Pdd Focsani v3.0

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GRUE & HORNSTRUPCONSULTING ENGINEERS A/Sstergade 18 . DK 7500 Holstebro, Denmark . TEL. +45 96 10 13 30 . Fax +45 97 40 45 20 . www.grue-hornstrup.dk

In cooperation with

Houlkjarshojen 9, DK 8800 Viborg, Denmark TEL. +45 86 67 32 10, Fax +45 40 38 71 90, www.lfgconsult.dk

Project Design Document

Landfill Gas Recovery and Utilizationin Focsani, Romania

July 2005 Version 3.0


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Project Design Document Landfill Gas Recovery and Utilization in Focsani, Romania


GRUE & HORNSTRUP CONSULTING ENGINEERS A/S in cooperation with LFG Consult Aps050719_1_PDD Focsani v3.0 .doc

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Abstract

This Project Design Document presents the situational, technical, and financial aspects of

implementing a Joint Implementation project in Focsani, Romania based on the reduction of

GHG emissions from the City landfill. This Joint Implementation Project will be established

between the Danish and Romania governments which will enable the two sides to enter into

an Assigned Amount Units (AAUs) and Emission Reduction Units (ERUs) trading

agreement in the year 2005, which is in accordance with Joint Implementation (JI) under the

Kyoto Protocol. This Project Design Document includes the following:

A description of the existing situation in Romania and Focsani in regards tolandfill gas recovery and utilization

A description of the project and landfill gas utilization

A presentation of stakeholder process to date

A discussion of project additionality

A baseline study and methodology including the estimation of projectemissions

A description of the plan for monitoring emissions and reductions

A discussion of environmental impacts

Implementation of the project should start in the last half of 2005 with the full operation of

project equipment expected in 2006. This Project Design Document presents the project

activity which includes the flaring or utilization of landfill gas in existing boilers at City

owned CET facility. Thus the project activity claims emission reductions from the

distruction of CH4 in the landfill gas and the replacement of part of the natural gas withlandfill gas at the CET. Under the confines of a JI project the project activity a decent net

profit for the landfill management company. The crediting period for emission reductions is

expected to at a minimum include the years 2006 through 2012. The total emission

reductions is estimated in this PDD to be 113,000 tons of CO2eq. over the crediting period.


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Table of Contents

ABSTRACT ................................................................ ............................................................ .......................................... 3

TABLE OF CONTENTS ............................................................. ............................................................. ....................... 5

ABBREVIATIONS........................................................................ ............................................................ ....................... 7

1. INTRODUCTION.......................................................................................................... .......................................... 9

2. APPROVAL OF THE PARTIES AND PROJECT PARTICIPANTS ............................................................. 11

2.1 JIFOCAL POINTS,PROJECT APPROVAL,AND PDDCRITERIA ........................................................ ..................... 112.2 THE PROJECT PARTICIPANTS....................................................... ........................................................... ........... 12

3. DESCRIPTION OF THE EXISTING SITUATION IN ROMANIA................................................................ 13

3.1 MUNICIPAL SOLID WASTE MANAGEMENT AND DISPOSAL .................................................. ............................... 133.2 LANDFILL GAS RECOVERY AND UTILIZATION .......................................................... ......................................... 143.3 CURRENT ELECTRICAL AND THERMAL ENERGY SITUATION ......................................................... ..................... 143.4 INVESTMENT NEEDS FOR LANDFILL TECHNOLOGY AND LFGRECOVERY .................................................... ..... 15

4. DESCRIPTION OF THE EXISTING SITUATION IN FOCSANI............ ...................................................... 16

4.1 PROJECT LOCATION AND GEOGRAPHICAL CONTEXT .......................................................... ............................... 164.2 EXISTING SITUATION FOR THE LANDFILL AND CETFACILITIES................................................... ..................... 174.3 DATA FOR THE LANDFILL ........................................................... ........................................................... ........... 18

5. PROJECT DESCRIPTION.......................................................... ............................................................ ............ 21

5.1 RESULTS AND BENEFITS FROM THE PROJECT ........................................................... ......................................... 215.2 PURPOSE OF THE PROJECT AND DESCRIPTION OF THE PROJECT ACTIVITY .................................................... ..... 21

5.3 GENERAL DESCRIPTION OF THE TECHNOLOGIES TO BE IMPLEMENTED................................................... ........... 225.3.1 Extraction system............ ................................................................ ......................................................... ... 225.3.2 MPR - Module........................ ................................................................ ..................................................... 235.3.3 Transmission Pipe.................................................... .............................................................. ..................... 235.3.4 Utilization system..................................................... .............................................................. ..................... 23

5.4 TRAINING AND MAINTENANCE ................................................... ........................................................... ........... 245.5 SOCIAL ASPECTS .................................................... ........................................................... ............................... 245.6 TIME SCHEDULE ..................................................... ........................................................... ............................... 25

6. SUMMARY OF THE STAKEHOLDER PROCESS ........................................................... .............................. 26

6.1 THE CURRENT STAKEHOLDER PROCESS .......................................................... .................................................. 266.2 PROJECT STAKEHOLDERS ........................................................... ........................................................... ........... 27

7. ADDITIONALITY ASSESSMENT............................................................. ........................................................ 28INVESTMENT BARRIERS ...................................................... ........................................................... ............................... 30

8. BASELINE STUDY.................................... ................................................................ ........................................... 33

8.1 BASELINE APPROACH AND METHODOLOGY.................................................... .................................................. 338.2 MODEL SELECTION (STEP1) ........................................................... ........................................................... ..... 338.3 BEST AVAILABLE DATA (STEP2) ..................................................... ....................................................... ........ 358.4 BASELINE CONDITIONS (STEP3) .......................................................... ........................................................... 368.5 DEFINED BASELINE SCENARIO (STEP4) ..................................................... ..................................................... 378.6 BASELINE METHODOLOGY (STEP5) .............................................................. ................................................. 38

8.6.1 Assumptions for the estimation of baseline emissions ........................................................... ..................... 388.6.2 Calculation of baseline emissions............................................. ............................................................... ... 39

8.7 CALCULATION OF EMISSION REDUCTIONS (STEP6) .......................................................... .............................. 41

9. MONITORING METHODOLOGY AND PLAN..................................... .......................................................... 43


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9.1 MONITORING METHODOLOGY .................................................... ........................................................... ........... 439.2 MONITORING PLAN .......................................................... ........................................................... ..................... 43

9.2.1 Monitoring Boundaries (Step 1) ............................................................ ..................................................... 449.2.2 Required data and monitoring locations (Step 2).............................................................. ......................... 449.2.3 Official data registration and ERs calculation (Step 3).............................................................................. 469.2.4 QA/QC, Corrective actions and modification of the monitoring plan (Step 4)........................................... 479.2.5 Verification of ERs... ................................................................ ....................................................... ............ 49

10. ANALYSIS OF THE ENVIRONMENTAL IMPACT OF THE PROJECT ............................................... 51

LITERATURE SOURCES............................................................. .......................................................... ..................... 53

ANNEXES........................................................... ........................................................... ................................................. 55

ANNEX A.1:MEMORANDUM OF UNDERSTANDING ..................................................... .................................................. 57ANNEX A.2:LETTER OF INTENT FROM THE CITY HALL ....................................................... ......................................... 61ANNEX A.3:CONTACT INFORMATION FOR PROJECT PARTICIPANTS ........................................................ ..................... 63ANNEX B.1:PLANS OF THE FOCSANI LANDFILL AND PROJECT AREA ........................................................... ........... 65ANNEX C.1:MONITORING FORM .................................................. ........................................................... ..................... 67

ANNEX

C.2:M

ONITORINGR

ECORDS....................................................... ........................................................... ........... 69ANNEX D.1:DRILLING,LFGANALYSIS,AND WASTE AMOUNTS .................................................. ............................... 71

ANNEX E.1:ECONOMIC ANALYSIS TABLES ...................................................... ........................................................... . 73ANNEX F.1:BASELINE CALCULATIONS................................................... ........................................................... ........... 77ANNEX F.2:EMISSIONS REDUCTION CALCULATIONS........................................................... ......................................... 79


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Abbreviations

AAU Assigned Amount Unit is a tradable unit of one ton of the Assigned Amount of an Annex Bcountry of the Kyoto Protocol. For Joint Implementation purposes AAUs consists of

reductions that occur before the reduction period of 2008-2012.

Baseline A description of the most likely probable scenario in regards to future GHG emissions

without the implementation of a JI.

CDM Clean Development Mechanism

CET Romanian abbreviation of CHP facilities

CHP Combined Heat and Power

CH4 Methane

CO2 Carbon Dioxide

COP Conferences of the Parties under the Kyoto Protocol

DEPA Danish Environmental Protection Agency

DR Discount Rate for NPV

EIA Environmental Impact Assessment

ER Emissions Reduction

ERU Emission Reduction Units are the equivalent GHG emission reduction units for JI projects

under the Kyoto Protocol and valid for 2008-2012.

EURO European Common CurrencyGHG Greenhouse Gasses

JI Joint Implementation Project according to Article 6 - Kyoto Protocol

kWh Kilowatt hour (1 kWh = 3,600 kJ = 860 kcal)

LFG Landfill Gas

MOP Meetings of the Parties under the Kyoto Protocol

MPR Measuring, Pumping and Regulation-module for LFG extraction and utilization

NGO Non Governmental Organization

Nm3

Normal cubic meterNGO Non Governmental Organization

NPV Net Present Value of a series of allotments over time and applied with a Discount Rate (DR)

PIN Project Identification Note

PDD Project Design Document

RMEWM Romanian Ministry of Environment and Water Management

ROL Rumanian Lei

UNFCCC United Nations Framework Convention on Climate Change


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1. Introduction

This Project Design Document (PDD) shall enable the Romanian and Danish Governments ,

and the City of Focsani to enter into an Assigned Amount Units (AAUs) and EmissionReduction Units (ERUs) trading agreement in the year 2005, which is in accordance with

Joint Implementation (JI) under the Kyoto Protocol. This trading agreement is based on the

reduction of Carbon Dioxide (CO2) equivalent emissions generated by a landfill gas (LFG)

recovery and utilization project in the City of Focsani, Romania. In this project the

Emissions Reductions (ERs) will be generated by the capture and conversion of methane gas

(CH4), which is produced through biological degradation of landfill waste, through

combustion at biogas utilization facilities. The utilization facilities will include an installed

flaring system and LFG use at the existing CET plant for Combined Heat and Power (CHP)

in Focsani. The LFG extraction component and the accompanying utilization facilities will

compose the whole project in terms of this PDD.

This PDD has been developed in accordance with the Project Manual - Joint

Implementation - May 2003 which is published by the Danish Energy Authority. It is also

developed based on guidelines and examples found in the Kyoto Protocol, the Marrakech

Accords, the review of validated PDDs, and experience from the validation of previous

PDDs.

In accordance with these sources, the contents of this PDD include the following:

Approval of the parties and project participants

Description of the existing situation in Romania

Description of the existing situation in Focsani

Description of the project activity

Summary of the stakeholder process

Additionality assessment

Baseline study

Monitoring plan

Analysis of the environmental impact of the project

The Romanian Ministry of Environment and Water Management (RMEWM), who is the

Romanian UNFCCC JI Focal Point, has been contacted to clarify if specific criteria from the

host country should be respected when elaborating this PDD. The Romanian authorities

emphasize that the requirements in the Kyoto Protocol, Marrakech Accords and decisionsfrom other COPs shall be respected.

In general, this JI landfill gas recovery and utilization project is composed of the already

completed Project Idea Note (PIN), a detailed site investigation, this PDD and the possible

implementation of the physical project. The physical project will include the installation and

operation of a LFG extraction and control system, along with the utilization system for LFG.

The extraction and control system installation will take place at the existing city owned

landfill which started operation in the 1970s. The LFG utilization will take place by flaring

or transporting the gas up to 3.5 km in a pipeline to the city owned CET.

At the time of completion of this PDD a project specific Letter of Approval (LoA) and

Emission Reduction Purchase Agreement (ERPA) for the project was not signed by the

parties involved, and the consultation of stakeholders and the public in both countries was


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not completed. This should of course lead to a corrective action request by the Independent

Entity (DOE). Documentation of the additional consultation of stakeholders and the public

and a copy of the LoA will be handed over to the Independent Entity as soon as they become

available.

The additionality of this JI project is proven by the financial, regulatory, and technological

circumstances which exist in Focsani, as with other cities and municipalities in Romania. In

the case of the City of Focsani additionality is present since the City does not have the

financial means to fund a landfill gas recovery and utilization project for the existing landfill.

Furthermore, the lack of regulatory requirements for LFG extraction and the absence of such

systems in Romania leads to further arguments for additionality.

The baseline study presents the approach and methodology for determining the release of

GHGs from the Focsani landfill without implementation of the project. The methodology is

used to develop a baseline situation describing the most likely future release of GHGs from

the landfill. Then it is used to present a clear picture of the expected emission reductions in

tons of CO2 equivalents when the project is implemented. The methodology is developed

using historical data, the outcome of financial analysis, consideration of energy policies,

Romanian regulations, and environmental requirements.

The monitoring plan is developed based on the monitoring methodology and the normal

design of landfill gas recovery and utilization systems and practical experience from dozens

of existing LFG projects. The monitoring plan includes a developed methodology and

guidelines for monitoring the release of GHGs and the verification of associated ERs. These

include the definitions and procedures for project boundaries, data collection, utilization of

the data, and calculation of the ERs.

The regulatory requirements for environmental impact assessment (EIA) of the existing

landfill are presented along with other issues related to environmental impact and this JI

project. The issues include a discussion of previous and future EIAs for the existing landfill,

impacts on the surrounding environment, and the continuation of EIA during the operation of

the project activity. Finally, the significance of the environmental impact of the project

activity as a whole is discussed in connection to the surrounding environment.


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2. Approval of the Parties and Project Participants

As parties to the Kyoto Protocol and Nations under the Annex B countries, thegovernments of the Kingdom of Denmark and Romania have in accordance with Article 6

and 17 of the Kyoto Protocol entered into a mutual agreement for the establishment of Joint

Implementation (JI) projects within the boarders of Romania. This mutual agreement

consists of a Memorandum of Understanding (MOU) which was singed on the 28th of

January 2003 by the Danish Minister for Environment, Hans Christian Schmidt, and the

Romanian Ambassador to Denmark, Vlad-Andrei Moga. The MOU is established for a

period of 10 years with 5 year extension periods thereafter upon the approval of the two

parties. A copy of the MOU can be found in Annex A of this PDD.

According to the MOU, the amount of Emissions Reduction (ERs) produced under approved

JI projects will be transferred through emissions trading as outlined under Article 17 of the

Kyoto Protocol. The two parties have agreed that the ERs may consists of Emissions

Reduction Units (ERUs) incurring during the period of 2008-2012 and as Assigned Amount

Units (AAUs) which incur before 2008. All of the AAUs and ERUs will be acquired and

used for the period of 2008-2012.

The MOU indicates that all JI projects shall be formally approved by the two parties, and

that the price and scheme for emissions trading shall be negotiated on a per project bases.

Additionally, all JI projects shall comply with Romanian policies for such projects and the

existing and future guidelines developed by the Meetings of the Parties (MOP) and

Conferences of the Parties (COP) to the United Nations Framework Convention on Climate

Change (UNFCCC).

2.1 JI focal points, project approval, and PDD criteria

Under the MOU the parties have designated that the JI focal points for the Romanian

government, who is the host party, shall be the Ministry of Environment and Water

Management (RMEWM). The JI focal point for the Kingdom of Denmark, who is the

investor party, shall be the Danish Ministry of Environment. Which is represented by the

Danish Environmental Protection Agency (DEPA). Both the host and investor parties shall

be responsible for issues related to the establishment, approval, and regulation of JI projects

within Romania.

To date, this specific JI project as outlined in this PDD has only tertiary approval of the host

and investor countries. The City of Focsani has issued a Letter of Intent (Annex A2) to

DEPA, where DEPA is supporting development efforts for the project. The parties have

approved the PIN of the project and the development of this PDD by the project developer.

However, final approval of the project and any agreement relating to ERs shall be developed

after the examination of the PDD by all parties, the public, and an Independent Entity.

To date, there are no specific guidelines issued by UNFCCC for the structure and content of

a JI PDD. However, it is assumed that guidelines will follow the criteria as set out by the

Kyoto Protocol and gatherings (COP), and it is assumed that the guidelines will be similar to

those established for Clean Development Mechanisms (CDMs) under the Kyoto Protocol.

The DEPA criteria for this project and PDD are outlined in the Project Manual - Joint

Implementation - May 2003 which is published by the Danish Energy Authority. DEPA

also stipulates that any activities with regards to this JI project must cohere to various

regulations and laws associated with the use of Danish government funds for contracted


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projects in foreign countries. These regulations are published by the Ministry of

Environment and the Ministry of Energy.

The criteria from the RMEWM are that all the rules and regulations set out in the Kyoto

Protocol, the Marrakech Accords, and any additional UNFCCC gatherings (MOP & COP)

shall be respected. Additionally, the requirements and guidelines as set out in Romanian

legislation, executive regulations and climate policy shall also be respected.

Finally, all Romanian regulations related to landfills shall be respected in connection with

this project. Though there are only a few specific regulations related to landfill gas recovery

and utilization in Romania, this project will respect those related to general landfill

management and impact assessment.

2.2 The project participants

The City of Focsani

The City Hall is the responsible local authority for this JI project, where planning, regulation,and approval are handled by the City Council and the Mayors Office. The landfill is owned

by the municipality as are the local utility management company (CUP) and the local district

heat company Enet S.A. . The City Hall has both approval and financial authority over this

project activity.

Compania de Utilitati Publice R.A. (CUP):

CUP Is the utility management company for the City of Focsani, and is the official Project

Host/Proponent for this JI project. CUP is responsible for all issues in regards to the

operation and management of the landfill, and will own and operate the landfill gas

extraction equipment under this project activity.

Enet S.A.:

Enet is the CET management company for the City of Focsani. It is responsible for all issues

in regards to the operation and management of the combined heat and power facilities plus

the Citys hot water distribution system. Enet owns and operates the existing boiler plant

which will utilize the landfill gas under this project activity.

Grue & Hornstrup A/S

Grue & Hornstrup is the project developer who is contracted by DEPA to investigated the JI

project potential in Romania and to develop the PDD for this project activity. Grue &

Hornstrup has subcontracted the firm LFG Consult Apsas the landfill gas expert for this JI

project.

Danish Environmental Protection Agency (DEPA)

DEPA is providing support for the development of this JI project and will purchase the

emission reductions from the project activity.


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3. Description of the Existing Situation in Romania

This section of the PDD is written in order to present the existing situation in Romania withregards to the municipal solid waste and energy sectors, and environmental issues related to

them. The different sections describe current practices within these sectors and various

governmental initiatives which influence the sectors. This section sets up the principals for

which this JI project is developed upon and the local circumstance which may influence the

project. Most of the information presented in this section is discussed in greater detail in the

UN Environmental Performance Review on Romania (2001) and EBRDs review on the

Romanian Economy (2003). Though these documents are not current there is little to no

change in the information provided within it. Furthermore, the general items presented here

and there interaction with regards to this JI project will be discussed in greater detail in

chapters 4 through 10 of this PDD.

3.1 Municipal solid waste management and disposal

Current practice for the management and disposal of municipal solid waste in Romania focus

on the general collection and disposal of approximately 6-7 million tons of waste annually.

Advanced collection, sorting, and disposal facilities are not common in Romania, and only

exist due to projects which have been recently implemented. There are over 1200 landfills

operated by municipalities and cites who have the responsibility of handling municipal and

industrial solid waste and the environmental protection thereof. Almost all landfills are

operated by municipal or city owned companies who are often the primary waste collectors.

Of these the majority of landfills (60%) accept municipal and industrial solid waste, where

30% accept only municipal solid waste. Only a fraction of the landfills actually have permits

and environmental monitoring programs.

Waste sorting is mostly limited to scavenging by gypsies who scavenge for recyclables aswaste arrives at a landfill. This hand sorting removes a small portion of the disposed of

waste. The majority of existing landfills in Romania do not have barriers and leachate

collection systems and are not designed to allow for optimized LFG recovery. Many

landfills are just open areas where mixed waste is dumped and compacted, with little regards

to the surrounding environment.

Alternative methods for waste disposal are not currently in common practice in Romania.

Large scale waste recycling systems are relatively non-existent, incineration of waste is

limited to about 1% of waste, and composting as well as anaerobic digestion are only

entering into the management ideology right now. This being said, there is a strong desire

by many landfill operators to implement more advanced solid waste management and

handling systems. However, the acknowledged situation is that they are unable to fund suchsystems without outside development money.

In the past decade the Romanian government has established a number of laws and directives

related to landfills and there environmental impact, where Government Decision no.

349/2005 is the most encompassing law with regards to the land filling of waste. The

development of policies and regulations in respect to this is predominately the responsibility

of RMEWM, where the inspection and enforcement responsibility lies with the county

environmental protection agencies (EPAs). Most of these policies and regulations focus on

hazardous waste, the closure of existing landfills, and the establishment of new landfills. For

the time being existing municipal landfill operations are grandfathered into policies and

regulations as non-permitted landfills. Where the end date of depositing waste at most of

these landfills is by 2010. The major issue for closure is the financial support for


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establishing new landfills upon the closure of existing ones, and the associated costs of

closure.

Due to the desire of the Romanian government to enter into the EU, and the EU expected

accession for solid waste requirements deadline of 2017, the various levels of Romanian

governments have begun supporting the redevelopment of the solid waste industry. This

support to date is mostly limited to regulatory and technical assistance actions since local

financial funding is almost non-existent. Most available funding is obtained through

international assistance but is mainly limited to the development of new landfills.

3.2 Landfill gas recovery and utilization

Landfill gas recovery and utilization is an advanced solid waste and energy technology

which is not currently utilized by the waste management sector in Romania. The technology

is relatively unavailable to municipal and city waste management companies due to its lack

of implementation in Romania and its extensive investment costs. National requirements for

the capture and utilization of LFG at existing landfills are ambiguous, but not specificed in

GD 349/2005. There are no known municipal regulations which require landfill gas

recovery and utilization. The fact of nonexistent funding for such facilities is widelyacknowledged at all levels which leads to some of the ambiguity. The only clear influencing

regulations involve those associated with EU accession which ascertain that any new landfill

shall be established with systems for the venting and flaring of LFG. A time table for EU

accession requirements in regards to landfills is still under negations, but it is expected to be

2017.

It is foreseeable that LFG recovery and utilization technology will increasingly become

available to municipalities and cities in the next decades as existing landfills are closed and

new ones started. The majority of funding for implementing the technology will inevitably

come from international developments funds (such as the EUs ISPA and PHARE program).

Therefore, it is expected that the technology will only be implemented on a small scale for

new landfills in the short term, before 2013. Outside of JI agreements there will most likelybe no implementation at exiting landfills.

3.3 Current electrical and thermal energy situation

Due to the liberalization policies of the Romanian government over the past decade the

Romanian government is attempting to commercialize the energy sector. The actual level of

commercialization is limited since the ownership of most energy facilities has only changed

hands from the national government to local governments such as municipalities. The

national government does however retain partial control over the sector through partial

ownerships and the setting of energy policy and pricing at the national level by the

independent authority ANRE (National Electric and Heat Regis Authority). At present

Romania is a net importer of energy despite its vast reserves of fossil fuels. Most energy inRomania is produced by fossil fuel burning and hydro power installation, as the emergence

of nuclear power continues. The fossil flues used in energy production are natural gas, oil,

and various types of coal, where natural gas is the most widely used. There are very small

amounts of energy produced at renewable (including biomass) energy installations. The

electricity and thermal energy produced in the country is used by the private and industrial

sectors with various pricing arrangements for consumed resources (such as natural gas) and

delivered energy (such as electricity used by industry) as set by ANRE. Thermal energy is

mostly produced through the burning of natural gas and various types of coal, where

production mostly takes place in heat only boiler houses and CHP installations. The prices

paid for electrical and thermal energy are low when compared to Western Europe.

Currently most governmental policies and initiatives focus on the redevelopment of existing

energy facilities and the efficiency thereof. This includes projects that focus on everything


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from production plants to distribution networks. Typically such project funding involves

money from the Romanian government, the production or distribution companies, and

international assistance funds. Through the increase in efficiency, less reliance on coal and

lignite, and a hopeful increase in renewable energy, CO2emission are expected to remain at

or below the 1991 level until 2020. This expectation is significant since the natural gas

demand in Romania is expected to increase by 2020.

3.4 Investment needs for landfill technology and LFG recovery

In Romania there is an overall lack of financing for the development of landfill technology

and LFG recovery. Romanian government expenditures (national and local) on waste

management are low and only cover the operation of existing facilities and regulatory costs.

This is due to the low taxes and fees on waste disposal that are associated with Romanias

transition economy. Finally, local banking institutions are not interested in financing

improvements for local environmental investments due to low profitability from public

sector activities. This follows the general lack of investment in Romania which is associated

to one of the least favorable business investment climates in Eastern Europe according to

EBRD (2003). This is in part due to high inflation which leads to a Nation Bank Rate of 8%(July 2005).

The Romanian government does have initiative programs for the development and

promotion of renewable energy but the programs suffer from a lack of funding and are

progressing at a slow pace. Only a few demonstration project have been developed under

the programs and involve geothermal and biomass energy (wood or straw). This initiative

has only demonstrated these technologies, however the successful full-scale implementation

of geothermal and biomass energy is being established through the involvement of JI

projects.


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4. Description of the Existing Situation in Focsani

4.1 Project location and geographical context

The City of Focsani is located in Vrancea County in the region of Moldova and is

approximately 170 km from the Romanian capital of Bucharest (see Figure 1). The City of

Focsani has a population of approximately 105,000 people, with both commercial enterprises

and industrial manufacturing in and around the city.

Figure 1: Geographical map of Romania

The Focsani landfill is located outside of the city limits in a gorge surrounded by agriculturalland. The closest permanent inhabitable structures are located approximately 2 km away

from the landfill as is the closest industrial park. A large electrical step down station is

located 1 km from the landfill and the Cities CET plant and closest operational substation are

located approximately 3.5 km away from the landfill.

The geographical context of this JI project will be in the area which includes the City of

Focsani, the CET plant. An overall map showing the spatial boundaries of the project can be

found in Annex B.


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4.2 Existing situation for the landfill and CET facilities

The Foscani landfill was established in 1970 as the municipal landfill for the City of Foscani.

Since the 1990s the landfill has been operated by the City owned company Compania de

Utilitati Publice R.A. (CUP). The landfill is considered to be unprotected since it is not lined

and has no system for leachate or runoff collection. The landfill sits in a gorge with a small

adjacent stream. The soil characteristics of the area are favorable to water migration, with a

composition of mostly sand and some clay.

The landfill has accepted different waste types since its established, however specific

records of the types and amounts of waste disposed are only available for the period of

private landfill management. Records indicate that the landfill accepted only construction

and municipal waste up until 1999, at which point only municipal waste was accepted. Since

1997 the amount of delivered waste has been recorded by the counting of containers entering

the facility and by average weight of the waste in the containers. There are no facilities for

waste sorting and only minimal recovery of recyclables by gypsies. It is scheduled to stop

waste delivery at the landfill in 2006, however GD 349/2005 allows for waste

delivery/deposit until 2009.

The CET plant and distribution system are operated by the City owned company enet S.A..

The CET plant consists of two primary boiler and turbine units which are utilized for heat

and electricity production year round. Operation is switched between the two units during

times of maintenance. There are three operational secondary heat only boilers which are

utilized according to demand during the colder months of the year. In 2000 more than 98%

of all the energy supplied to the CET was from natural gas. The remaining 2% or less came

from heavy oil whose use is to be phased out. The energy production efficiency of the CET

facilities is not available, but is expected to be similar to like facilities in Romania. The enet

S.A. CET specifications are presented in Table 1.

# Un its # Burners

GasUtilization

(Nm3/hr)

SteamProduction

(tons/hr)

Primary Boilers 2 2 4400 50

Secondary Boilers 3 4 2200 20

# Units Size (MW)

Turbines (Connected to Primary Boilers) 2 4

Distance (Landfill to enet S.A. CET) 3.5 km

Table 1: Primary and secondary boiler characteristics of the CET plant

The power distribution system is operated by the commercial company Electrica S.A.. The

company owns and operates all the power distribution facilities throughout the city and the

region. The primary lines in the system carry 15 kV and the secondary lines carry 6 kV.

There is a general lack of funding for the City utilities and the three companies listed in this

section. Due to low prices for energy and waste disposal there are only funds for the

minimal maintenance and operation of their facilities. There are no funds for investment in

new equipment, so the existing equipment is quite old and in most cases less efficient when

compared to Western European practice.


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4.3 Data for the landfill

The landfill is still currently in operation but delivery of waste is planned to stop in 2006.

However, according to Romanian legislation (GD 349/2005) the landfill may still operate

until 2009. Unfortunately, the City has not been able to get financing for establishing the

new landfill. The municipality has asked the RMEWM for money that can be allocated for

the new landfill. If this financing is not possible then the existing landfill will need to be in

operation for a period beyond 2006, and at this point in time the funding of a new landfill in

the short term is seen as unlikely.

The total area of the landfill is approximately 5.5 ha., where at the moment deposited waste

covers an area of 4.7 ha with varying depths of waste. There are no surveys available from

when the landfill was established, therefore the exact depth can not be determined. For this

reason, as well as waste analysis, 3 holes were drilled to the bottom of the landfill during a

time when the landfill was inspected in connection to this PDD in November 2003. The

results from the drillings can be seen in Annex D, with average values in Table 3, where the

depths for the holes were 5, 11 and 15 meters. Additionally, the edge at the top of the landfill

was also surveyed in November 2003. When comparing the elevation at the west edge if the

landfill with the elevation at the foot of the landfill a depth of up to 19 meters can beestimated (see Annex B).

Since 1997 two types of trucks which deliver waste have been counted, as each delivers 370

kg/m3of waste, therefore the tones of waste per year are known. The total delivered waste

from 1997-2003 is approximately 350,000 tones. However, a week point in using this

deposited waste determination is if the trucks are only partly filled up. According to the

operator the total amount of waste in place for all years from 1970 to 2003 is expected to be

1,100,000 tones.

If the volume is calculated from the average depth of 13 meter and the area are 4.7 ha.,

corresponding to 47,000 m2, the total volume will only be 610,000 m

3. As informed by the

landfill operator compaction has been preformed by middle size dozers and the specific

gravity is expected to be approximately 800 kg/m3. This gives an approximate total of

490,000 tones of waste-in-place. This calculation results is less than half of the 1,100,000

tones the operator estimated, but since the depth is verified in different points the total

amount of waste in 2003 is expected to be 490,000 tones for this baseline study.

Furthermore, the City of Focsani has approximately 105,000 inhabitants and therefore the

waste generation of approximately 35,000 tones yearly during the last 7 years sounds

reasonable.

For the baseline study the yearly deposited waste shown in Figure 2 is expected, which will

give a total waste amount of 570,000 tones when delivery of waste is planned to stop in

2006.


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Waste Depos ited (Focsani Landf ill)

0

5000

10000

15000

20000

25000

30000

3500040000

45000

1970

1972

1974

1976

19781980

1982

1984

1986

1988

1990

1992

1994

1996

199820

0020

0220

04

Year

tons/yr

Figure 2: Yearly amount of waste disposed of at the Focsani Landfill.

In 1997 a Level I Environmental Impact Assessment (IEA) was carried out for the landfill,

and the waste composition was analyzed. The results were reviewed in year 2000, and from

these the following composition is expected to be present when waste is delivered to the

landfill:

General Data

Inhabitants serviced 105,000

Starting date of landfill operation 1970

Expected date of landfill closure 2006

Actual area of the landfill 5.5 ha

Effective area of waste disposal 4.7 ha

Waste Composit ion (From 1997)

Municipal Solid Waste (household waste) 80%

Industrail Waste 0%

Demolition Waste 1%

Garden Waste 18%Hazardous Waste Not allowed

Other 1%

Table 2: Data from consultations and a Level I EIA

The analysis in 1997 also showed a total content of organic matter of 70 % when the waste

was delivered. Analyses of the LFG in each of the three holes drilled in November 2003

were taken with a portable gas analyzer. The temperature was measured in a depth of only

0.5 meters, which does not give the correct temperature deeper in the waste. However, since

the gas stream is upwards the temperature will be somewhat close to that found further down

in the holes. The results are shown in Table 3, which can be seen in detail in Annex D.


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Average LFG Content (3 test analyses in November 2003)

Methane, CH4% 62

Carbon Dioxide, CO2% 21

Oxygen, O2% 2

Nitrogen, N2% 15Temperatue,

OC 13

Average Desopi ted Waste Analysis

Water Content, % 40

Water Vapour, % 8

Dry Matter, % 60

Volatile solids, % 20

Total Organic Carbon (TOC), % 6

Table 3: Average analysis data for waste-in-place, Focsani 2003

The CH4was measured to be 53 % in two of the holes and 79 % in one of the holes. 79 % is

very unusual and will definitely change to a lower percentage if the LFG was sucked fromthe hole. But in general the gas percentage is quite good. The temperature of 12 to 15

0C,

which is low, but will probably be a bit higher deeper in the landfill.

Samples were taken of the waste as the three holes were drilled. Samples were collected for

every 1 meter and analyzed at a Romanian laboratory for the waste analysis items shown in

Table 3. The results can be seen in detail in Annex D. The analysis shows organic matter

(volatile solids) of 8 to 38 % - in average about 20 %. There is a big difference compared

with the analysis of the organic matter from delivered waste in 1997, which was 70 %, which

indicates that a large part of the organics from the waste delivered to the landfill has been

converted or removed. The analysis of the organic carbon shows an average of

approximately 6 %, which correspond to 60 kg of Corg.per tones of waste in place. There is

some uncertainty with regards to the sampling and analysis methods used, where the actualvalues may vary a bit from the obtained results.

There seems to be a low content of organic material in the waste in place at the landfill. One

reason can be that the gypsies at the landfill recycle a portion of the material that contains

organic matter. They collect a portion of the wood and cardboard which contain slowly

degradable organic material which produces gas over a long period of time. Another

important factor that may lead to lower available organic matter is that the gypsies tend to

burn small amounts of the waste to keep warm in the winter months. Small self ignition fires

also occur periodically. These factors and normal degradation are believed to be the cause of

a lower amount of available organic matter than that which was expected. Additionally, the

content of organic carbon (6%) corresponds to analysis of similar landfills in Romania.

Therefore, the organic carbon analysis gives the most accurate estimate of the available

degradable organic matter and is the best obtained data that can be used for the estimation of

gas production.


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5. Project Description

This JI project includes the recovery of LFG from the City of Focsani landfill and the

utilization of the gas in the existing primary boilers at the CET. The purpose of the project isto generate ERs which will be purchased by the Danish Government. At the same time the

project will decrease the environmental impact of the landfill on the surrounding

environment and allow the management company to generate income which can be used to

establish a new landfill with improved environmental protection.

5.1 Results and benefits from the project

The activities of this JI project will result in the general improvement of the local and global

environment through the recovery of LFG and the reduction of GHG emissions. The major

results and benefits of the project are listed below.

Contribute to the overall improvement of solid waste management inFocsani by introducing new technology and increasing financial resources

of the landfill management company.

Improve the immediate environment adjacent to the landfill by reducingharmful and odorous gas emissions, and reducing the risk of explosions

and fires caused by gas migration.

Increase the use of renewable energy technology and resources in Romaniaand decreasing the need for imported fossil fuels at the same time.

Increase of economic activity in the local area through supply and wrokscontracts for the construction and operation of the landfill gas recovery and

utilization system.

Increase of the knowledge base of landfill gas recovery and utilizationthrough the training of operation and maintenance personnel, plus the

cataloging of data and analysis thereof.

Income from the project may be used for additional environmentalimprovements at the existing landfill, and possibly help fund the new

landfill.

5.2 Purpose of the project and description of the project activity

The purpose of this JI project is to reduce greenhouse gas emissions from the Focsani landfill

by converting the CH4gas fraction in LFG to CO2through combustion. The project will alsoreplace the use of fossil fuels by utilizing the LFG for energy purposes, and at the same time

enhance the environment in and around the landfill by minimizing odors and the explosion

risk from the emitted LFG.

This JI project will be developed based on the amount of extracted LFG from the Focsani

landfill. The amount of LFG extraction is estimated in this PDD and the estimate will be

verified at during physical project implementation. A gas extraction system will be installed

at the landfill along with a torch to flare the LFG during emergencies. Furthermore, a gas

transmission pipe may be extended to the City of Focsani, where the gas can be used in

boilers at the existing CET plant.


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5.3 General description of the technologies to be implemented

Over the past 25 years the technology for the extraction and utilization of LFG has

developed to the point where there are today roughly 1150 operational plants worldwide.

Approximately 730 of the plants are established in Europe and of these 24 are in Denmark.

The technology utilized in Denmark and in other countries around the world is chosen for the

proposed plant in Focsani. Therefore, technology utilized in Focsani will be similar to this

well proven existing technology.

A LFG plant consists of an extraction and a utilization system, which vary in setup and

operation. The extraction system can consist of vertical perforated pipes, horizontal

perforated pipes, or ditches, and in few cases a gas collecting membrane covering the

landfill. The gas is sucked out from the landfill by means of a gas pump and pressed through

a transmission pipe to the utilization system.

The utilization system can consist of several different options. The most common method is

to utilize the gas as fuel in a gas engine and power generator. In most cases only the

electricity is sold to a power company, as for example in the US where this is done for 255

of the 355 plants. In other cases, especially in some countries in Europe, a Combined Heatand Power Plant (CHP Plant) is used and the heat from the engine and exhaust cooling

system is utilized for heat energy purposes. Another common method is to utilize the gas in a

gas boiler for production of hot water or steam for heating of process heat. There are also

other possibilities for using the LFG, such as direct use, upgrading to natural gas quality, fuel

for Vehicles, use in fuel cells, leachate evaporation, etc, but these are not all well proven

technologies and in most cases they are not profitable.

5.3.1 Extraction system

At the Focsani landfill the extraction system will be made of approximately 30 vertical wells.

The depth of the individual wells will vary depending on the depth of the landfill waste. The

average depth of the landfill waste is approximately 13 m, where the average depth of the

wells will be approximately 12 meters. The wells will be drilled with a diameter of 600 1,000 mm and perforated vertical plastic pipes will be inserted and surrounded by gravel in

the wells. In this manner gas will be extracted from the surrounding waste.

In some landfills, in which there are problems with leachate water in wells, a pumping

system to remove the leachate will be necessary. In Focsani water was found in one of the

three test drillings at a depth of approximately 13 meters, and therefore this may not to be a

problem at Focsani landfill. However, when the wells are executed it has to be decided if any

leachate removal arrangements will be necessary.

A gas extraction pipe is connected to a horizontal suction pipe, which leads the gas to the

MPR (Measuring, Pump and Regulation) -module. Every gas well has a separate suction

pipe connected to the MPR-module. The LFG has approximately 100% humidity, which will

form condensate in the pipelines, when the gas temperature during the winter time decreasesthe horizontal pipes freeze shut if installed at the surface. For this reason the pipelines must

be buried in a depth free of frost and furthermore a water/condensate trap must be

established.

Another possibility for the gas extraction system is to have one or two main pipelines to

which the pipes from the individual wells are connected. In such cases it is necessary to

regulate the flow from each well at the wellhead, which is very difficult when the landfill is

in operation and being filled up continuously over the years. The main pipelines should then

be connected to a pump module.


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5.3.2 MPR - Module

MPR-module is an abbreviation for Measuring, Pumping and Regulation-module. The gas

extraction system handles approximately 300 m3/h with 30 pipes entering the MPR

container from the individual wells. The MPR module can be made from a 40 feet steel

container which is placed adjacent to the house at the entrance of the landfill.

In the MPR module the pipes from the 30 individual wells are connected to a manifold. Each

pipe has a regulation valve, a flow meter, and a sampling valve for measurement of the gas

quality with a portable gas analyzer instrument. Furthermore a gas filter is placed in the

module along with a flame arrester and gas pump for the extraction of the gas from the

landfill and pressing the gas to the flare and/or the utilization system.

5.3.3 Transmission Pipe

From the MPR-module the gas flows into the gas transmission pipe under pressure. This pipe

leads the gas to the flare as well as to the utilization system in the City of Focsani, which is

located 3.5 km from the landfill.

5.3.4 Utilization system

The LFG will be utilized as fuel in burners at the existing boilers at the CET plant in the City

of Focsani, or flared on site.

Flaring

The LFG is flared in an on-site torch which is placed approximately 25 m from the MPR-

module. Though the regulation of gas extraction from the individual wells often takes place

at the wellhead when the gas is flared, it would in this case be regulate in the MPR-module.

This is due to the fact that the landfill is still in operation and waste will continue to be

placed on the top for few more years in the future.

Figure 3 shows the extraction system including the MPR Module, which is described in

section 5.3.1 and 5.3.2. The landfill gas is flared in a Torch placed approximately 25 m fromthe MPR module. By flaring the gas the CH4 is converted to CO2and water, which means

that there are no CH4emission by which the greenhouse effect from the methane is reduced.

Fuel switch at the CET plant at enet S.A.

The LFG is transported via a 3.5 km gas transmission pipeline to the CET plant in the City of

Focsani which is owned by Enet S.A.. The LFG will be mixed with natural gas that is used to

fire the primary boiler burners. In this case the LFG will replace a portion of the natural gas

demand from the boilers. A process scheme for LFG utilization at the CET Plant is shown in

below.


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Process scheme for Boiler Plant

Cooling

System

Cooling

System

Existing

Boiler

Existing

BoilerFilterFilter

Flare

Measuring and

Regulation

System

Measuring and

Regulation

System

MPR Module Exist. Steam Boiler Plant

Landfill

Wells Steam

Blower Burner

Natural Gas

for power

generation

Figure 3: Process scheme for an LFG Recovery plant with a CET Plant

Figure 3shows the extraction system and MPR Module as described in sections 5.3.1and

5.3.2. Utilization will take place in the two existing steam boilers at the CHP plant. Theboilers operate year-round and are fuelled with 2,200 m3/h of natural gas. The approximately

300 m3/h of LFG, which corresponds to 150 m3/h of natural gas, a fraction of the natural gas

demand, will be mixed with the natural gas and used direct in the boilers burners.

5.4 Training and maintenance

Training of the operational staff will be the responsibility of the project developer,

technology supplier and management companies. The training of operational staff shall be

conducted before the commissioning of project facilities, with additional training once the

project facilities are in place and operating. This should secure a full understanding of

equipment function and the monitoring procedures. All training shall be in accordance with

equipment manufactures recommendations and those of the project developer.

The inspection and maintenance of equipment shall occur on a regular bases in accordance

with equipment manufactures recommendations. Maintenance procedures shall be developed

and documented for equipment as recommended by manufactures and the project developer.

These procedures shall place the highest emphases on the safety of personnel and the prompt

repair of equipment.

Concrete measures for training and maintenance can not be developed at this stage since

specific equipment has not been selected and facility design has not been preformed. This

will occur after the final approval of the JI project.

5.5 Social aspects

The extraction of gas from the landfill will lead to a considerable decrease of emissions from

the landfill which will enhance the environment for workers at the landfill including gypsies.

The project activity will require employees for construction plus operation and maintenance.

Both skilled and unskilled labor will be need during the project period. Thus, the project

will create new jobs in the area while improving the local environment.


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5.6 Time schedule

Table 4 illustrates the expected time schedule for implementation of this project activity.

In order to determine the exact size of the utilization system it can be decided to divide the

project in two different implementation phases. The first phase will include the installation,

start up and running of the extraction system including the MPR and the flare. The secondphase of installation includes the start up and operation of the utilization system. This will

prolong the total implementation of the project activity by approximately 5 months

depending on the delivery time for supplies and works.

It is anticipated that the actual implementation of the project will begin in the second half of

2005 and the JI component will extend until the end of 2012. Therefore, the AAU and ERU

crediting period will continue from the beginning of 2006 until the end of 2012.

ACTIVITY AND MONTH 1 2 3 4 5 6 7 8 9 10 11 12

Functional description and design

Application and approval by authorities

Negotiations and approval for transmission pipeAgreements for the delivery of energy

Preparation of tender documents

Evaluation of tenders

Builder and contractor contacts

Detail design by the contractors

Manufacture and delivery of pipes

Manufacture and delivery of transmission pipe

Manufacture and delivery of MPR and Flare

Manufacture and delivery of CHP system

Drilling and installation of extraction system

Installation of MPR and FlareInstallation of transmission pipe

Installation of CHP plant

Commissioning & Training

Startup and operation

Table 4: Suggestion for a time schedule for establishing an LFG Plant in Focsani


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6. Summary of the Stakeholder Process

At the present time DEPA and RMEWM have defined a national stakeholder process for JI

projects. The arrangements include project specific consultations with the stakeholdersinvolved in the project, including officials at RMEWM. The final arrangements for

stakeholder consultations will include the project specific stakeholders and the public. In

this case the final draft of this PDD shall be distributed to the project specific stakeholders

and the Independent Entity (DOE), plus posted for the public. The PDD will be posted for a

period of one month were comments from the parties, stakeholders, UNFCCC accredited

observers, and the public will be gathered and handled in the appropriate manner. During

this period the PDD will be posted in the websites of DEPA, RMEWM, and the Independent

Entity, plus a hard copy will be posted at the Municipal Counsel and Mayors Office in

Focsani.

6.1 The current stakeholder process

In the course of developing this PDD a stakeholder process has been initiated in relation to

the stakeholders involved in the projects development to date. The stakeholders in this

process and their project relations are shown in Figure 4 and are described in the succeeding

paragraphs along with the various types of interaction to date.

Figure 4: Project stakeholders in the current stakeholder process


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6.2 Project stakeholders

DEPA: Is the investor party and is the responsible party for JI projects for the Danish

Government.

RMEWM: Is the host party and is the responsible party for JI projects for the Romanian

Government. RMEWM also houses the Wastes and Hazardous Substances Directorate who

is responsible for national landfill activities in Romania.

The Vrancea County Environmental Protection Agency: Is the regional authority

responsible for the support and implementation of regional and national environmental

policies and regulations.

The City of Focsani: Is the responsible local authority for this JI project, where planning,

regulation, and approval are handled by the City Council and the Mayors Office.

Compania de Utilitati Publice R.A. (CUP): Is the utility management company for the

City of Focsani. It is responsible for all issues in regards to the operation and management

of the landfill.

Enet S.A.: Is the CET management company for the City of Focsani. It is responsible for

all issues in regards to the operation and management of the combined heat and power

facilities plus the Citys hot water distribution system.

Electrica S.A.: Is the commercial power distribution company which buys and supplies all

electric power in the local area. Electrica S.A. is responsible for the operation and

maintenance of the power distribution network and is partially controlled by oversight from

the Romanian national energy authority, ANRE.

Grue & Hornstrup A/S: Is the project developer who is contracted by DEPA to

investigated the JI project potential in Romania and to develop the PDDs for various LFG

projects in Romania. Grue & Hornstrup A/S has subcontracted the firm LFG Consult Aps asthe landfill gas expert for this JI project.

Stakeholder consultations and meetings have occurred since the start of project development

in April 2003 to the issuance of this PDD. Documentation from these meetings can be

obtained by reasonable authorities through contacts at Grue & Hornstrup A/S.


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7. Additionality Assessment

Step 0. Preliminary screening based on the starting date of the project activity

Grue & Hornstrup A/S and LFG Consult Aps, working on behalf of DEPA, started the

investigation of Joint Implementation project potential at the Focsani landfill in August

2003. The project activity is not expected to start until the first quarter of 2006.

Step 1. Identification of alternatives to the project activity consistent with current laws

and regulations

Sub-step 1a. Define alternatives to the project activity:

There are identified four plausible alternatives to the project activity.

1. Business as usual where there will be no system for the recovery andflaring or utilization of LFG.

2. Flaring system only - where a system for the recovery of LFG is installedand the LFG is partially or totally flared.

3. The project activity without JI where a system for the recovery of LFG isinstalled and the LFG is utilized in the existing boiler plant (CET).

4. The project activity with electricity generation where a system for therecovery of LFG is installed and the LFG is utilized to produce electricity

in a gas engine.

Alternative 1 is a very likely scenario under current conditions in Romania, and would

require no new investment from the City Hall. Alternative 2 is very unlikely since no

income will be generated, only costs. Alternatives 3 and 4 are likely since income would be

gained under the activity, but both alternatives are dependent on energy and fuel prices in

Romania and financing.

Sub-step 1b. Enforcement of applicable laws and regulations:

In the past decade the Romanian government has established a number of laws and directives

related to landfills and there environmental impact, where Government Decision no.

349/2005 is the most encompassing law with regards to the land filling of waste. The

development of policies and regulations in respect to this is predominately the responsibilityof RMEWM, where the inspection and enforcement responsibility lies with the county

environmental protection agencies (EPAs). Romanian laws and regulations do not require

landfill gas recovery and its combustion at existing landfills at this time. This includes local

and regional policies or regulations at such existing landfills. This being said, Romanian

Government Decision 349/2005, requires the capture, flaring, or utilization of landfill gases

from new landfills, and the ending of waste delivery/deposit at Focsani by 2009.

Government Decision 349/2005 is based on the Romanian Governments commitment to EU

accession under the Environmental Chapter. It remains to be seen whether the conditions

under Government Decision 349/2005 can be fulfilled due to the financial constraints of

Romanian municipalities and the lower priority of allocating funds for existing landfills over

other infrastructure projects. For the time being existing municipal landfill operations are

grandfathered into policies and regulations as non-permitted landfills. The major issue for


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closure is the financial support for establishing new landfills upon the closure of existing

ones, and the associated costs of closure.

Landfill gas recovery and utilization is an advanced solid waste and energy technology that

is not widespread in the waste management sector in Romania. The technology is relatively

unavailable to municipal and city waste management companies due to its lack of

implementation in Romania and its extensive investment costs. There are no known

municipal regulations which require landfill gas recovery and utilization. The only clear

influencing regulations involve those associated with EU accession which ascertains that any

new landfill shall be established with systems for the venting and flaring of LFG.

Outside of JI agreements and new landfills it is expected that there will be no

implementation of such systems at exiting landfills up to 2013, and most likely for a number

of years afterwards depending on the economic situation that develops. Therefore, it is not

expected that the City of Focsani would be able to fund any kind of landfill gas recovery and

combustion project before 2013 without Joint Implementation.

Step 2. Investment analysis

Sub-step 2a. Determine appropriate analysis method

It is determined that the most appropriate investments analysis method is that which uses an

investment comparison analysis.

Sub-step 2b. Apply investment comparison analysis

Under an investment comparison analysis the Net Present Value (NPV) of the alternatives

described in Step 1 will be assessed. A discount rate of 10% will be applied to the NPV.

Sub-step 2c. Calculation and comparison of financial indicators

It is clear through investment analysis that only the project activity under Joint

Implementation is economically viable. All other alternatives will lead to a substantial debt

for the City Hall and waste management compnay (CUP). A summary table of this financial

analysis is provided below with greater detail provided in Annex E.

Alt ernative

Estimated

Investment Costs

()

NPV 10% ()

1 0 0

2 350,000 -460,7863 565,000 -245,688

4 1,035,000 -804,605

JI Project 565,000 185,336

Table 5: Investment comparison analysis

Sub-step 2d. Sensitivity analysis

There are three parameters which can have an impact on the investment comparison analysis.

They are the amount of landfill gas recovery, the price of natural gas, and the price of

electricity. Since all of the alternatives to the project activity end in a negative NPV, it is


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clear that only and increase in the three mentioned parameters will positively affect the

financial outcome of the alternatives. The uncertainty of landfill gas generation models is

well documented and therefore a sensitivity analysis will take into account a 15% average

increase in the recovery of landfill gas. The prices of electricity and natural gas in Romania

are low compared to Western Europe, but are regulated by Romanian institutions and will

likely rise over the years until 2013. Taking this into account an average increase of 20%over the project period could be expected, and will be taken into account.

The resulting NPV of the compounded changes in these parameters are listed below. The

change in parameters still indicates that the alternatives are not financially viable and thus

will not be selected by the City of Focsani for implementation.

Alt ernative

Estimated

Investment Costs

()

NPV 10% ()

1 0 02 350,000 -460,786

3 565,000 -56,389

4 1,035,000 -693,004

JI Project 565,000 374,634

Table 6: Sensitivit-investment analysis

Step 3. Barrier analysis

Sub-step 3a. Identify barriers that would prevent the implementation of type of the

proposed project activity:

Investment Barriers

In Romania there is an overall lack of financing for the development of landfill technology

and LFG recovery. Romanian government expenditures (national and local) on waste

management are low and only cover the operation of existing facilities and regulatory costs.

This is due to the low taxes and fees on waste disposal that are associated with Romanias

transition economy. Local banking institutions are not interested in financing improvements

for local environmental investments due to low profitability from public sector activities.

This follows the general lack of investment in Romania which is associated to one of the

least favorable business investment climates in Eastern Europe according to EBRDs Review

on the Romanian Economy (2003). This is in part due to inflation which leads to a NationBank Rate of 8% (July 2005).

Municipalities are also stretched in their ability to finance infrastructure projects due to

governmental constraints on the amount of credit they can barrow and their priority for other

projects such as water and wastewater treatment and system improvements. At the moment

EU ISPA funds, which cover only a portion of the capital investment of projects, cover

projects where new landfills are to be established along with total solid waste management

systems.

The Romanian government does have initiative programs for the development and

promotion of renewable energy but the programs suffer from a lack of funding and are

progressing at a slow pace (UN Environmental Performance Review on Romania, 2001).

Only a few demonstration projects have been developed under the programs and involve


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geothermal and biomass energy (wood or straw). This initiative has only demonstrated these

technologies, however the successful full-scale implementation of geothermal and biomass

energy is being established through the involvement of JI projects. Two such government

backed institutions are the Romanian Agency for Energy Conservation (ARCE) which

provides grants for energy efficiency projects and Romanian Energy Efficiency Fund

(FREE) which provides loans for energy efficiency projects. At the moment ARCE is notproviding grants for new projects and FREE only provides commercial type loans.

Technological Barriers

This project activity will establish one of the first landfill gas extraction and utilization

systems in Romania. Landfill gas recovery and utilization is an advanced solid waste and

energy technology which is not currently utilized by the waste management sector in

Romania. The technology is relatively unavailable to municipal and city waste management

companies due to its lack of implementation in Romania and its extensive investment costs.

It is foreseeable that LFG recovery and utilization technology will increasingly become

available to municipalities and cities in the next decades as existing landfills are closed andnew ones started. The majority of funding for implementing the technology will inevitably

come from international developments funds (such as the EUs ISPA program for new

landfills). Therefore, it is expected that the technology will only be implemented on a small

scale for new landfills in the short term, before 2013. Utilization of landfill gas to produce

energy, outside of JI projects, is highly unlikely due to the low price of gas and electricity.

It should be noted that a few landfill gas related JI projects are planned in Romania in the

coming years. The Dutch ERUPT4 program has signed a contract with developers to

implement JI landfill gas projects in Baia Mare, Satu Mare, Sfantu Gheorghe, and Oradea.

While the DanishCarbon.dk program is looking at projects in Tagru Mures, Galati, Cluj

Napoca, and Suceava.

Sub-step 3 b. Show that the identified barriers would not prevent the implementation of at

least one ofthe alternatives (except the proposed project activity):

Due to the high investment cost and lack of financial viability, the only plausible alternative

for the Focsani Landfill beyond the JI project activity is the Buisness as Usual scenario

(alternative 1).

Step 4. Common practice analysis

Sub-step 4a. Analyze other activities similar to the proposed project activity:

Outside of JI, the only activities that are similar to the proposed project activity are theinstallation of landfill gas recovery and flaring systems under the EU ISPA program at new

landfills. These projects, which often involve the major Romanian cities, involve whole

waste management systems with investments in the tens of millions euros. These projects

can cover the closing of old landfills, but it remains to be seen how this is actually done in

practice. From start to finish these ISPA projects take a number of years before installations

are actually established and operating. Due to financial constrains Focsani will not

participate in an ISPA project for solid waste management.

Sub-step 4b. Discuss any similar options that are occurring:

See sub-step 3a


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Step 5. Impact of CDM registration

The activities of this JI project will result in the general improvement of the local and global

environment through the recovery of LFG and the reduction of GHG emissions. The major

results and benefits of the project are listed below.

Contribute to the overall improvement of solid waste management in Focsani byintroducing new technology and increasing financial resources of the landfill

management company.

Improves the immediate environment adjacent to the landfill by reducing harmfuland odorous gas emissions, and reducing the risk of explosions and fires caused by

gas migration.

Increase the use of renewable energy technology and resources in Romania anddecreasing the need for imported fossil fuels at the same time.

Increase of economic activity in the local area through supply and works contractsfor the construction and operation of the landfill gas recovery and utilization system.

Increase of the knowledge base of landfill gas recovery and utilization through thetraining of operation and maintenance personnel, plus the cataloging of data and

analysis ther

Pdd Focsani v3.0

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