the project activitys performance by measuring and
recording of performance-related indicators relevant in the context of GHG emission reductions.
Verification: The periodic ex-post auditing of monitoring results, the assessment of achieved emission
reductions and of the projects continued conformance with all relevant project criteria by a selected
DOE.
The monitoring plan provides the requirements and instructions for:
1. Establishing and maintaining the appropriate monitoring systems for electricity generated by the
project activity;
2. Quality control of the measurements;
3. Procedures for the periodic calculation of GHG emission reductions;
4. Assigning monitoring responsibilities to personnel;
5. Data storage and filing system;
6. Preparing for the requirements of an independent, third party auditor or verifier.
2.
Monitoring plan to estimate emission reductions of the project activity
The emission reductions of the project activity would be calculated as explained in section B.6
3. Monitoring
3.1 Electricity generated
The electricity generated by the project activity would be monitored through metering equipment .The
data would be logged into the computer. The meter reading would be readily accessible. The metering
equipment will be properly calibrated and checked annually for accuracy according to electrical meter
specification guide. Calibration tests records will be maintained for verification.
3.2 Biomass residues consumption
The quantity and type of biomass residues combusted in the project activity would be monitored during
the operation of the project activity, including all the necessary parameters of the biomass residues
according to Section B.7 of this PDD. All relevant records will be maintained for verification.

CDM Executive Board
page 67
3.3 Fossil fuel consumption by the boiler

Fossil fuel consumption would be recorded and monitored during the operation period of the project
activity continuously. All relevant records will be maintained for verification.
3.4 Transportation of biomass residues
The project activity would transport EFB from other palm oil mills. The quantity biomass, transportation
vehicle and transportation distance from origin of biomass residue, truck load etc., would be recorded by
company staff continuously. The receipts and records regarding with biomass purchase by the project
activity would be documented and summarized for verification.
4. Quality assurance and quality control
The quality assurance and quality control procedures for recording, maintaining and archiving data shall
be improved as part of this CDM project activity. This is an on-going process that will be ensured
through the CDM in terms of the need for verification of the emissions on an annual basis according to
this PDD.
5. Data management system
This provides information on record keeping of the data collected during monitoring. Record keeping is
the most important exercise in relation to the monitoring process. Without accurate and efficient record
keeping, project emission reductions cannot be verified.
Below follows an outline of how project related records would be managed:1. Overall responsibility for monitoring of GHG emissions reduction will rest with the CDM
responsible person of the project activity. Procedures for tracking information from the primary
source to the end-data calculations in paper document format would be continuously enhanced.
2. It is the responsibility of the project proponent to provide additional necessary data and information
for validation and verification requirements of respective DOE.
3. All paper-based information will be stored by the project proponent and kept at least one copy.
6. Verification and monitoring results
The verification of monitoring results of the project activity is a mandatory process required for all CDM
projects. The main objective of the verification is to independently verify that the project activity has
achieved the emission reductions as reported and projected in the PDD. It is expected that the verification
will be done annually.
Data archived will also be verified regularly by the DOE. The performance of the project activity will be
reviewed and analyzed by the consultant on a regular basis.

CDM Executive Board
page 68
Annex 5
Newspaper advertisement for the local stakeholders meeting
The copy of the newspaper advertisement on 15 th October 2008 in Daily Express, inviting for local
stakeholders meeting is given below:

CDM Executive Board
page 69
Annex 6
Photographs of local stakeholder meeting
Few photographs of the local stakeholder meeting are attached in this annex.

CDM Executive Board
page 70

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PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.

CLEAN DEVELOPMENT MECHANISM

General description of project activity

Application of a baseline and monitoring methodology

Duration of the project activity / crediting period

Annex 1: Contact information on participants in the project activity

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1

SECTION A. General description of project activity

Title of the project activity:

25 MW biomass based power plant in Lahad Datu in Sabah, Malaysia

Purpose of project activity

Components of the project activity

One 75 ton / hour boiler

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1

Gas based generation

Oil based generation

Hydro electric generation

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1

Name of Party involved (*)

Private and/or public

Kindly indicate if the Party

S.D. Resources Sdn.Bhd.

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1

Natsource Europe Ltd

Technical description of the project activity:

Figure A-1 : Map showing location of Sabah state in Malaysia map

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1

Figure A-2 : Map showing location of Lahad Datu in Sabah state

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1

Details of main manufacturing equipment

Boiler would be complete with following accessories:

(b) Type and levels of services

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1

Expected generation of electricity by the project activity

I phase ( first 6 months of

41,063 MWh during first 6 months

186,150 MWh/ year

6,345 MWh during first 6 months

27,132 MWh/ year

34, 7187 MWh during first 6 months

159,018 MWh/ year

(c) Greenhouse gases involved in the project activity

Annual estimation of emission

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1

Total estimated reductions (tonnes of CO2e)

Total number of crediting years

Annual average over the crediting period of

A.4.5. Public funding of the project activity:

The project activity applies the following approved baseline methodology:

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1

Table B-1 Justification of methodology

Project compliance with the criterion

No significant energy quantities, except from

There is only simple mechanical treatment of the

The project activity is installation of a new biomass

The biomass residues used as fuel in the project

The utilisation of the biomass residues does not

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1

Project compliance with the criterion

Project activity compliance

For the purpose of simplification this is conservative.

Not applicable as the project activity is a power plant

PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1