This section suggests specific steps to quantify net emissions reductions at Santa Elisa. The objective is to arrive at a conservative estimate established in metric tons of carbon-equivalent (mtC). As previously mentioned, net emissions reductions for the Santa Elisa project must be compared on the basis of the carbon content of the fossil fuel replaced. Thus, once a credible baseline has been identified, the principal parameters that determine the actual emissions reductions are (i) the baseline carbon emission intensity, (ii) the project emissions (if any) and (iii) the projects’ energy production rates.

Once the baseline case has been defined, the carbon accounting for energy supply projects is relatively simple. Since the Santa Elisa project will result in electric energy generation from biomass renewable sources, the net greenhouse gas savings will be realized from the reduction of fossil fuel use in thermal power generation plants that would supply electricity in the baseline case. The Santa Elisa output is then multiplied by the appropriate carbon intensity for the associated baseline electricity to determine net greenhouse gas emission reductions as follows:

ERnei — EbCh £pCp

where:

Eb = Energy produced in baseline case (generally assumed to be equal to Ep)

Сь = Carbon intensity of energy in baseline case Ep = Energy produced in the project case

Cp = Carbon intensity of energy in project case (generally assumed to be zero)

In many renewable energy projects, one can generally assume the project carbon intensity is zero, including sustainably grown biomass fuel. Thus, the carbon emission reduction is the product of the baseline carbon intensity and the measured energy supplied (or sold) by the project. Thus:

ERnei = EpCb—EpCp=EpCb

These two remaining values, the baseline carbon intensity (Сь) and the electric energy produced by the projects (Ep), are the parameters that must be quantified and measured in order to generate certified emission reductions (CERs).Thus, renewable energy supply projects can be relatively simple in that they require monitoring of only the project emissions (if any) and the energy production rates, once the baseline carbon intensity has been determined.

The baseline carbon intensity (Сь) is based on the carbon content of the fuel combusted by the baseline generation source and the efficiency with which that source operates. The assumed baseline source burns natural gas. The standard factor for the carbon content of natural gas is 0.0153 mtC/GJ according to the IPCC (1996). The typical marginal source is a combined-cycle turbine plant with a net thermal efficiency of 45 per cent, which corresponds to a heat rate of 8.0GJ/MWh. From these two parameters, the baseline carbon intensity can be calculated as follows:

Carbon intensity (mtC/MWh)

3.6 GJ/MWh [by definition] * Carbon content of fuel (mtC/GJ)

— Net thermal efficiency of plant

„ , . . , 3.6 GJ/MWh*0.0153 mtC/GJ

Carbon intensity (mtC/MWh) =————————————-

= 0.122 mtC/MWh

The renewable generation technologies emit little or no direct GHG emissions. To the extent that there are some direct C02 emissions from fossil fuel use, for example for start-up or stand-by generators or for biomass fuel production and transporta­tion, these emissions should be deducted from the total project emission reductions. However, there is no need for separate baseline calculations to account for this.

The primary source of net emission reductions for renewable energy projects is the reduction in fossil-fuel use at thermal generating stations that can be replaced or deferred by the project. This emission reduction mechanism is generally the only relevant mechanism. However, one should consider other emission sources and reduction mechanisms that have been identified in the biomass energy project.

These mechanisms include non-C02 GHG emissions, carbon sequestration, and indirect emissions resulting from the project.

At Santa Elisa, these emissions will be small or negligible, and we do not expect them to affect the baseline. Moreover, the fuel sources for the biomass energy project are assumed to be in the form of residues rather than wood from forestry planta­tions. Nonetheless, use of biomass fuel produces no net emissions, if the biomass is produced sustainably within the project.

Indirect emission impacts can result from project construction, transportation of materials and fuel (at least in the baseline), and other up-stream activities. These emissions are expected to be negligible compared to the emission reductions resulting from replacing thermal generation with renewable sources. These up-stream activities are also outside the system boundary, which includes the Santa Elisa Sugar Mill, the existing electricity generation and transmission system, and the future generation and transmission facilities to which the project will be interconnected.