Waste Heat Recovery

PROJECT IDEA NOTE
A. Project description, type, location and schedule

Name of Project: Waste Heat Recovery and Utilization for Power Generation Project in
Quzhai Cement Works Co., LTD
Technical summary of the project Date submitted:2006.3
Objective of the project
The main objectives of the project activity are to meet a part of electricity supply needs of the
Quzhai cement works and to reduce greenhouse gas emissions through the recovery and use of
waste heat from the two cement clinker production lines.
Project description and proposed activities
The Quzhai cement works produces high-quality cement using a new dry process technique
and has been implemented in two production linesthe 2*2500 tonnes per day clinker production
lines commenced operation in 2002 and 2004 and has a current capacity of more than 2,000,000
tonnes of cement production per annum with two kilns in operation.
The project activity will capture the waste heat for use in a power generation plant. The power
generation plant will be rated at 9MW and will produce 64.8 million KWh of annual electricity
generation with no significant associated emissions of CO2. The electricity generated by the
project activity would displace the equivalent amount of electricity supplies by the grid before,
thereby reducing the emission of CO2 from burning of fossil fuels at thermal power plants mainly
supplying power to the grid and 54,191 tonnes/year of CO2 emission can be avoided.
Technology to be employed
The production system consists of four sets of waste heat recovery (WHR) boiler, two situated
at the rear of the rotating kilns called rear WHR boilers, the another two situated at the head of
the rotating kilns called head WHR boilers. The rear WHR boiler has two stages-steam stage and
hot water stage; the head WHR boiler has one stage-steam stage. The technology to be used is a
combination of these 4 WHR boilers, one situated at each end of the two rotating kilns of the
cement production lines, two of WHR boilers of one cement production line with a single 4.5MW
steam turbine generator, located between the two cement production lines. Totally capacity of the
steam turbine generator is 9MW.
Project developer
Name of the project developer
Organizational category
d.Private company
Other function(s) of the project developer in the project a. Sponsor
b. Operational Entity under the CDM
Summary of the relevant experience of the project developer The project developer has engaged
in cement producer for several years. It has a current capacity of more than 2,000,000 tonnes of
cement production annually and has more than 1000 employees.
The project developer has no experience for CDM project.
Address
No.233 Qingyuan Street, Shijiazhuang City, Hebei Province,
P.R.China. 050021
Contact person
Mr. Jiang Dong , Hebei CDM Project Office
Telephone / fax
Tel:+ 86-311-85877165, FAX:+86-31185813891
E-mail and web address, if any
[email protected], http://www.hebcdm.gov.cn/
Project sponsors
(List and provide the following information for all project sponsors)
Name of the project sponsor
Organizational category
d. Private company
Address (include web address, if any)
No.233 Qingyuan Street, Shijiazhuang City, Hebei Province, P.R.China 050021
Main activities
Quzhai Cement Works has engaged in cement producer for
several years. It has a current capacity of more than 2,000,000 tonnes of cement production
annually and has more than 1000 employees.
Summary of the financials
The company is a large cement production enterprise, with a
capital of RMB450 miillion. In 2005, its sales income was RMB600million, with the profits of RMB
60 million.
Type of the project
Greenhouse gases targeted
CO2
Type of activities
Abatement
Field of activities
a. Energy supply
Improving energy efficiency by replacing existing equipment
Location of the project
Region
East Asia & Pacific
Country
The Peoples Republic of China
City
Shijiazhuang
Brief description of the location of the project
The project is located within the Qizhai Cement Works Co. Ltd. The site is at distance of 15 km
west of Shijiazhuang, the capital city of Hebei Province.
Expected schedule
Earliest project start date
January 1st, 2007
Estimate of time required before becoming operational after approval of the PIN Time required
for financial commitments: 2 months
Time required for legal matters: 1 months
Time required for negotiations: 2 months
Time required for construction: 7 months
Expected first year of verified Emission Reduction or CER / ERU delivery
2007
Project lifetime
20 years
Current status or phase of the project Feasibility Study report has finished
Equipment will be used has decided
Current status of the acceptance of the Host Country
Letter of No Objection is under discussion.
The position of the Host Country with regard to the Kyoto Protocol
The Host Country
d. is a Party to the Kyoto Protocol
B. Expected environmental and social benefits
Estimate of Greenhouse Gases abated / CO2 Sequestered (in metric tons of CO2equivalent)
Annual: 54,191 tCO2-equivalent
Up to and including 2012: 325,146 tCO2-equivalent
Up to a period of 10 years: 541,910tCO2-equivalent
Up to a period of 7 years: 379,337 tCO2-equivalent
Up to a period of 14 years: 758,674 tCO2-equivalent
Baseline scenario
In the absence of the Project Activity, the waste heat from the cement production lines would
continue to be mainly vented to atmosphere. To meet the needs for cement production, the power
supply might come from the North China Power Grid as currently.
Baseline scenario:
Continuation of equivalent import of electricity from the North China Power Grid is the baseline
scenario as it faces no prohibitive barrier and is also economically attractive.
Specific global & local environmental benefits
Which guidelines will be applied?
No
Local benefits
Significantly reduce harmful emissions (including SOx, NOx and floating particles), and thus
improve the local environment.
Lead to a reduction in the temperature of the vented hot air from over 200 to 90 and also
reduce the volume of water that is consumed by the humidifying pump in the cooling tower and
thereby save water resources in local dry area.
Increase small fraction of employment for semi-skilled and skilled labour and professionals in
the region by providing direct and indirect employment.
Global benefits
The proposed project activities will abate GHG emissions, which is benefit to mitigate global
climate change.
Socio-economic aspects
What social and economic effects can be attributed to the project and which would not have
occurred in a comparable situation without that project?
Indicate the communities and the number of people that will benefit from this project.
Lead to an increase in local staff employed.
Local people near the cement Ltd. will benefit from this project as a result of the improvement of
environment.
A major share of the regions electricity is generated from fossil fuel sources, mostly from coal
based thermal power plants. The project activity would be able to displace/replace electricity
generated by grid -connected power plant thus saving further exploitation and depletion of natural
resources-coal, or else increasing its availability to other important process.
Which guidelines will be applied?
No
What are the possible direct effects (e.g., employment creation, capital required, foreign
exchange effects)?
Lead to an increase in local staff employed.
Obtain extra fund from CER buyer and increase the IRR of this project.
What are the possible other effects? For example:
Encourage other cement works to use waste heat for saving energy in Hebei Province
Environmental strategy/ priorities of the Host Country
The Chinese government has outlined the circular economy ideas. The basis of the circular
economy is the highly efficient use and recycling of resources.
C. Finance
Total project cost estimate
Development costs
5.15 US$million
Installed costs
2.10US$million
Other costs
1.50 US$million
Total project costs
8.75US$million
Sources of finance to be sought or already identified
Equity
4.25 US$ million
Debt Long-term
4.5 US$ million
Debt - Short term
no
Not identified
Carbon finance contribution sought
Carbon finance contribution in advance payments. (The quantum of upfront payment will depend
on the assessed risk of the project by the World Bank.)
Sources of carbon finance
Indicative CER/ERU or vER Price (subject to negotiation )
8 US$/ tCO2e
Total Emission Reduction Purchase Agreement (ERPA) Value
A period until 2012 (end of the first budget period)
2,601,168 US$.
A period of 10 years
4,335,280 US$.
A period of 7 years
A period of 14 years (2 * 7 years)
3,034,696 US$.
6,069,392 US$.
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/ tCO 2e. 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.
No

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PROJECT IDEA NOTE

A. Project description, type, location and schedule

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