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					Project Idea Note                                      The Coke Dry Quenching Project of Xingtai
                                                          Iron and Steel Group Company Limited
                                                              Date of Submission:January, 2006

                                   PROJECT IDEA NOTE

A. Project description, type, location and schedule

Name of Project: The Coke Dry Quenching Project of Xingtai Iron and Steel Group
Company Limited

Technical summary of the project Date submitted:          January, 2006

Objective of the project           The objective of the proposed project is energy saving and
                                   environmental protection.
                                   Red-hot coke is quenched by circulating inert gases within a closed
                                   environment, preventing discharge of coke particles, while the heat
                                   energy of the red-hot coke is recovered into the waste heat boiler for
                                   use as process steam in the factory or generating electricity to grid.
                                   The project will reduce the amount of fossil fuel consumption,
                                   improve the quality of coke and contribute to the mitigation of global
                                   warming.
Project description and               The coke plant has two coke ovens, the total dry coke production is
proposed activities                969700 tons per year. A 110t/h rating power coke dry quenching
                                   steam cycle system is installed in the two65-hole and 4.3-meter-height
                                   coke ovens to recover the heat of red coke, thus saving the energy. Its
                                   annual coke production is 952,000 ton. The total annual steam
                                   production adds up to 533,120 ton which could be utilized in
                                   production process.
                                      . The heat energy of the red-hot coke is recovered into the waste
                                   heat boiler for use as generating electricity. The CDQ Steam Power
                                   Generating Station has one set of 12MW turbo generator, whose
                                   capacity is 12MW. The total power generation capacity is 66.75×
                                   106kWh per year.
                                        The proposal project will annually save 39597.65 ton of coal and
                                   reduce 66, 750 tCO2-equivalent emission, meanwhile, the coke
                                   quality is improved and coke ratio is reduced by 2.0%.

Technology to be employed               Coke dry quenching equipment (hereinafter called CDQ furnace)
                                   is a kind of equipment in which coke dry quenching technology is
                                   involved to reclaim coke and release heat energy. CDQ furnace can be
                                   used to improve the quality of coke and reclaim red coke, while
                                   making heat energy to the effect of energy saving and environmental
                                   protection.
                                        The proposed activities will adopt Nippon Steel Corporation
                                   technology, include CDQ equipment and CDQ waste heat electricity
                                   generation system, and one set of grounding dust collecting station
                                   will be built to catch a great lot of dust and powder from CDQ
                                   production and coke conveyance. This is an outstanding
                                   environmentally protective technology on national main industrials.

Project developer
Name of the project developer      Xing Tai Iron and Steel Group Co. Ltd.
Organizational category            d.private company
Other function(s) of the project   a.Sponsor
Project Idea Note                                            The Coke Dry Quenching Project of Xingtai
                                                                Iron and Steel Group Company Limited
                                                                    Date of Submission:January, 2006

developer in the project               b.Operational Entity under the CDM
Summary of the relevant                The Xintai Iron and Steel Group Company Limited, is one of the
experience of the project              largest iron and steel integrated enterprises in China.Since the practice
developer                              of open-up policy throughout China, the Corporation has enjoyed
                                       sustained economic growth year by year. The project developer has
                                       no experience for CDM project.
Address                                No.233 Qingyuan street,Shijiazhuang,Hebei Province,the
                                       P.R.China,050021
Contact person                         Mr. Jiang Dong, Hebei CDM Project Office
Telephone / fax                        Tel:+86-311-85813891/85877165
                                       Fax: +86-311-85813891
E-mail and web address, if any         Hqdong817@163.com,yl_0315@163.com
Project sponsors
(List and provide the following information for all project sponsors)
Name of the project sponsor          XingTai Iron and Steel Group Co. Ltd.
Organizational category              d.private company
Address (include web address, if No.233 Qingyuan street,Shijiazhuang ,Hebei Province,the
any)                                 P.R.China,050021
Main activities                      Develop and maintain the proposed project
Summary of the financials            The totally fixed assets of Xintai Iron and Steel Group Co.Ltd. is
                                     RMB 3430.53million yuan.
Type of the project
Greenhouse gases targeted             CO2
Type of activities                   Abatement
Field of activities
  b. Energy demand                   improvement of energy efficiency of existing production equipment

Location of the project
Region                                 East Asia & Pacific
Country                                The People’s Republic Of China
City                                   Hebei Province
Brief description of the location of   The project locates in Xintai Iron and Steel Group Co., Ltd that sits
the project                            in the southwest of Xingtai City.
Expected schedule
Earliest project start date            2007
Estimate of time required before       Time required for financial commitments: 2 months
becoming operational after             Time required for legal matters: 2 months
approval of the PIN                    Time required for negotiations: 2 months
                                       Time required for construction: 6months
Expected first year of verified
Emission Reduction or CER /            2008
ERU delivery
Project lifetime                       20 years
Current status or phase of the         ·Feasibility study finished
project
Current status of the acceptance       Letter of No Objection is under consideration.
of the Host Country
The position of the Host               The Host Country
Country with regard to the                c. signed the Kyoto Protocol.
Kyoto Protocol
Project Idea Note                                       The Coke Dry Quenching Project of Xingtai
                                                           Iron and Steel Group Company Limited
                                                               Date of Submission:January, 2006

B. Expected environmental and social benefits

Estimate of Greenhouse Gases Annual: 66,100tCO2-equivalent
abated / CO2 Sequestered (in   Up to and including 2012: 330,000tCO2-equivalent
metric tons of CO2-equivalent) Up to a period of 10 years: 660,000tCO2-equivalent
                               Up to a period of 7 years: 462,000tCO2-equivalent
                               Up to a period of 14 years: 924,000tCO2-equivalent
Baseline scenario               In this project, the conventional CWQ (coke wet quenching)
                                         facilities in the cooling process of iron and steel factories, which
                                         are commonly employed in China, will be replaced with CDQ
                                         (coke dry quenching) facilities. The heat energy of the red-hot
                                         coke is recovered into the waste heat boiler for generating
                                         electricity to grid, thus reducing the amount of fossil fuel
                                         consumption(coal). It will lead to reduction of GHG emissions.
                                     In the absence of the proposed project, the coal fired captive
                                         power plant will be built to supply the electricity power, or the
                                         grid- power will be increase output capacity. Therefore, no
                                         emission reductions will be achieved in the baseline scenario.
                                     Because investment in a CDQ project is more expensive compared
                                        to CWQ project, thus, without the income from sales of CER’s,
                                        the proposed CDM project activity would not happen,and
                                        without the project activity, the conventional CWQ (coke wet
                                        quenching) facilities in the cooling process of iron and steel
                                        factory would continue. And the waste gas will exhaust to
                                        atmosphere directly.
                                     The proposed project will lead to reduction of GHG emissions
                                        corresponding to 66,100 tonnes of CO2 equivalent per year and
                                        661,000 tonnes of CO2 equivalent during 10 years. The emission
                                        reduction will come through waste heat recovery.

For sequestration projects only:    No
Existing vegetation and land use


Specific global & local
environmental benefits
Which guidelines will be applied?   No
Local benefits                      The environmental benefits in terms of GHG emission reductions will
                                    come from savings of primary fuels (coal) due to the waste heat
                                    recovery of the CDQ system. The red hot coke is cooled by Inert
                                    gases in the airproof CDQ chamber. With perfect sealing measures
                                    and dust collecting system, the dust and powder pollution during the
                                    coke discharging will be controlled easily, and the atmosphere
                                    pollution and the impact to surrounding equipment can be eliminated.
                                    Therefore, the environmental protection of CDQ is better than coke
                                    wet quenching system.
                                       CDQ is an innovative technology that not only reduces dust, soot
                                    and CO2 emissions, thereby contributing to environmental protection,
                                    but also achieves great energy savings by recovering waste heat, and
                                    is of great benefit to the sustainable development of China.
Project Idea Note                                         The Coke Dry Quenching Project of Xingtai
                                                             Iron and Steel Group Company Limited
                                                                 Date of Submission:January, 2006

Global benefits                       GHG emission reduction
Socio-economic aspects                In CDQ process, the sensible heat in red hot is recovered and
What social and economic effects      utilized in steam form. A great deal of energy can be saved,
can be attributed to the project      accordingly the heat emission is decreased effectively. Compared
and which would not have              with coke wet quenching, 83% of sensible heat in red hot coke can
occurred in a comparable              be recovered in CDQ process. About 1.35GJ heat can be
situation without that project?       recovered from 1t coke. If the project put into operation, 66.75×
Indicate the communities and the         6
                                      10 KWH electricity will be saved, and the quality of CDQ coke is
number of people that will benefit    improved, and the productivity will be increased by 1%.
from this project.                    About 20,000 persons living in the around of the project will benefit
                                      from this project as a result of the improvement of environment.
Which guidelines will be applied?     No
                                      The construction and operation of the proposed project will create
What are the possible direct          many working opportunities for local people.
effects (e.g., employment
creation, capital required, foreign
exchange effects)?
What are the possible other           As a new technology, the CDQ equipment is not a well-known
effects? For example:                 concept, so it is a need to provide capacity building in the field of
                                     planning and operating the system. This capacity building is part of
                                      the project activity.
Environmental strategy/               There exists a huge energy saving potential in China, the efficient
priorities of the Host Country        reduction of the energy consumption will bring about the significant
                                      effect on GHG emission reduction. The CDQ technologies will be
                                      the emphasis of energy efficiency improvement in iron and steel
                                      plant, and in favor of global GHG emission reduction and
                                      sustainable development of China。
                                      This technology is encouraged in the development policy for iron and
                                      steel industry in China. Therefore it will be supported by the Chinese
                                      Government.
C. Finance
Total project cost estimate
Development costs                     2.51 US$ million
Installed costs                       1.16 US$ million
Other costs                           15.94 US$million
Total project costs                   19.61 US$million
Sources of finance to be
sought or already identified
Equity                                XingTai Iron and Steel Group Co., Ltd (19.54 US$million)
Debt – Long-term                      0
Debt - Short term                     Bank credit (0.031 US$million)
Not identified                        0.039US$million
Carbon finance contribution           0
sought
Carbon finance contribution in        0
advance payments. (The
quantum of upfront payment will
depend on the assessed risk of
the project by the World Bank.)
Sources of carbon finance             No
Indicative CER/ERU or vER             8 US$/ tCO2e
Project Idea Note                                      The Coke Dry Quenching Project of Xingtai
                                                          Iron and Steel Group Company Limited
                                                              Date of Submission:January, 2006

Price (subject to negotiation )
Total Emission Reduction
Purchase Agreement (ERPA)
Value
A period until 2012 (end of the      2.64US$million
first budget period)
A period of 10 years                 5.28US$million
A period of 7 years                  3.696US$million
A period of 14 years (2 * 7 years)   7.392US$million
                                     No
If financial analysis is
available for the proposed
CDM activity, provide the
forecast financial internal rate
of return for the project with
and without the CER
revenues. Provide the financial
rate of return at the expected
CER price above and US$3/
tCO2e. DO NOT assume any
up-front payment from the
PCF in the financial analysis
that includes PCF revenue
stream.
 Please provide a spreadsheet to
support these calculations.

				
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