DURBAN’SGAS-TO-ELECTRICITY PROJECT
UEMPUEMPREFERENCE GROUP MEETING ON
CLIMATE CHANGE NELSON MANDELA BAY
8 APRIL 2010
John ParkinDeputy Head: Plant & Engineering
eThekwini Municipality
AFRICA’S FIRSTLANDFILL GASCDM PROJECT
UNSUSPECTING & NAIVE
“I learnt that courage was not the“I learnt that courage was not theabsence of fear,
but the triumph over it”
(Nelson Mandela)(Nelson Mandela)
CHAMPION
ETHEKWINI MUNICIPAL AREA
“Component One”
(the Mariannhill and La Mercy Landfills)
700 000 CER700 000 CER
MARIANNHILL LANDFILL
1 MW ENGINE
LA MERCY LANDFILL
0,5 MW ENGINE
“Component Two”
(the Bisasar Road Landfill)
3 100 000 CER
BISASAR ROAD LANDFILL
INITIAL GENERATION 4 MW
NEW ENGINE PLACEMENT MAY 2009
COMMISSIONED 6,5 MW JULY 2009
• PIN• PCN
The CDM Project Process
• PCN• Conditional Approval from DNA (DME)• Base-Line Study• Validation Report• MP (Monitoring Plan)• PDD (Project Design Document)• Comment from Public and Stakeholders• EIA Process and obtain ROD for Project• EIA Process and obtain ROD for Project• Verification of Project• Final DNA Approval• Project Registration with CDM Exec Board
First contact with PCF/World Bank
MOU between eThekwini and PCF –
November 2001
February 2003
LFG-to-Elec CDM Project Time Frames
Commence EIA’s –
Adhoc Approval for funds –
ROD’s for Mariannhill and La Mercy (“Component One”) –
Appeal against “Component One”
July 2003
October 2003
July 2004
August 2004
Appeal response to Minister of DAEA for “Component One” –
ROD Bisasar (“Component Two”) –
Started construction …. “Component One” -
September 2004
October 2004
January 2006
Final Revised ROD for “Component Two” (Bisasar) –
CDM Registration of Component 1 (Mariannhill & La Mercy) –
Commissioning of Mariannhill & La Mercy Flares & Gens –
August 2006
November 2006
Nov~Dec 2006
LFG-to-Elec CDM Project Time Frame Cont
Commissioning of Mariannhill & La Mercy Flares & Gens –
Initial Verification of Component 1 –
“Component Two” (Bisasar) Start Construction –
Verification of “Component 1” Year 1
Nov~Dec 2006
January 2007
March 2007
January 2008
Commissioning of Bisasar Rd Flare & Engines
Registration of Component 2 (Bisasar Rd)-
Commissioning of 6 MW Component 2 ( Bisasar Rd)
March 2008
March 2009
July 2009
Site Methane Destruction
Electricity Generation
TOTALS
Calculated Emission Reductions(in tons)
Bisasar Road 5,295,296 800,704 6,096,000
Mariannhill 1,112,568 112,344 1,224,912
La Mercy 488,972 24,511 513,483
TOTALS 6,896,836 937,559 7,834,395
THE TEAM
• In House Project Management
• Legal Imbemu Environmental Legal Services• Legal Imbemu Environmental Legal Services
• Gas Specialist SLR Ltd ( UK )
• Civil Consultants Wilson & Pass Inc.
• PCF World Bank
• DTI & DME
• French Development Bank• French Development Bank
• EIA Felehetsa / WSP Environmental
• External Verifiers (was SGS now DNV)
• CER Purchaser (Trading Emissions Plc)
WHEN THINGS GO WRONG
ADMINISTRATIVE CHALLENGES• MFMA & SCM don’t deal with out of ordinary
processes
• EIA Process problematic
• Registration by UNFCCC Ex Board long, • Registration by UNFCCC Ex Board long, tedious & pedantic
• Inconsistent decisions by Ex Board
• No direct access to Ex Board
• Monitoring Onerous, expensive
• Language is often a barrier
• Drawn out process
• Whole process is costly
• DOE accreditation
TECHNICAL CHALLENGES
• Lack of Expertise & Resources
• Extreme weather conditions• Extreme weather conditions
• Excess leachate; poorly run site
• Manufacturers supplying incorrect equipment
• Lack of sharing information
• Lack of Experience / Technical Ability
110mm Rain
In one & half
hours
TOO MUCH LIQUID
LA MERCY LANDFILL
OPERATING CHALLENGES
• Service Suppliers lack of Expertise
• Cost of Spares & oil• Cost of Spares & oil
• Cost of Services
• Availability of Spares
• Need good Quality Assurance
• Monitoring: correct procedures• Monitoring: correct procedures
• Logging of raw data & interpretation
LEASONS LEARNED
• Be weary of “Experts”
• Easier to deal with Technical challenges than • Easier to deal with Technical challenges than Political & Administrative issues
• Running of Landfill is as important as the Extraction Process
• Carry out a pre Verification Inspection, saves a lot of stress at verificationa lot of stress at verification
• Add six months to any time frame given
• Cash flow is a major problem
WE’RE STILL LEARNING
JOB CREATION
• 157 Temporary unskilled
• 23 Temporary skilled
• 11 Permanent skilled ( Artisan & Higher )
• 4 Bursaries BScEng ( civil )
FRUSTRATED NO CONTROL
OUTWEIGHED AH ST- - F IT
SHOW ME THE MONEY
• The capital and operating expenditures of the project are supported by two revenue
Project Review
the project are supported by two revenue streams:
– Sale of Carbon Credits – Sale of Electricity
• Without the sale of carbon credits, the project would not be financially viable.
ELECTRICITY SALESUNITS HIGH
RATEAMOUNT LOW
RATEAMOUNT REFIT
RATEAMOUNT
PEAK 441583 108,86 480707,25 30,45 134462,02 90,00 397424,70
STAND-ARD
1068681 28,36 303077,93 18,68 199629,61 90,00 961812,90
OFF PEAK
1469577 15,18 223081,79 13,07 192073,71 90,00 1322619,30
SUR-CHARGE
105306,73 56900,07 273978,21
MAX DEMAND
38880,06 38880,06 38880,06
1151053,76 621945,47 2994715,17
CASH FLOW
INCOME EXPENDITURE
• ELECTRICITY SALES R720 000 / month
• CARBON CREDITS R2 200 000 / month
• CAPITAL EXPENDITURE TO DATE R65 000 000
• ANNUAL OPERATING R8 000 000
• TOTAL R 35 040 000 / annum
Concluding Comments-Landfill gas offers a viable renewable energy source only when linked to Carbon Finance or CDM (R0.57/kWh)
-VER’s may be more viable than CER’s due to over the top requirements of UNFCCC Ex. Boardrequirements of UNFCCC Ex. Board
-The EIA process has over-ripened this fruit – lost two years
- Lack of Technical Skills is restricting expansion in Africa
-Implementation of proven technologies is a must-Implementation of proven technologies is a must
-Distance from Europe is detrimental to fast reaction
-Exchange rate has a dramatic influence on cash flow
EXCEEDED EXPECTATION
THANKS FOR YOUR ATTENTION
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