PoA Course CH 7

Verification Pitfalls

Module 3: Guidance on PoA Application

Chapter 7: Recommendations and Pitfalls to Avoid

Inconsistency Among CPAs

Long Delays in the Validation Process

Physical Location Identification of CPAs

Poor Quality of the PDD

Confirmation of no Diversion of ODA

Demonstration of Additionality

Deviations from methodology

Stakeholder Consultation Process

Small-scale Methodology

Selected for a Large-scale Project

Incomplete Modalities of Communication with the Executive Board

Programme and CPA Boundaries

Not Drawn Appropriately

Applicability Criteria for the Applied Baseline and Monitoring Methodology

Measurement Methods and

Source Data in Monitoring Plan

Local Legal Requirements

on Environmental Impacts

Monitoring and Programme

Management Procedures

Crediting Period Starts

Before Inclusion

Address and support methodology applicability conditions with verifiable sources of information

State the relevant host country legal requirements for public consultation

All CPAs must be consistent and comply with the requirements in the PoA

Ensure that information provided in one section of the PoA-DD and CPA-DD is consistent with the other sections in PoA-DD or CPA-DD

Deviations from methodology must be fully justified and the DOE shall seek guidance from the CDM EB on the acceptance of the deviation before submitting the PoA for registration

Elaborate and be project-specific

Communication statement needed prior to registration request

Unnecessary delays can be considerably reduced if all the backup documents are provided along with the PoA- DD at the start of the validation

Give detailed accounts for all of the following:

Provide the exact location of each CPA to avoid double counting

• State the exact latitude and longitude of the project location

• State the exact address of the plant location

• State the proximity to some important landmarks, if any

• Contact the DOE if you are not sure which methodology to use for a specific programme
• Raise a clarification or revision request to the EB prior to the commencement of validation

Insufficient information on the measurement methods and source of data as part of data/parameter description in monitoring plan

Include a map or schematic of the physical project boundary and the system boundary, accompanied by a table defining all GHGs and mapping of on-site or off-site emissions

If receiving public funding, provide a written confirmation from the relevant Annex I country DNA that funding will not result in a diversion of official development assistance

The small-scale threshold must be met for the entire crediting period of a CPA

• Emission reductions are capped at the limit

PoA and CPA boundaries are sometimes poorly described and exclude important details:

• Fuel transportation
• Emissions outside the project boundary
• Fugitive emissions within the project boundary

Validation Pitfalls

Identification of baseline scenarios not always in line with the methodology

Some PoA-DDs and CPA-DDs contain errors and misinformation, and use incorrect or outdated forms and versions of methodologies

Starting date of a CPA's crediting cannot be prior to:

• The date when the PoA is registered by the UNFCCC
• Before the CPA is included into a PoA

Use the “Tool for the demonstration

and assessment of additionality"

• Follow the requirements given in the approved baseline methodology

The deviation shall be project-specific and shall not deviate from the methodology such that a revision to the methodology is required

Change modalities of communication with modifications of project participants

The authority/ies and responsibility for:

• PoA and CPA management
• Registration
• Monitoring
• Measurement
• Reporting

• State the relevant legal requirements in the Host Country
• State the PoA or CPA’s compliance with the requirements
• State the environmental impacts of the programme or CPA
• State the mitigation measures to be taken for any negative environmental impact that may occur from the PoA or CPA
• Include the monitoring of sustainable development indicators as part of the monitoring plan if this is required

Advantages and disadvantages of utilizing broad inclusion criteria

• Many activities vs. simplicity and validation security
• Narrow and strict eligibility criteria guarantees higher similarity among CPAs, and can facilitate the CPA inclusion process

• Clearly state the source of data
• Clearly state the measurement methods
• Clearly state the recording frequency

Establish a system/procedure to avoid including a new CPA that is already registered a CDM project activity

PoA-DD and CPA-DD lacks evidence for baseline scenario

• Financial calculation sheets
• Emission reduction calculations and evidence
• Legal permits
• Stakeholder consultation documents etc.

Plan the implementation of the CPAs to begin after the PoA-DD is published on the UNFCCC website

• State how the project complies with these requirements

• Provide a list of all the stakeholders contacted and justify why they are relevant

• Include a summary of the stakeholder comments and a summary of how these comments have been taken into account

• Provide contact details of the stakeholders to the DOE for verification

• Invite a DNA representative to these meetings

Clearly identify the deviation in the PDD and discuss it with the DOE at the beginning of the validation process

If a CPA has several components, each component must comply with the small-scale capacity thresholds limit:

• 15 MW for electricity generation, and 45 MW for thermal generation

Common Practice Analysis

Investment Analysis

Barrier Analysis

• Substantiate claims and assumptions with references to recognized sources
• Discuss sources and assumptions in a transparent way
• Justify use of default factors in baseline calculations
• State how conservative your sources and assumptions are

Use the right PoA-DD and CPA-DD template and the guidelines for completing the PoA-DD and CPA-DD

The guidelines can be found through the UNFCCC website:

Easy to lose track of the status of all required licenses and permits

• Modifications of focal point
• Changes in authorized signatories
• Change of name of a project participant
• Addition or withdrawal of project participants

Claims should be substantiated by third parties

Provide the DOE with:

• Detailed calculations in a reproducible format in Excel
• Justification of sources of information used for the analysis on discount rate, annual costs and revenues
• Time-frame used for the analysis, tax rates applied, depreciation/amortization methods, and residual values, in line with the applicable regulations
• Include costs savings in the calculations

e.g. waste gas power generation and electricity savings, no need to import electricity from the grid

• Sensitivity analysis calculation. Analysis method should be identified for each programme or CPA

Procedures for:

• Training of monitoring personnel
• Emergency preparedness for cases where emergencies can cause unintended GHG emissions
• Calibration of the monitoring equipment
• Maintenance of monitoring equipment and installations
• Monitoring, measurements and reporting
• Day-to-day records taking and maintainance
• Internal review of reported results/data, including a system for corrective actions if needed

Barriers with impact on a project’s financial viability need an investment analysis

• Step 3 of the Additionality Tool

Justify the level at which the analysis is done

Base the analysis on available, public, official and recent data

Analysis needs to be examined in conjunction with the barrier analysis

Ongoing CDM project activities and programmes are not to be included in the analysis

See the guidance on additionality of first-of-its-kind project activities:

http://cdm.unfccc.int/Reference/Guidclarif/index.html#meth

If a company-specific benchmark is applied, demonstrate that it has been used in the past to evaluate similar projects in similar conditions

Account for the time to complete the validation process to define the start date of the crediting period

Financial assessment should use parameters with the latest values available

Analyze barriers in the relevant geographical area

• Global context / country level / regional level

PoA-DD should be elaborated to avoid gaps and ambiguity in contents, so as to avoid future modifications

• Potential needed review of all CPAs and lost CER income

• Ensure that all the licenses and permits are in place before including the CPA into the PoA

http://cdm.unfccc.int/Reference/Guidclarif/index.html#meth

Challenge to prove double counting avoidance for micro-scale projects

• Addresses / electricity metering equipment combined with a statement from the user

Baseline scenario and parameters can vary from region to region

If a CPA is already operational, and data from the activities are available, use the data to cross-check appropriateness and rationality of the parameters used in the financial assessment

• Establish baseline scenarios for all regions or countries at PoA registration

• Completeness of information
• Applicability in the calculations

A justification of any deviations from the methodology should be based on:

• Conservativeness
• Availability of data/information

Curnow and Hodes, 2009: "Implementing CDM Projects - A Guidebook to Host Country Legal Issues", UNEP Risoe Centre

Transferring and Archiving Data

Congratulations on Completing the Course

Impractical Monitoring Plan

Project Implemented Differently

Practicality of Monitoring

Complementary Reading Material

Errors in transferring and archiving data

Hinostroza, 2011: "CDM PDD Guidebook - Navigating the Pitfalls", Third edition, UNEP Risø Centre

http://cd4cdm.org/Publications/PDDguidebook_3rdEdition.pdf

Projects should be implemented exactly as proposed in the PoA-DD and CPA-DD

Changes should be recorded, and related documentation updated, and if relevant be reflected in the monitoring report

Depending upon the nature of the changes to project activities, guidance should be sought from the EB

Ensure that the monitoring plan is practicable for implementation by CPA developers

Initiate steps to facilitate implementation of the plan

Conduct periodic internal audits and take corrective actions

Test Your Knowledge

Practicalities, accounting for reliability, maintenance, ease of use, and cost of monitoring should be considered when designing the monitoring plan

Sampling provisions can be used for monitoring, both for validation and verification

Sampling method/procedure to be used by DOEs should be described in the PoA-DD

If verification method does not use sampling but verifies each CPA, a transparent system should be defined and described to ensure that no double accounting occur and that verification can be determined at anytime for each CPA

• Implement a data quality control-assurance process

e.g., cross-check manually recorded and transferred data

• Internal audits can be a good tool for reviewing the quality of the data

• Ensure that the monitoring equipment used is adequate

To test the knowledge you attained throughout the course, follow the links below to complete the multiple choice questionnaires for each chapter, and the assignment for Chapter 6:

Chapter 1: http://www.classmarker.com/online-test/start/?quiz=hvy51add1c4dc8e4

Chapter 2: http://www.classmarker.com/online-test/start/?quiz=hay51addf4cd3c8e

Chapter 3: http://www.classmarker.com/online-test/start/?quiz=eav51adf58f6c838

Chapter 4: http://www.classmarker.com/online-test/start/?quiz=6ng51b0443842aad

Chapter 5: http://www.classmarker.com/online-test/start/?quiz=a6b51b05bd07fef1

Chapter 6: http://www.classmarker.com/online-test/start/?quiz=bdy51b062d389718