Val Rep

VALIDATION REPORT
E.ON CARBON SOURCING

GMBH
VALIDATION OF THE
GUNUNG MEGANG ADD-ON
COMBINED CYCLE PROJECT
REPORT NO. SINGAPORE -VAL/022/2012

REVISION NO. 2. 3
BUREAU VERITAS CERTIFICATION

62/71 Boulevard du Chteau
92571 Neuilly Sur Seine Cdx - France
Report Template Revision 14 01/11/2011

Report No: Singapore -val/022/2012 rev. 2.3

VALIDATION REPORT
Date of first issue: Organizational unit:

10/02/2012 Bureau Veritas Certification
Holding SAS
Client: Client ref.:
E.ON Carbon Sourcing GmBH Mr.Eliano Russo
Summary:
Bureau Veritas Certification has made the validation of the Gunung Megang Add-On Combined Cycle Project
project of E.ON Carbon Sourcing GmBH located in JI. Raya Palembang Muara Enim, Km. 152 Gunung
Megang, Muara Enim, South Sumatra, Indonesia on the basis of UNFCCC criteria for the CDM, as well as
criteria given to provide for consistent project operations, monitoring and reporting. UNFCCC criteria refer to
Article 12 of the Kyoto Protocol, the CDM rules and modalities and the subsequent decisions by the CDM
Executive Board, as well as the host country criteria.
The validation scope is defined as an independent and objective review of the project design document, the
projects baseline study, monitoring plan and other relevant documents, and consisted of the following three
phases: i) desk review of the project design and the baseline and monitoring plan; ii) follow-up interviews with
project stakeholders; iii) resolution of outstanding issues and the issuance of the final validation report and
opinion. The overall validation, from Contract Review to Validation Report & Opinion, was conducted using
Bureau Veritas Certification internal procedures.
The first output of the validation process is a list of Clarification and Corrective Actions Requests (CL and
CAR), presented in Appendix A. Taking into account this output, the project proponent revised its project
design document.
In summary, it is Bureau Veritas Certifications opinion that the project correctly applies the baseline and
monitoring methodology ACM 0007 / Version 6.1.0 and meets the relevant UNFCCC requirements for the
CDM and the relevant host country criteria.
Report No.: Subject Group:

Singapore-val/022/2012 CDM Indexing terms
Project title: Work approved by:
Gunung Megang Add-on Combined Cycle
Project
Matthieu Martini
Work carried out by:
Mr. Ram M. Desai (Lead Verifier) No distribution without permission from the
Ms. So Shuk Ling (Verifier) Client or responsible organizational unit
Mr. Kusheru Wibowo (Local Legal Expert)
Mr. Sushil Budhia (Financial Expert)
Internal Technical Review carried our by:
H.B. Muralidhar Limited distribution
Date of this revision: Rev. No.: Number of pages:

06/02/2013 2.3 174 Unrestricted distribution
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VALIDATION REPORT
Table of Contents Page
1 INTRODUCTION ................................................................................................... 5
1.1 Objective 5
1.2 Scope 5
1.3 Validation team 5
2 METHODOLOGY .................................................................................................. 6
2.1 Review of Documents 6
2.2 Follow-up Interviews 6
2.3 Resolution of Clarification and Corrective Action Requests 7
2.4 Internal Technical Review 7
3 VALIDATION CONCLUSIONS ........................................................................ 8

3.1 Approval (43-44) 8
3.2 Authorization (49) 9
3.3 Sustainable Development (52) 10
3.4 Modalities of Communication (58,61) 10
3.5 Project design document (63) 10
3.6 Changes in the Project Activity(17) 10
3.7 Project description (69) 11
3.8 Baseline and monitoring methodology 13
3.8.1 General requirement (77) 13
3.8.2 Project boundary (86-87) 16
3.8.3 Baseline identification (94-95) 16
3.8.4 Algorithms and/or formulae used to determine emission reductions
(90-100) 19
3.9 Additionality of a project activity (104) 27
3.9.1 Prior consideration of the clean development mechanism (112) 27
3.9.1.1 Historical information on project timeline 29
3.9.2 Identification of alternatives (116) 29
3.9.3 Investment analysis (123) 29
3.9.4 Barrier analysis (127) 40
3.9.5 Common practice analysis (130) 40
3.10 Monitoring plan (133) 41
3.11 Environmental Impacts (137) 42
3.12 Local stakeholder consultation (140) 43
4 COMMENTS BY PARTIES, STAKEHOLDERS AND NGOS ............. 43
5 VALIDATION OPINION .................................................................................... 43
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6 REFERENCES ..................................................................................................... 45
7 CURRICULA VITAE OF THE DOES VALIDATION TEAM

MEMBERS ............................................................................................................. 50
APPENDIX A: COMPANY CDM PROJECT VALIDATION PROTOCOL ..................... 51
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Abbreviations
CAR Corrective Action Request
CDM Clean Development Mechanism
CER Certified Emission Reductions
ER Emission Reduction
CL Clarification Request
CO2 Carbon Dioxide
DOE Designated Operational Entity
GHG Green House Gas(es)
I Interview
EB Executive Board
PDD Project Design Document
UNFCCC United Nations Framework Convention for Climate Change
DNA Designated National Authority
M&P Modalities and Procedure
VVS Validation and Verification Standard
MP Monitoring Plan
NPV Net Present Value
PO Purchase Order
MW Mega Watt
MWh Mega Watt Hour
O&M Operation and Maintenance
PP Project Participant
kW Kilo Watt
MMSCFD Million Standard Cubic Feet per Day
RPM Revolutions Per Minute
KV Kilovolts
EPC Engineering, Procurement & Construction
HRSG Heat Recovery Steam Generator
PLN Perusahaan Listrik Negara
GE General Electricals
Meppogen PT Metaepsi Pejebe Power Generation
EIA Environmental Impact Assessment
SD Support Document
USD United States Dollar
CCGT Combined Cycle Gas Turbine
PLF Plant Load Factor
LOA Letter of Approval
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1 INTRODUCTION
E.ON Carbon Sourcing GmBH has commissioned Bureau Veritas Certification to
validate its CDM project Gunung Megang Add-On Combined Cycle Project (hereafter
called the project) at JI. Raya Palembang Muara Enim, Km. 152, Gunung Megang,
Muara Enim , South Sumatra, Indonesia.
This report summarizes the findings of the validation of the project, performed on the
basis of UNFCCC criteria, as well as criteria given to provide for consistent project
operations, monitoring and reporting.
1.1 Objective
The validation serves as project design verification and is a requirement of all projects.
The validation is an independent third party assessment of the project design. In
particular, the project's baseline, the monitoring plan (MP), and the projects compliance
with relevant UNFCCC and host country criteria are validated in order to confirm that
the project design, as documented, is sound and reasonable, and meets the stated
requirements and identified criteria. Validation is a requirement for all CDM projects and
is seen as necessary to provide assurance to stakeholders of the quality of the project
and its intended generation of certified emission reductions (CERs).
UNFCCC criteria refer to Article 12 of the Kyoto Protocol, the CDM rules and modalities
and the subsequent decisions by the CDM Executive Board, as well as the host country
criteria.
1.2 Scope
The validation scope is defined as an independent and objective review of the project
design document, the projects baseline study and monitoring plan and other relevant
documents. The information in these documents is reviewed against Kyoto Protocol
requirements, UNFCCC rules and associated interpretations.
The validation is not meant to provide any consulting towards the Client. However,
stated requests for clarifications and/or corrective actions may provide input for
improvement of the project design.
1.3 Validation team

The validation team consists of the following personnel:
FUNCTION NAME CODE TASK

HOLDER* PERFORMED
Lead Verifier Mr. Ram M. Desai Yes No DR SV RI
Verifier Ms. So Shuk Ling Yes No DR SV RI
Technical Mr. Kusheru Wibowo
Yes No DR SV RI
Specialist (Local Legal Expert )
Financial Ms. Lim Chai Eng
Specialist (Internal Financial Yes No DR SV RI
Specialist)
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Mr. Sushil Budhia

(External Financial
Specialist)
Internal H.B. Muralidhar
Technical Yes No DR SV RI
Reviewer (ITR)
Specialist N.A.
Yes No DR SV RI
supporting ITR
*DR = Document Review; SV = Site Visit; RI = Report issuance
2 METHODOLOGY
The overall validation, from Contract Review to Validation Report & Opinion, was
conducted using Bureau Veritas Certification internal procedures.
In order to ensure transparency, a validation protocol was customized for the project,
according to the version 03.0 of the Clean Development Mechanism Validation and
Verification Standard, issued by CDM Executive Board at its 70th meeting on
23/11/2012 [1]. The protocol shows, in a transparent manner, criteria (requirements),
means of validation and the results from validating the identified criteria. The validation
protocol serves the following purposes:
It organizes, details and clarifies the requirements a CDM project is expected to
meet;
It ensures a transparent validation process where the validator will document
how a particular requirement has been validated and the result of the validation.
The completed validation protocol is enclosed in Appendix A to this report.
2.1 Review of Documents

The Project Design Document (PDD) submitted by E.ON Carbon Sourcing GmBH and
additional background documents related to the project design and baseline, i.e. country
Law, Guidelines for Completing the Project Design Document (CDM-PDD), Approved
methodology, Kyoto Protocol, Clarifications on Validation Requirements to be Checked
by a Designated Operational Entity were reviewed.
To address Bureau Veritas Certification corrective action and clarification requests,

E.ON Carbon sourcing GmBH revised the PDD and resubmitted it on 03/02/2012.
The validation findings presented in this report relate to the project as described in the
PDD version 1.0 and 1.2.
2.2 Follow-up Interviews

On 09/01/2012 11/01/2012 Bureau Veritas Certification performed interviews with
project stakeholders to confirm selected information and to resolve issues identified in
the document review. Representatives of E.ON Carbon Sourcing GmBH (Contractual
Partner with DOE), PT Metaepsi Pejebe Power Generation, Biosphere Capital Pte. Ltd.
(Project Consultant) and Local Stake holders were interviewed (see References). The
main topics of the interviews are summarized in Table 1.
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Table 1 Interview topics

Interviewed Interview topics
organization
E.ON Carbon Sourcing P roj ec t Des i gn and im plem ent at i on
GmBH & PT Metaepsi T ec hnic al E qui pm ent and oper at ion
Pejebe Power Compliance wit h National La ws and regulations.
Generation CDM c ons iderat ion
I nv estm ent A nal ys is
A ddit i onal ity
M oni t oring P l an
M e t er i n g S yst e m at s it e

LOCAL Stakeholder V i ews and c onc erns about t he proj ect act iv it y
Conf irm at ion of t he Loc al st ak ehol der c ons ultat i on
m eet i ng c onduc t ed by t he P roject P art ic ipant.

Biosphere Capital Pte. B as el i ne Det er m i n a t i on
Ltd. (Project Consultant) A ddit i onal ity Disc uss ions
M oni t oring P l an
G HG emiss ion reduc tion c alc ulati ons
E nv i r on m ent a l I m pacts

2.3 Resolution of Clarification and Corrective Action

Requests
The objective of this phase of the validation is to raise the requests for corrective
actions and clarification and any other outstanding issues that needed to be clarified for
Bureau Veritas Certification positive conclusion on the project design.
Corrective Action Requests (CAR) is issued, where:
(a) The project participants have made mistakes that will influence the ability of the
project activity to achieve real, measurable additional emission reductions;
(b) The CDM requirements have not been met;
(c) There is a risk that emission reductions cannot be monitored or calculated.
The validation team may also use the term Clarification Request (CL), if information is
insufficient or not clear enough to determine whether the applicable CDM requirements
have been met.
To guarantee the transparency of the verification process, the concerns raised are
documented in more detail in the verification protocol in Appendix A.
2.4 Internal Technical Review

The validation report underwent a Internal Technical Review (ITR) before requesting
registration of the project activity.
The ITR is an independent process performed to examine thoroughly that the process
of validation has been carried out in conformance with the requirements of the validation
scheme as well as internal Bureau Veritas Certification procedures.
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The Lead Verifier provides a copy of the validation report to the reviewer, including any
necessary validation documentation. The reviewer reviews the submitted
documentation for conformance with the validation scheme. This will be a
comprehensive review of all documentation generated during the validation process.
When performing an Internal Technical Review, the reviewer ensures that:
- The validation activity has been performed by the team by exercising utmost
diligence and complete adherence to the CDM rules and requirements.
- The review encompasses all aspects related to the project which includes project
design, baseline, additionality, monitoring plans and emission reduction
calculations, internal quality assurance systems of the project participant as well
as the project activity, review of the stakeholder comments and responses,
closure of CARs, CLs and FARs during the validation exercise, review of sample
documents.
The reviewer compiles clarification questions for the Lead Verifier and Validation Team
and discusses these matters with Lead Verifier.
After the agreement of the responses on the Clarification Request from the Lead
Verifier as well as the PP(s) the finalized validation report is accepted for further
processing such as uploading on the UNFCCC webpage.
3 VALIDATION CONCLUSIONS
In the following sections, the conclusions of the validation are stated.
The findings from the desk review of the original project design documents and the
findings from interviews during the follow up visit are described in the Validation
Protocol in Appendix A.
The Clarification and Corrective Action Requests are stated, where applicable, in the
following sections and are further documented in the Validation Protocol in Appendix A.
The validation of the Project resulted in 09 (Nine) Corrective Action Requests (CARs)
and 23 (Twenty Three) Clarification Requests (CLs).
The CARs and CLs were closed based on adequate responses from the Project
Participant(s) which meet the applicable requirements. They have been reassessed
before their formal acceptance and closure.
The number between brackets at the end of each section correspond to the VVS
paragraph
3.1 Approval (43-44)

The project activity involves Indonesia as host country and The Netherlands as Annex I
country. At the time of preparation of draft validation report Letter of Approval from both
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DNAs were not submitted to Validation Team by the PP, hence 02(Two) CARs were
reported.
Subsequently Project participants, PT Metaepsi Pejebe Power Generation obtained

approval from host country DNA i.e. Indonesia (Vide Letter Ref : B082/KNMPB/06/2012,
Dated. 25/06/2012)/Ref-3a/ and
EON Carbon sourcing GmbH obtained Annex I DNA i.e. The Netherlands (Vide Letter
Ref: ANL2011-571, Dated 02/04/2012)/Ref-3b/. The project participant provided both
copies of these letters to the validation team. The validation team confirmed the
authenticity of the approval by reviewing the letter. The letter of approval clearly states
that both parties have ratified Kyoto protocol and the approval is for voluntary
participation in CDM project activity. The title and contents of the letter of approval refer
to the precise proposes CDM project activity title in the PDD being submitted for the
registration. Also the letter of approval confirms that proposed project activity
contributes to the sustainable development in the host country Indonesia.
The letter of approval from the host party DNA and Annex I DNA are unconditional with
respect to party to Kyoto Protocol, Voluntary participation and project contribution to the
sustainable development.
The project title and the project participant specified in the PDD are consistent with the
letter of approval and hence it can be concluded that the letter of approval refers to the
project activity described in the PDD. Hence, the Validation team confirms that host
country approval is in accordance with paragraphs 43 44 of VVS version 0.3.0[1].
CAR-1 and CAR-2 raised earlier are now closed.

The Validation Team does not doubt the authenticity of the letters of approvals
submitted by PP
3.2 Authorization (49)

The participation for each project participant has been approved by a Party of the Kyoto
Protocol.
The validation team concluded this by checking the status of ratification of each party
involved in the project activity from the UNFCCC website through the links provided
below.
Ratification status of both host party and Annex I found valid and LOAs is representing
the correct information.
Host Country ratification Status:

http://maindb.unfccc.int/public/country.pl?country=ID
Annex I Country Ratification Status:

http://maindb.unfccc.int/public/country.pl?country=NL
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3.3 Sustainable Development (52)

The host Partys DNA confirmed the contribution of the project to the sustainable
development of the host Party. Refer to item 3.1 of this report.
The validation team noted that there is no LoA (Letter of Approval) has been obtained
from the Host country DNA as well as annex I party involved in this projects activity,
hence CAR 1 was raised and issued. Subsequently PP has submitted the LOA from
host country, on the basis of validation of LOA CAR 1 was closed.
While verifying the requirement of Host country DNA for proving sustainable
development due to implementation of the proposed project activity, PP has to fulfill
established criteria and submit a formal report to the DNA during application of statutory
compliance. It was observed that Carbon Trading Mechanism Division of Host Country
Indonesia calls for demonstrating compliance towards established sustainable
development criteria by PP through a formal Method "check" used to evaluate the
proposed CDM project, through which Project proponent should provide an explanation
and justification that the proposed project meets all indicators. A clarification CL-01 was
raised to provide sufficient evidences on the compliance towards this requirement and
please explain how PDD is aligned with the applicable indicators. PP provided
satisfactory information on the submission of the LOA Application to Host country DNA,
which includes sustainability checklist as well, based on the validation of the
sustainability checklist submitted to the Host country DNA CL1 was closed.
3.4 Modalities of Communication (58,61)

The validation team has performed due diligence on the MoC statement and validated
the corporate identity of all project participants and focal points included in the
Modalities of Communication (MoC) statement, as well as the personal identities,
including specimen signatures and employment status, of their authorized signatories.
Bureau Veritas Certification confirms that the MoC statement complies with all relevant
forms and requirements.
3.5 Project design document (63)

In line with requirement of Para 63 of VVS Version 03.0 the validation team reviewed
the web hosted PDD against the CDM EB guideline for completing the project design
document (CDM PDD)[7] for the large scale project. The Validation team validated that
the Project Design Document is based on the currently valid Project Design Document
Form (CDM-PDD) version 03[8]. While reviewing the webhosted PDD, the validation
team found that the PDD Version 1 complies with the latest form of the guidance
document and the information therein is in accordance with the applicable guidance
document and thus complies with the Para 63 of VVS, Version 03.0
3.6 Changes in the Project Activity(17)

During the site visit there was no changes observed in project as compared to details
mentioned in webhosted PDD:
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The final PDD version 1.3 has following changes as compared to PDD ver 1.0 that was
webhosted. Validation Team has verified these changes and found correct and
appropriate.
1. PDD Section A.4.3 revised to incorporate efficiencies of Equipments in baseline

and project scenario.
2. PDD Section A.4.4 revised to change Emission reduction from 1078520 tCO2 to
1041050 tCO2 for the selected 10 years crediting period.
3. PDD Section B.2 Revised to bring more clarity on Major retrofits happened
during year 2007.
4. PDD Section B.5 Table 4 Project activity events in chronological order is revised.
5. PDD Section B.5 Table 5: Few Basic parameters for financial evaluation are
revised.
6. PDD Section B.6.1 is revised to incorporate Section c & d for calculating grid
Emission factor.
7. PDD Section B.6.2 and B.7.1 is revised to meet Approved methodology
requirement.
8. Crediting period start date in section C.2.2.1. is now changed to "01/03/2013 (or
date of registration whichever is later)" as stated in PDD p.9 The combined cycle
project is expected to be commissioned in March 2013.
9. Tool for calculating the emission factor of an electricity system was updated to
latest version from PDD v1.1 to 1.2.
10. Entire PDD was revised to Version 1.3 to reflect transition from VVM to VVS
11. PDD section B.6.1 is now revised to update the Upstream Leakage calculation in
accordance with the latest Methodology i.e. ACM 007, Version 6.1.0, hence the
total Emission reductions are now changed from 104,105 tCO2/Yr to 106,172
tCO2/Yr.
12. Cascading changes in the Values of Leakage Emissions and Emission
Reductions are seen in the several PDD sections generally and in PDD sections
B.6.3 and B.6.4 Specifically.
3.7 Project description (69)

The project activity involves the conversion of existing two single-cycle gas turbines with
total installed capacity of 83.18 MW into a combined-cycle facility of 114.42 MW by the
addition of heat recovery steam generating system and a corresponding steam turbine
and generator with an installed capacity to generate 31.8 MW.
The combined-cycle facility capacity was verified during the site visit and through the
review of Annual Operational Reports for year 2008 2010, Daily operation logbooks
for current Single Cycle power plant, LM6000 Gas Turbine Specifications, Inception
Report, Slot Agreement for the purchase of Steam Turbine with Siemens. The original
gas turbines started commercial operation in the Year 2007 /Commissioning Close out
Milestone task for both Gas Turbines and Annual Operation Reports for year 2008 -
2010/.
The Conversion package to convert Single Cycle Power plant to Combined Cycle power
plant consists of following important equipments.
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Units to be
Equipment Specification
installed
Make : DELTAK
Type: Dino 3328
HRSG (Heat Recovery Rated Capacity 132.64 t/h
Steam Generating HP Steam Pressure:66.79 bar 02 Units
System) LP Steam Pressure: 6.42 bar
HP Steam Temp: 400.7oC
LP Steam Temp: 191.2oC
Make: Siemens AG
Type: SST 400
Steam Turbine Rated Capacity : 132.3 t/h 01 Unit
Steam Pressure: 64.01 bar
Steam Temp: 397.8oC
Apparent O/P : 42,947 kVA
Rated Capacity: 34,350 KW
Generator 01 Unit
Voltage: 11KV (With +/- 5% Range)
Speed: 1500 rpm
Fuel Supply System
Capacity : 18 MMSCFD 01 unit
(Natural Gas)
Validation Team has reviewed the main equipment purchase contract with Siemens
dated 18/03/2011
The project adds 31.8 MW of generating capacity to the North Sumatra national grid in
Indonesia with minimal incremental additions to greenhouse gas (GHG) emissions. The
project has a total installed capacity of 114.42 MW, generating on an average
approximately 819,060 MWh of electricity annually which will be displaced to North
Sumatra National Grid. It is expected to reduce emissions by 106,172 tCO2e per year,
which will amount to 1,061,720 tCO2e for the selected fixed crediting period of 10 years.
The fixed crediting period starts 01/03/2013 (or on the date of registration of the CDM
project activity, whichever is later).
The projects system boundaries are clearly defined as the Sumatra Grid and all power
connected to the Sumatra Grid. The project will be connected to Sumatra Grid through
the Gunung Megang Power Plant substation located at the project facility.
The project start date is 18/03/2011/Purchase Agreement with Siemens/, as it

corresponds to the final agreement between PT Metaepsi Pejebe Power Generation
(Meppogen) and Siemens regarding the equipment purchase contract /5/. Validation
team has verified the preliminary agreement between PT Metaepsi Pejebe Power
Generation (Meppogen) EDEGEL and Siemens signed in March 2011. Subsequently
PT Metaepsi Pejebe Power Generation (Meppogen) has signed a turnkey design and
construction agreement (EPC Agreement) with PT Satyamitra Surya Perkasa in the
month of September 2011. On the basis of these evidences it is concluded that that the
sign date of the final equipment purchase agreement is considered to be the earliest
date on which the project participant has committed to the expenditures related to the
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construction of the project activity, hence The project starting date is 18/03/2011/5/ and
is in accordance with the CDM Glossary of terms for the project starting date.
Based on the expertise of validation team , as well as the review of the final equipment
purchase contracts /5/ and project engineering design, it is concluded that the proposed
project activity for conversion of single cycle power plant to combined cycle power plant
reflects current good practice.
Currently site preparation and piling work is in progress at project site for installation of
HRSGs and Steam Turbine. The project will become fully operational in March 2013,
which is a targeted completion date and is found documented in the EPC contract. The
PPA is in place, which is mutual agreement signed between PT Metaepsi Power
Generation (Meppogen) /42/ and PLN on Dtd. 11/10/2011/, the contractual quantity of
power to be purchased by PLN is matching with the proposed capacity of the combined
power plant i.e. 115 MW.
Project Duration and Crediting period

The project activity is designed for 25 (Twenty five) years of lifetime for the new steam
Turbine and boilers (HRSGs), based on the default lifetime selected by the PP from the
Tool to determine the remaining Life time of the equipment.
However the project activity is dependent on the waste heat from existing gas turbines,
the project activity can only continue to operate till the completion of lifetime of existing
Gas Turbines. Hence the lifetime of the project is calculated as 14 years.
PP has selected fixed crediting period of 10 Years, which in compliance with the
Remaining life time calculated by PP using Tool to calculate remaining life time of the
equipment
The crediting period of the project activity will start on either 01/03/2013 or after the
registration of the proposed project activity. The validation team noted that the expected
date for start date of crediting period is appropriate. In case, the registration of the
proposed project later than this date, the PDD provides confirmation that crediting
period will start only after the registration of the project activity.
Validation team considers the project description to be complete and accurate, and the
PDD is in compliance with relevant forms and guidance.
The validation team hereby confirms that the project description in PDD Version 1.0
Dtd.11/11/2011, Version 1.2 Dtd. 08/06/2012 and Version 1.3 is accurate and complete
in all respects and that there are no changes to the project activity/design or boundary
as compared to the webhosted PDD.
3.8 Baseline and monitoring methodology

3.8.1 General requirement (77)
The steps taken to assess the relevant information contained in the PDD against each
applicability condition are described below.
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Applicability condition (a):The unit(s) have an operational history of at least one year
with no major retrofit, and at least one unit has an operational history of more than three
years with no major retrofit. There is no major retrofit in these time periods.
Project baseline scenario consists of two Natural Gas turbine for power generation in
single cycle mode, both turbines were installed in year 2006 and were commissioned in
year 2007 for final commercial operation, this was confirmed through verification of
various documents i.e. Annual Operational Report of year 2008 / 2009 /2010 / 2011
where first firing and first synchronization dates are captured for both turbine units and it
is substantiated with documents i.e. Commissioning Closeout milestone task,
Certification of completion and commercial Operation date documented in the official
documents by PLN for both baseline turbine units installed and commissioned by GE.
Hence it is concluded that both baseline turbine units are having operational history of
more than three years.
As far as major retrofit condition is concern, both baseline turbine units faced
breakdowns immediately after commissioning and during site visit maintenance reports
verified which confirms that both turbines were taken off and transported back to
Germany for repair and during this period the plant was running using spare turbine
supplied by GE on rental basis. However PP has not provided transparent calculations
on cost of maintenance to justify how it is not exceeding 20% threshold of cost of
construction for a new unit. Hence one CAR was raised. Subsequently PP explained
through response to the CAR, that both breakdowns were reported immediately after
the commissioning of turbines in April 2007 and thereafter no major maintenance was
reported which is seen from the maintenance records provided to validation team for
validation. Since both turbines have three years operational history subsequent to the
initial maintenance/repairs, the costs of the repairs was deemed not necessary/relevant
and hence it is concluded that this methodological condition is fulfilled.
Applicability Condition (b):In the case that a unit has less than three years operational
history: all project power unit(s) were designed and commissioned for operation in
single cycle mode only. This shall be demonstrated by the project participants by
providing relevant documents, such as original process diagrams and schemes from the
construction of the plant, licenses and/or by an on-site check by the DOE prior to
the implementation of the project activity.
Project baseline scenario consists of two Natural Gas turbine for power generation in
single cycle mode, both turbines were installed in year 2006 and were commissioned in
year 2007 for final commercial operation, this was confirmed through verification of
various documents i.e. Annual Operational Report of year 2008 / 2009 /2010 / 2011
where first firing and first synchronization dates are captured for both turbine units and it
is substantiated with documents i.e. Commissioning Closeout milestone task,
Certification of completion and commercial Operation date documented in the official
documents by PLN for both baseline turbine units installed and commissioned by GE.
Hence it is concluded that both baseline turbine units are having operational history of
more than three years.
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Applicability Condition (c): During the most recent three years prior to the
implementation of the project activity and during the crediting period the project power
unit(s) use(d) only the following fuel types:
(a) Fossil fuels; and/or (b) Blends of fossil fuels and biofuels, where the biofuel is
blended to the fossil fuel in a situation that is outside the control of the project
participants (such as regulatory requirements to blend
biodiesel with diesel or biogas with natural gas).
During site visit it was confirmed that during the most recent three years prior to the
implementation of the project activity only Natural gas was used as fuel to generate
power, which was further substantiated by the Gas supply contract signed with the Gas
Supplying company M/s PT Medco E&P Indonesia, Dtd. 20th January 2006, as per the
contract only Natural gas will be supplied to the Baseline single cycle power plant and
Combined cycle plant in project scenario. From the existing facility at site it was
confirmed that there is no other blend of fuel is used or will be used.
Applicability condition (d) : The type(s) of fossil fuels used by the project power unit(s)
during the crediting period were also used during the most recent three years prior to
the implementation of the project activity, except, where applicable, any auxiliary fuel
consumption (e.g. for start-ups) which shall not exceed 3% of the total fuel consumption
in the unit(s) (measured on an energy basis).
During site visit it was confirmed that PP has decided to continue usage of natural gas
of same specification during project scenario and there is no auxiliary fuel is being used.
Applicability Condition (e) :Moreover, this methodology is applicable under the condition
that the project activity does not increase the lifetime of the existing gas turbine or
engine during the crediting period, as determined using the .Tool to determine the
remaining lifetime of equipment. (i.e. this methodology is applicable up to the end of the
lifetime of existing gas turbine or engine, if shorter than crediting period).
Conversion of Single cycle Power plant to Combined cycle power plant does not
increases the life time of the existing gas turbines as the remaining lifetime of the
turbines is calculated as 14 years as per the Tool to determine remaining life time of
equipment which higher than that of selected fixed crediting period of 10 years, without
renewal. Hence the applicability condition is fulfilled.
The validation team hereby confirms that the selected baseline and monitoring
methodology ACM 0007 (Version 6.1.0), combined tool to identify the baseline scenario
and demonstrate additionality (Version 5.0.0), Tool to determine the remaining lifetime
of equipment (Version 01) and other methodology component are previously approved
by the CDM Executive Board, and is applicable to the project activity, which, complies
with all the applicability conditions therein.
The validation Team hereby confirms that, as a result of the implementation of the
proposed CDM project activity, there are no greenhouse gas emissions occurring within
the proposed CDM project activity boundary, which are expected to contribute more
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VALIDATION REPORT
than 1% of the overall expected average annual emissions reductions, which are not
addressed by the applied methodology.
3.8.2 Project boundary (86-87)

The spatial extent of the project boundary is the project site and the power plants
connected physically to the North Sumatra National Grid. The project will be connected
to the grid through the PLN substation located at the project facility. The defined project
boundary is in line with ACM0007 version 6.1.0.
The PP has correctly delineated the project boundary in the PDD section B.3 and it is
explained through process flow diagram. The validation team validated the project
boundary by:
a) During site visit to confirm the project boundary various documents were assessed
i.e. Power purchase agreement with PLN for power supply, Statistics book of electricity
and energy number issued by Directorate General of Electricity and energy utilization
for the Year 2007 - 2009 and commissioning report of Single cycle power plant turbine
units Dtd. 22.04.2007. Which confirms that the project boundary identification is in line
with approved Large scale Methodology ACM 0007,
b) The Single Cycle Power plant operating in baseline scenario is located 35 KM away
from town Muara Enim and situated on the top of a small hill, which is surrounded by
forest. The physical Project boundary involves following process equipments
- Natural Gas Turbines

- Generators
- Heat Recovery Steam Generators (HRSGs)
- Steam Turbine
- Generator
- Step up Transformers
- Substation with Metering system
- Natural gas fired back up generator
- Water treatment Plant
- Natural gas receiving and pumping station
Based on the above assessment, the validation team hereby confirms that the identified
boundary and the selected sources and gases are justified for the project activity.
3.8.3 Baseline identification (94-95)

The steps taken to assess the requirement given in paragraph 94 - 95 of the VVS are
described below:
As per the requirement of Approved Methodology ACM 0007 (Version 06.1.0), PP has
utilized Combined tool to identify the baseline scenario and demonstrate additionality
(Version 6.1.0).
PP has demonstrated step by step approach adopted to identify the possible alternative
scenarios and to select most plausible baseline scenario in the PDD Section B.4. The
validation team has validated the same as below
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STEP 1. Identification of alternative scenarios;

Step 1a: Define alternative scenarios to the proposed CDM project activity In order to
identify plausible and realistic baseline scenario, various options have been considered
as given below
1. Project activity undertaken without being registered as a CDM project activity
2. Continuation of the current Practice (not to implement conversion of existing

Single Cycle Power plant to Combined cycle Power Plant)
3. The proposed project activity undertaken without being registered as a CDM

Project activity at a later point in time (Due to existing regulations, end of Life of
existing equipments, financing aspects)
4. Implementation of Coal fired power plant with the installed capacity equal to
proposed project activity.
5. Oil fired power plant with the installed capacity equal to proposed project activity.
6. Renewable power plant with installed capacity equal to proposed project activity.
Alternative 1 and 2 are plausible baseline alternatives to the proposed project.

Validation Team has validated that the selected alternatives are suitable and are in
accordance with ACM0007 (Version 6.1.0).
The baseline scenarios of power from other fossil fuel power plant (coal, fuel oil) were
not considered as plausible because they are not realistic due to the following reason.
The project activity is the conversion of a natural gas based Single cycle power
generation unit to combined cycle Power plant.
Since the baseline two turbine units were already running on natural gas, and a well-
established Natural gas distribution network is available near to the project site. During
site visit it was noticed that a booster station is located in the project premises. Hence
the use of alternate fossil fuels is not practical. Also the fact that natural gas is the easily
available fossil fuel in the region, the switching of fuels is not practical and feasible as it
calls for huge investment and will result into increased GHG emission than the
Renewable energy, such as hydroelectric, wind, solar or biomass power plants, were
not considered as an alternative for the proposed project activity since it is not
comparable in terms of the availability of facilities and the scope of decision.
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Sub-step 1b: Consistency with mandatory applicable laws and regulations:

In assessing the selected baseline scenarios from step 1 for their compliance with
applicable regulations in line with the combined tool, the following regulations were
taken into consideration:
As per the Presidential Decree of Host country private sector power producers
are required to supply power under the second phase of the governments fast
track power generation program and under this phase government is intended to
get away from Coal and increase its power generation capacity to 10000 MW by
2012 2014.
Government Regulation on Electricity (Law No. 30/2009 Dated September 23,

2009)
AMDAL Regulations 2006 for the Pollution control norms in Host Country.
The baseline scenario alternative selected in step 1 are in compliance with existing
national regulations.
The validation did not reveal any specific regulation neither for the utilization of waste
heat nor for energy efficiency norms for power projects in the host country Indonesia.
In regards to pollution control norms for Air emission for the Gunung Megang power
Plant, validation team has verified that the project is in compliance and is addressing
pollution control norms for air emissions in the host country Indonesia as per the project
EIA as well as regular submissions of compliance report to government authority found
in line with AMDAL (Analisis Mengenai Dampak Lingkungan) regulation. This is been
specifically verified by the local legal expert engaged for the validation during Site visit.
All current regulation pertaining to power sector and environment in host country does
not prevent the implementation of the identified alternatives.
In the baseline, electricity would be supplied to the grid by the existing open-cycle gas
turbine power plant with same configuration and operating parameters i.e. PLF and
Efficiency as well as other power plants connected to the grid and hence Validation
Team considers the identified baseline scenario is applicable to the proposed project
activity and is realistic.
Therefore all scenarios were credible alternatives to the project proponent.
Based on the above assessment, the validation team hereby confirms that:
(a) All the assumptions and data used by the project participants are listed in the
PDD, including their references and sources;
(b) All documentation used is relevant for establishing the baseline scenario and
correctly quoted and interpreted in the PDD;
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VALIDATION REPORT
(c) Assumptions and data used in the identification of the baseline scenario are
justified appropriately, supported by evidence and can be deemed reasonable;
(d) Relevant national and/or sectoral policies and circumstances are considered and
listed in the PDD;
(e) The approved baseline methodology has been correctly applied to identify the
most reasonable baseline scenario and the identified baseline scenario
reasonably represents what would occur in the absence of the proposed CDM
project activity.
3.8.4 Algorithms and/or formulae used to determine emission

reductions (90-100)
Project participant has used the algorithm and formulae in line with the Approved
Methodology ACM 0007 (Version 06.1.0) and Tool to calculate emission factor for an
electricity system (Version 3.0.0). The detailed algorithm and formulae used are
provided in section B.6.1 and B.6.3 of the revised PDD Ver.1.3/Ref: 02/
Baseline Emission Calculation (BEy):As required under Para Baseline

Emissions of approved Methodology ACM 0007 (Version 06.1.0), project participant has
calculated the baseline emissions based on the evaluation of three cases described in
the approved methodology.
The Baseline scenario is the generation of electricity by the operation of the existing
project power unit in single cycle mode as well as by the grid connected power plants.
The project will partially displace electricity generated by the project power unit in the
baseline scenario. In addition it is also expected to displace electricity in the grid, as the
quantity of electricity generation by the plant is expected to increase as a result of the
project activity. The increase in the electricity generation is unknown to what extent
such an increase is due to the project activity or would have occurred anyway due to a
change in the electricity demand or availability of other power plants in the grid.
PP has evaluated following three cases to assess the applicability to arrive at baseline
emissions.
Case 1 The quantity of electricity generated in the project power unit, adjusted for
changes to efficiency (EGPJ,adj.y) is lower than or equal to the historical average
annual generation level (EGBL,AVR) Case 1 is not applicable for the project for
calculating baseline emissions as the electricity generated by the combined cycle power
plant will exceed the maximum electricity generation capacity of the single cycle plant.
The project activity increases the capacity from 80MW to 110MW.
Case 2 - The quantity of electricity generated in the project power unit(s), adjusted for
changes to efficiency, (EGPJ,adj,y) exceeds the historic average annual generation
level (EGBL,AVR) but is lower than or equal to the maximum annual quantity of
electricity that the project power unit(s) could have produced prior to the implementation
of the project activity (EGMAX). Baseline emissions are calculated as Case 2 is also
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not applicable for arriving at the baseline emissions as the electricity generated by the
combined cycle power plant will exceed the maximum electricity generation capacity of
the single cycle plant. The project activity increases the capacity from 80MW to
110MW.
Case 3 - The quantity of electricity generated in the project power unit(s), adjusted for
changes to efficiency, (EGPJ,adj,y) exceeds the maximum annual quantity of electricity
that the project power unit(s) could have produced prior to the implementation of the
project activity (EGMAX). Baseline emissions are calculated as Case 3 is applicable
for this project as as the electricity generated by the combined cycle power plant will
exceed the maximum electricity generation capacity of the single cycle plant. The
project activity increases the capacity from 80MW to 110MW. Operating the 110MW
CCGT plant at the planned 85% availability factor is equivalent to 93.5MW, which is
more than the total possible from the existing 80MW plant.
As per the Case 3 baseline emissions are calculated using following formulae
BE y EG BL , AVR EF CO 2 , BL , y ( EG MAX EG BL , AVR ) min( EF CO 2 , BL ; EF grid ,y )

( EG PJ , adj , y EG MAX ) EF grid ,y
Where
BEy - Baseline emissions in year y (tCO2/yr)
EGPJ,adj, - Quantity of electricity supplied by all project power units to the electricity grid in year y,
y adjusted for changes to efficiency (MWh/yr)
EGBL,AV - Average annual quantity of electricity supplied by all project power units to the electricity
R grid during the defined operational history (MWh/yr)
EGMAX - Maximum annual quantity of electricity that could be generated by all project power units in
the baseline scenario (MWh/yr)
EFCO2,B - Baseline emission factor of all project power units operated in single cycle mode
L (tCO2/MWh)
EFgrid,y - Emission factor of the electricity grid to which the project power unit is connected
(tCO2/MWh)
PP has referred to the Tool to calculate the emission factor for an electricity system in
the PDD however PP has not demonstrated that the the Emission factor for the grid is
calculated using step by step approach as prescribed by the Tool, hence CAR 5 was
raised.
In response to CAR 5 PP has revised PDD Section B.6.1 to demonstrate step by step
approach for calculating Emission Factor for an electricity system. Grid emission factor
calculations are taken from the calculations done by Badan Pengkajian dan Penerapan
Teknologi (BPPT) and approved by the Directorate General of Electricity and Energy
Utilization (DJLPE). The Indonesian DNA uses this calculation as their official grid
emission factor for the Sumatera grid. The original source of all the data was obtained
by BPPT from PT PLN Pembangkitan Sumbagut, PT PLN Pembangkitan Sumbagsel
Statistics from 2005 to 2007 and PT PLN P3B Sumatera (IPP data).
PP has submitted this official document to validation team for validation purpose and it
is observed that all steps of the prescribed tool are followed to arrive at the emission
factor for Sumatra grid
Following key assumptions are considered while calculating the value of emission factor
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VALIDATION REPORT
- Sumatra Grid is the electricity system

- Only Grid power plants are included in the calculation
- Ex Ante option using data vintage of a 3 year generation weighted average is
selected.
- Under Step 3 Option (a) is the most appropriate method to calculate Simple
Operating Margin (OM) of Sumatra Grid, Simple operating margin is calculated
using quantity of net electricity supplied to the grid by all power plants serving
grid, including low cost / must run power plant units for the period of 2003- 2007,
where it is observed from the most recent data published by the host country that
low cost / must run power plants have contributed 20.95%, 17.90%,17.28%,
19.52% and 21.99% respectively which is less than 50% of total grid generation.
This was validated using the Data of 5 years for the period 2003 -2007.
- 2003 to 2007 Total Generation Low cost / Must Run calculation for 5 years =
14,031,835 MWh
- Average % Generation of Low cost / Must Run for five years = 19.57%
- PP has selected Ex ante option to determine the emission factor for Sumatra grid
and used a 3-year generation-weighted average, based on the most recent data
available at the time of submission of the CDM-PDD to the DOE for validation,
this information is found publically available and published by Host Country DNA
in association with PT PLN Pembangkitan Sunabagut and PT PLN
Pembangkitan Sumbagasel.
- Under Step 4 PP has chosen Option B i.e the Simple OM emission factor is
calculated based on the net electricity supplied to the grid by all power plants
serving the system, not including low-cost/must-run power plants/units, and
based on the fuel type(s) and total fuel consumption of the project electricity
system using Equation (6) from the Tool to calculate the emission factor for an
electricity system, version 2.2.1.
- EF O M = 0.906 (for year 2006)
- PP has determined the annual electricity generation of the project electricity
system, excluding power units registered as CDM project activities (AEG total, in
MWh). Identified the set of power units, excluding power units registered as CDM
project activities, that started to supply electricity to the grid most recently and
that comprise 20% of AEG total (if 20% falls on part of the generation of a unit,
the generation of that unit is fully included in the calculation) (SET20%) and
determined their annual electricity generation (AEGSET-20%, in MWh);Power
plant capacity additions in the electricity System that comprise 20% of the system
generation - 3,299,757 MWh
- EF B M = 0.581 (for year 2006)
- Weighting of OM emission Factor (%)(WOM) = 0.5 Default value for 1st crediting
period
- Weighting of BM emission Factor (%)(WBM) = 0.5 Default value for 1st crediting
period
- Combined Margin (EFGrid.CM.y) = 0.743 tCO2/MWh
Validation team verified all assumptions presented, and based on the revision of PDD
and submission of an official document for demonstrating calculation of Emission factor
of Sumatra grid, validation team concludes that these assumptions are in line with the
prescribed tool and found transparent, hence the CAR 5 was closed. The Validation
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VALIDATION REPORT
team herewith confirms that the Calculation of Simple OM (EFOM) and Build Margins is
in accordance the Tool to calculate the emission factor for an electricity system,
version 3.0.0.
Project Emission Calculation (PEy) :

PP has utilized "Tool to calculate project or leakage CO2 emissions from fossil fuel
combustion". PEy is referred to in this tool as PEFC,j,y where j corresponds to the
combustion of fossil fuels to operate the project power unit(s) and to supplement the
exhaust heat in operating the steam turbine.
In this project, both emission sources are applicable
Combustion of fossil fuels to operate the project power units to supplement the exhaust
heat in operating the steam turbine
CO2 emissions from fossil fuel combustion in process j are calculated based on the
quantity of fuels combusted and the CO2 emission coefficient of those fuels, as follows:
PE FC , j , y FCi , j , x COEFi , y
i
COEFi , y NCVi , y EFCO 2,i , y
Therefore,
PE FC , j , y FC i , j , x NCVi , y EFCO 2,i , y

i
Where:
PEFC,j,y - CO2 emissions from fossil fuel combustion in process j during the year y (tCO2/yr);
FCi,j,y - Quantity of fuel type i combusted in process j during the year y (mass or volume unit/yr)
COEFi,y - CO2 emission coefficient of fuel type i in year y (tCO2/mass or volume unit)
NCVi,j - Net calorific value of the fuel type i in year y (GJ/mass or volume unit)
EFCO2,i, - Weighted average CO2 emission factor of fuel type i in year y (tCO2/GJ)
y
Leakage Emission Calculation (LEy )

Approved methodology provides two scenarios to determine the Leakages involved in
the Project activity.
PP has demonstrated in the PDD that out of two scenarios only 2nd scenario is
applicable for the proposed project activity as there was no waste heat recovered prior
to project implementation, which is confirmed by the validation team during Site visit that
existing two turbine units are attached to the stack from where waste hot gases are
being emitted into the atmosphere. There was no waste heat recovery unit or facility
evidenced at the site. Hence PP has considered Leakage emission associated with
situation that exhaust heat is already recovered prior to the project activity as Zero.
As per the 2nd scenario project activity involves increase in consumption of fossil fuel
i.e. natural gas due to addition of Steam turbine for operating the power plant in
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VALIDATION REPORT
combined cycle mode. There is an anticipated increase of 34,041,60 M3 /Year in the

consumption of Natural gas from the average baseline consumption for last three
years.
Based on above assumptions PP has calculated leakage emission associated with the
project activity using Formulae
LE y LE upstream, y LE HR, y
Where
LEy - Leakage emissions in year y (tCO2e/yr)
LEupstrea - Leakage emissions associated with the upstream emissions of an increase in fossil fuel use in the
m,y project activity in year y (tCO2e/yr)
LEHR,y - Leakage emissions due to a decrease in the amount of heat recovered from exhaust heat for purposes
other than power generation in the project, compared to the most recent year prior to the
implementation of the project activity, in year y (tCO2e/yr)
As project activity only involves Leakage emissions due to the additional consumption of
natural gas, LHR.y=0, and above equation becomes
LE y LE upstream, y
LE upstream, y
PP has calculated using following equation
1 3
FC i,x NCVi , x

max 0, FC i, y NCVi, y EFi,upstream,CH4 GWPCH4 LE LNG,CO2, y 1
3 x =1 i
LE upstream,y
i

FC i, y NCVi , y

i

Where
LEupstream,y - Leakage emissions associated with the upstream emissions of an increase in fossil fuel use in the
project activity in the year y (tCO2e/yr)
FCi,y - Quantity of fuel type i used by the project power unit(s) in year y (mass or volume unit/yr)
NCVi,y - Average net calorific value of the fuel type i used by the project power unit(s) in year y (GJ/mass or
volume unit)
EFi,upstream, - Emission factor for upstream fugitive methane emissions from production, transportation, distribution
CH4 of fossil fuel i used by the project power unit(s) in year y (tCH4/GJ)
GWPCH4 - Global warming potential of methane valid for the relevant commitment period (tCO2e/tCH4)
LELNG,CO2,y : - Leakage emissions due to fossil fuel combustion/electricity consumption associated with the
liquefaction, transportation, re-gasification and compression of LNG into a natural gas transmission
or distribution system in year y (tCO2e/yr)
FCi,x - Quantity of fuel type i used by the project power unit(s) in year x (mass or volume unit/yr)
NCVi,x - Net calorific value of fuel type i used by the project power unit(s) in year x (GJ/mass or volume unit)
X - Each year of the three years operational history
Emission Reductions ( :ER y )
As, the project activity involves electricity generation using in Combined Cycle power
plant, PP has calculated emission reductions due to the implementation of project
activity in accordance with the Approved Methodology ACM 0007 (Version 06.1.0).
The correct formulae is used by the PP to arrive at the Emission reduction.
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VALIDATION REPORT
The emission reductions are determined as follows:
ER y BE y PE y LE y
ER y
- Emissions reductions in year y (tCO2)
BE y
- Baseline emissions in year y (tCO2)
PE y
- Project emissions in year y (tCO2)
LE y
- Leakage emissions in year y (tCO2)
Validation team assessed the calculations of estimated CERs as provided by project

participant in a spreadsheet. The assumptions in this spreadsheet were validated as
follows
Parameter Value Source, Information Validation justification
Total Installed 83.178 - Gas Turbine Generator Set The installed capacity of Power plant
Capcity (Before MW Product Specification for before combined cycle mode is as per
Combined Cycle LM6000-60 the documents verified and as
Mode) observed during site visit on
-Gas turbine Performance
09/01/2012.
Sheet Dtd. 01/03/2006
- Annual Operational Report
for last three years.
Total Installed 110 MW - Proposal for Gunung Total installed capacity (after
Capcity (After Megang CCPP Project combined cycle mode) is found
Combined Cycle Add on Dtd. 27/04/11 satisfactory after verifying listed
Mode) - EPC contract with PT documents.
satyamitra Surya Perkasa
Dtd. 14/09/11
- Steam Turbine
Specification sheet
- HRSG Specification
Sheets
- Slot Agreement with
Siemens for the supply of
Steam Turbine.
Qty. of electricity 525,248 Annual operational Reports Qty of Electricity supplied by the
supplied by the MWh/yr for year 2008 to year 2010. project power plant is found derived
project power plant from the Annual operation reports.
with three years Values taken from the annual
operational history operational report found authentic as
this is also endorsed by the PLN
Maximum annual 677,051 Calculated value based on Calculation provided in the CER sheet
quantity of electricity MWh/Yr the installed capacity of the found in line with formulae provided in
that could be Power plant in baseline the Approved Methodology.
generated in the scenario and operation
Baseline hours
Average annual 525,248 Annual operational Reports Qty of Electricity supplied by the
quantity of electricity MWH/yr for year 2008 to year 2010. project power plant is found derived
supplied by all project from the Annual operation reports.
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VALIDATION REPORT
power units to the Values taken from the annual

grid during three operational report found authentic as
years operation this is also endorsed by the PLN
history
Qty. of electricity 819,060 Calculated value based on Verified these values and found
supplied by Project MWh / Yr the installed capacity of conservative based on the inputs i.e.
unit to the electricity project Power plant, Design document or Combined cycle
grid adjusted for estimated operation hours plant, EPC Contract, Equipment
changes to the and using estimated PLF specifications and PPA..
project plant of 85%
efficiency
CO2 emission factor 0.533376 Calculated value based on Inputs provided for calculating this
for electricity tCO2/ qty. of fuel used, net calorific parameter found conservative based
Generated in single MWh Vale of fuel used, and CO2 on Approved methodology
cycle mode in emission factor of fuel used. recommendations.
baseline
Quantity of Fuel 165,953,6 Calculated using Heat Rate Verified EPC contract document and
consumed in project 33 M3/yr data from the EPC contract found Heat rate data utilized is correct
power plant (Project document and conservative.
Scenario)
From the baseline and project emission calculations and IRR Calculation perspective, it
is concluded that Gas consumption is an important aspect of the project activity. PP has
used two different approaches to calculate gas consumption as provided below.
1. For IRR Calculation: using the original PPA equations/ estimates and an estimate
of gas consumed by the Duct Burners
2. For Baseline and Project emissions Calculations: Using EPC Calculations and
Methodological Formulae to estimate conservative estimate of gas cost.
The detailed EPC calculations for gas consumption were not available at the time of the
investment decision and so are not used in the IRR analysis. The PPA equations were
available and so are used to estimate gas consumption for both the project and baseline
scenarios (thus providing consistency). This source of data has been validated as
providing a conservative estimate of gas consumption from the perspective of the IRR
(i.e. compared to other methods/ data sources, it slightly under-estimates gas
consumption by the project and thus over-estimates the project IRR).
The detailed EPC calculation of gas consumption was only available after the
investment decision. This is considered more technically accurate than the
assumptions used in the PPA and so is used in the calculation of emissions reductions.
As such, the estimate of gas consumption by the project activity that is used in the
calculation of emission reductions is not the same as the estimate used in the financial
analysis. The EPC calculation estimates a lower heat rate and a slightly lower
consumption of gas by the project activity (6,674,445 6,616,366 = 58,079 mmbtu
less).
However, note also that the estimate of the total amount of gas consumed in the
baseline is also different for the financial and the emission reduction calculations. The
technical estimate of baseline gas consumption, and so baseline emissions, is
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VALIDATION REPORT
calculated based on actual historical data in accordance with the methodology. This
technical estimate of baseline gas consumption is less than the estimates based on the
heat rate specified in the PPA and used in the financial analysis (4,733,253 mmbtu
versus 5,536,881 = 803,628 mmbtu).
The gas consumption data used in the financial analysis apparently over-estimates the
gas consumption in both the baseline and project scenarios. However, because the
baseline gas consumption is over-estimated by more than the project gas consumption
(803,628 vs 58,079 mmbtu), the estimate of the additional gas consumed by the project
is thus under-estimated. Re-estimating the additional gas consumed by the project
based on the technical gas consumption data gives 1,221,477 mmbtu (6,282,573
5,954,730). As this is more than the estimate used in the financial analysis (1,137,565
mmbtu), the financial estimates are conservative from an IRR perspective as they
underestimate the gas costs of the project.
The gas consumption estimates used in the calculation of emissions reductions are
accurate and have been calculated in accordance with the methodology. The gas
consumption estimates used in the financial analysis are not the same as that used in
the emissions calculations. However, the gas consumption estimates used in the
financial analysis are based on a consistent data source that was available at the time
of the investment decision and is pertinent to financial calculations (including the tariff).
The estimates used in the financial analysis are also conservative from a point of view
of additionality.
The estimated annual average of approximately 106,172 tCO2e over the crediting
period of emission reduction represents a reasonable estimation using the assumptions
given by the PP. All the assumptions for this estimate either come from the assumptions
used for investment analysis and other technical documents i.e. PPA, Design capacity,
Historical data of operation of of gas turbine or grid emission factor. These are already
validated in sections 3.7.3 of this report. The validation team confirms that the estimates
of baseline emissions can be replicated using the information provided. It can also be
verified using the spread sheet for calculations of CERs. The baseline methodology is
correctly applied for calculation of baseline emissions and emission reductions.
In section B.6.1 of the web hosted PDD, Explanation of methodological choices refers to
the determination of the emission factor for the grid electricity system (EFgrid.y) using
tool to calculate the emission factor for an electricity system; however the step by step
approach prescribed by the tool to arrive at EFgrid.y was not demonstrated transparently
in the PDD, hence CAR 5 was raised. In response to the CAR 5 PP has incoprporated
the calculation of EFgrid in the revised PDD and presented the same in accordance with
the Tool to calculate the emission factor for an electricity system, Version 3.0.0, PP has
opted to use the Emission factor provided by the Host country DNA, which is found
acceptable and hence CAR 5 was close.
Based on the above assessment, the validation team hereby confirms that:
- All assumptions and data used by the project participants are listed in the PDD,
including their references and sources;
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VALIDATION REPORT
- All documentation used by project participants as the basis for assumptions and
source of data is correctly quoted and interpreted in the PDD;
- All values used in the PDD are considered reasonable in the context of the
proposed CDM project activity;
- The baseline methodology has been applied correctly to calculate project
emissions, baseline emissions, leakage and emission reductions;
- All estimates of the baseline emissions can be replicated using the data and
parameter values provided in the PDD.
3.9 Additionality of a project activity (104)

The project is large scale project activity, and the Approved methodology prescribes a
tool to demonstrate additionality of the project activity. PP has utilizes Tool to identify
the baseline scenario and demonstrate additionality (Version 6.1.0). As per the
requirement of tool PP has identified various Baseline scenarios and selected most
plausible alternatives amongst identified scenarios.
Baseline scenarios identified as 1 & 2 in the PDD section B.4 faces Investment barrier
and hence PP has selected Investment Analysis as an appropriate too to demonstrate
additionality of the proposed large scale project activity.
3.9.1 Prior consideration of the clean development mechanism (112)

It has been demonstrated by the timeline of events of the Project that the CDM
revenues were seriously considered by the project participant in the decision to ensue
with the Project prior to start of the Project and, the continuing and real action were
taken to secure CDM status for the Project in parallel with its implementation:
Da te Eve nts Evi de nce ve ri fi ed
24/11/2010 Manufacturing Slot Agreemet for Steam Turbine with SD38_Slot Reservation
Siemens (Which is also considered as an Investment _Agreement.
decision Date)
25/01/2011 Final Proposal from Satyamitra Surya Perkasa (SSP) SD32_Proposal for Gunung
and Black & Veatch International (BVI) Megang CCPP Project
18/03/2011 Project Participant has signed a Contract with SD9 _ST Spec Sheet
Siemens for supply of Steam Turbine for Combined
Cycle power plant.
06/05/2011 Submission of Prior Consideration of the CDM form SD20_Prior Consideration
to submit the notification of the commencement of Note
the project activity and the intention to seek CDM
status to UNFCCC
September 2011 EPC Contract signed EPC Contract
October 2011 Construction Start Date
The validation team has validated the project activity start date as per following table:
Starting Justification of and evidences Date of Intimation Justification of and

date of (references) on the starting date of to UNFCCC / Host evidences (references) on
project project Party DNA the starting date of project
18/03/2011 Date of contract Signed with Siemens 06/05/2011 Intimation to UNFCCC for
for supply of Steam Turbine. It is the prior consideration
earliest date at which real action of the notification is within 6
27

VALIDATION REPORT
project activity begun. The validation month which is in line

team validated the same from the with the requirement as
document herein the PP had signed a stipulated in para 2 of
supply contract for the Steam Turbine to Guidance on the
be used to convert Single cycle power demonstration and
plant too combined cycle power plant. assessment of prior
Hence the validation Team concludes consideration Ver. -03 of
that the start date is in accordance with the CDM of EB 62 Annex
the definition in Glossary of CDM 13.
terms and CDM VVS (112) and in
accordance with Annex 13 of EB-62.
From above table, the validation team was able to verify that the start date of the Project
determined, as 18/03/2011 is appropriate, however it is evidenced from the
Chronological events that the Project implementation is started much earlier than the
Prior Consideration letter date, hence CL12 was issued to seek clarification from PP in
what circumstances proposed CDM project is complying with the EB guidelines for prior
consideration.
As per the response to this CL PP has revised the Prior consideration Table in PDD
section B.5 and explained that all activities before the start date are preliminary
activities such as obtaining Government permits, seeking bank offers for debt financing
etc. However, these actions did not constitute an irrevocable commitment on the part of
the project owner to proceed with the project because no significant financial investment
was made. As per the CDM Glossary of Terms version 5.0, Minor pre-project
expenses, e.g. the contracting of services /payment of fees for feasibility studies or
preliminary surveys, should not be considered in the determination of the start date as
they do not necessarily indicate the commencement of implementation of the project
Therefore, the preliminary works carried out prior to the project start date need not be
considered in the determination of project start date and hence the CL 12 is closed.
The Project is a new project according to the definition in the Guidance on the
demonstration and assessment of prior consideration of the CDM version 03 (Annex
13, EB 62, 15/07/2011), (hereinafter called Guidance-Prior Consideration), i.e. the
start date of the Project is after 02/08/2008. The start date of the Project is also prior to
the date of publication of the PDD for global stakeholder consultation, which is from 16
November 2011 to 17 December 2011, and the validation team has assessed the PPs
prior consideration of the CDM through documents reviewed summarized as below:
The PP informed Indonesian DNA in writing of intention to seek CDM status on 12th
May 2011. This was verified by reviewing the email communications with a Secretariat
Member of National Committee on CDM (Designated National Authority DNA for the
Republic of Indonesia) on Prior consideration letter submission dated 12th May 2011.
The PP informed UNFCCC secretariat in writing of the Prior consideration of the CDM
for proposed project activity and the same has been reviewed from the UNFCCC
website, which shows received date as 06/05/2011. The Validation team also confirmed
that the project activity is listed in the UNFCCC secretariats publicly available list of
such notifications
Hence, it is established that the PP has intimated the UNFCCC and Indonesian DNA
within six months from the start date of the Project.
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VALIDATION REPORT
Hence the validation team concludes that in accordance with 2 of Annex 13 of EB 62,
CDM was seriously considered while making the investment decision for the project
activity.
Based on the above assessment, the validation team hereby confirms that the CDM
benefits were considered necessary in the decision to undertake the project as a
proposed CDM project activity. Thus the proposed CDM project activity complies with
the requirements of the latest version of the Guidance on prior consideration.
3.9.1.1 Historical information on project timeline

The project start date is 18th March 2011 and as per EB 62 Annex 13, it falls under the
category of new project activities. Hence, historical information on project timeline with
respect to any real action prior to start date of project activity is not applicable. A
manufacturing slot reservation agreement was signed with Steam Turbine Manufacturer
Siemens Turbo machinery SRO Dtd. 24th November 2010 on receipt of the Quotation
and subsequently PP has signed a supply Contract with the Manufacturer of steam
turbine on 18th March 2011.
3.9.2 Identification of alternatives (116)

Approved methodology ACM 0007 Version 06.1.0, provides procedure on selection of
the baseline scenario and the demonstration of additionality. In line with the prescribed
procedure PP has utilized latest approved version tool Combined tool to identify the
baseline scenario and demonstrate additionality and demonstrated step by step
approach in identifying alternatives in PDD section B.4, which validation team considers
correct. Detailed validation conclusion is presented in the section 3.6.3 of this Validation
Report.
Based on the outcome of the identification of alternatives PP has performed Barrier

Analysis to identify barriers that would prevent the implementation of alternative
scenarios. As a result of barrier analysis it is confirmed that Alternatives 1 & 2 faces
only Investment Barrier, and hence PP has used Investment Barrier to demonstrate
additionality.
.
3.9.3 Investment analysis (123)
Since the project activity generates revenues by the sale of electricity generated other
than CDM revenue, simple cost analysis cannot be used. The PP has selected Post-tax
equity IRR as financial indicator for investment analysis and benchmark analysis to
demonstrate the additionality of the project activity.
Since the high investment by the PP behaves a commensurate return for the PP, the
validation team concluded that the financial indicator selected is appropriate for the
project type and decision making context. Therefore, the selected financial indicator is in
conformity with the Guidelines on Investment Analysis.
From the outcome of Step 1.a of Combined tool to identify the baseline scenario and
demonstrate additionality, the alternative scenarios remaining after Step 2 are
Alternative (1) and Alternative (2). Since one of the alternatives, Alternative (2), is the
29

VALIDATION REPORT
continuation of current practice that does not require any investment, it is not possible to
conduct an investment comparison analysis. Therefore, benchmark analysis is
conducted in order to evaluate the financial attractiveness of Alternative (1), the
proposed project activity without being registered as a CDM project activity.
Hence, the validation team has concluded that the Benchmark Analysis is selected by
the project participant is the most appropriate method of demonstrating the additionality
of the project activity and is also in conformity with the Guidance ( 19) of Annex 05 of
EB 62.
Investment Analysis: Input Parameters

Before reviewing the E-IRR calculation, the validation team validated the basic
parameters listed in the web hosted PDD in accordance with Para 122 of VVS. The
validation team noted that the input values used for all the investment analysis are not
taken at the time of investment decision as project participant has calculated the Equity
IRR on actual project cost. While reviewing the webhosted PDD and investment
analysis calculations it was observed that there is no clear information on the time of
investment decision. It was also noted that PLF selected for the project IRR is not in line
with applicable EB guidance for PLF. In this regard, the CAR-02 and CAR-09 was
raised. PP has subsequently corrected PDD and investment analysis to address these
two CARs, Responses found adequate and hence these Cars were closed by the
validation team.
All input data and assumptions used in E-IRR computation have been checked against
the evidences provided by the PP, published information available, Indonesian Taxation
Law and the standard accounting principle. The detailed assessment incorporating the
means of validation is provided below.
P a r am et er V al u e So ur c e o f val u e V ali d a ti on ju s t i fi ca t io n
u se d
Contracted 110 Draft Agreement for increased Verified the Draft PPA However the PPA
Capacity of installed capacity of power plant has not having relevant authorization, it
Combined from 80 MW (As per PPA dtd is showing draft status.
cycle power 04 January 2007) to 110 MW.
plant (MW)
Plant Load 85% PPA signed with PT PLN. CAR 02 raised during site visit is closed
Factor based on the evidence provided and
(AFEA) explained in the response.
Net Electricity 258,420 PPA Document, Calculated Value from the Investment
Generation Power invoices of PLN during Analysis spread sheet and CER Spread
(MWh/Yr) baseline scenario, sheets. Inputs for calculation are
Installed capacity of the Baseline Electricity Generation qty. (from
Combined cycle power plant the Power bills of PLN and annual
and CER spread sheets. operational reports for last three years.
and estimated electricity generation in
project scenario based on the
Contracted capacity of the Combined
cycle plant.
Total Capex 54,405,543 - EPC Proposal initially This was further tallied using the EPC
(USD) submitted by the contractor Proposal first submitted in October
Dtd.in October 2010. 2010./Ref-6d/ and Revised Proposal
30

VALIDATION REPORT
- Revised Proposal Dated Dtd. 27/03/2011 /Ref-22/

27/03/2011. Verified Detail break up cost provided
- Investment Decision, and the utilizing EPC Proposal initially submitted
Spread sheet BC-EON- by the EPC contractor, Contract for
CCGT-CAPEX for detailed Mechanical, electrical equipments and
break-up of the CAPEX spares supply signed with contractor PT
Satyamitra Surya Perkasa Dtd.
14/09/20011 /Ref-23/
Quotations of each and every
component verified and found the cost is
realistic, except civil work as it is a lump
sump cost.
Although there are some revisions in the
EPC proposal since first submission in
October 2010, these revisions are limited
to the terms and conditions and some
technical specification. The cost of
Proposal found unchanged and hence
validation team confirm that the
calculation of CAPEX as demonstrated
in the Excel sheet is accurate based on
the relevant evidences validated during
validation. Hence the Capex value
considered by the PP was available with
PP at the time of investment decision.
Equity 9,40,543 BC-EON-CAPEX-Details Jan Verified Detail break up cost provided
Investment 26 utilizing
(in USD) EPC Contract for Mechanical, electrical
and spares supply.
Quotations of each and every
component verified and found the cost is
realistic, except civil work as it is a lump
sump cost.
Bank Loan 45,000,000 Bank Mandate Letter Dated Found Satisfactory as per the Bank
(USD) 14th December 2009 Mandate Letter Dtd. 14th December
2009.
Nominal 8 Refer page 14/22 of SD_24, the The interest rate is sourced from the
Interest Rate structured repayment of publicly available source (at the time of
(%) principal sum is tabulated. The decision making), The validation team
Term period of the loan is noted that the interest rate during the
actually 8 years, including time of decision-making is 8%. Which is
grace period of 2 years confirmed using bank mandate letter for
(Tranche B). This is expressed loan (Loan Sanction Document)
as 6 years Loan period in the
data input sheet. PP has Applied 6.53 as real interest rate
after deducting the inflation rate of 1.48%
The inflation value is deducted as per the WORLD ECONOMIC
from the nominal interest rate OUTLOOK REPORT Published by IMF
given by the bank so as to in April 2011. Which is slightly later than
obtain the real interest rate. The the investment decision.
real interest rate is used for However the inflation rate if calculated
calculating interest. Since the based on the published values of 2010
currency of the loan is USD, will not be conservative.
interest rate of United States is
applied. Referring to page
Applied Real 205/241 of SD51, the inflation
Interest Rate 6.53 rates given for United States
31

VALIDATION REPORT
(After are: 2010: 1.2%, 2011: 2.1%,

deduction of 2012: 1.1%, 2016: 1.5%. The
Inflation rate average value of 1.475% is
on USD) (%) taken as inflation.
Debt to 82.7 Calculated Based on the Equity Based on the publicly available data
Equity Ratio invested by the Meppogen and prevailing Debt to equity ratio in
(%) the Bank loan drawn for the Indonesia is 3 or 4 to 1, which is
project implementation commonly used across Indonesia
(Report on Investing in Indonesia, An
Introduction for Investor By Oentoeng
Suria & Partner)
Based on the Calculation Debt to equity
ratio for this project is 0.827 which is well
within the national prevailing rate.
Hence a D/E ratio of 82.7 % is

acceptable to the validation team. Hence
the validation team concluded that the
value is accurate and suitable.
Electricity 0.058 Draft-amendment-of-PPA- The tariff has been calculated based on
Tariff APPENDIX P1-electricity-price the formula given in the appendix G1 of
(USD/KWh) document SD10a /Ref-15/ for Baseline and SD10
- Letter of intent Dtd 7th b&c /Ref-16/ for Project Scenario. In line
September 2010 for the with 121 of VVS ver. 3, The applicable
Base Tariff (Surat No. tariff has been further corroborated from
02428/122/DIRDANS/1 the Power Purchase Agreement entered
0) /Ref-16/ between the project participant and
buyer i.e. PLN.
Estimated Tariff for electricity generated

by CCGT used in the financial analysis
(at 0.058 USD/kWh) is based on the
power purchase agreement (PPA) signed
by on 04th May 2007 with PLN (for
existing open cycle Power Plant) /Ref -
15/ and an Amended PPA for the
Combined cycle power Plant (Project
scenario)/Ref-16/. The Amended PPA is
based on the original PPA and the new
technical specifications of the CCGT
Project, including the power generating
capacity of 110 MW. Although the tariff
is not yet finalized between PP and PLN
the calculation is done using parameters
provided in the original and Amended
PPA. Although the new terms for the
CCGT as provided in the Amended PPA
were not yet finalised at the time of the
investment decision, the Amended PPA
is based on the calculations and formula
in the original PPA. At the time of the
investment decision, the new Amended
PPA was not available and so the
detailed new tariff was not available. At
the time of the investment decision, a
Letter of Intent (LOI) had been provided
to the PP from PLN which contained an
32

VALIDATION REPORT
indicative tariff for the CCGT. The tariff

indicated in the LOI is lower than the
tariff calculated using the original and
Amended PPA. In the financial analysis,
the PP has used the higher tariff
calculated from the original and
Amended PPAs as this allows greater
detail and consistency between the
baseline and project calculations. The
DOE considered this to be appropriate as
it allowed greater detail and consistency
and is conservative from the perspective
of the IRR analysis as it over-estimates
electricity revenue from the project and
thus the IRR.
This is found presented in the IRR

Calculation spread sheet transparently
using the detailed calculations provided
in the draft PPA by PLN (Power authority
in host Country).
The Calculated Power tariff was further

cross checked with the tariff considered
by the registered CDM Project Ref No.
5506 i.e. 498 IDR/KWh (0.056
USD/KWh) (Registration Date March
2012)
Hence the validation team concluded

that the value applied is accurate and
suitable.
Quantity of 1,137,565 Calculated value based on Baseline Gas consumption figures are
Gas Baseline Gas consumption data provided transparently through the Gas
Consumption and estimated Gas bills of MEDCO (Gas suppliers) verified
(mmBTU) consumption during project Gas bill summary and gas bills for the
scenario. last three years, monthly bills and
metering reports are maintained by the
PP at site. These historical records are
used to calculate the baseline gas
consumption, in accordance with the
Methodology.
Project scenario gas consumption can
be estimated in two ways: (i) based on
the formulae and estimates in the PPAs
and (ii) based on detailed EPC
estimates. The first method is used to
calculate gas consumption for the IRR
analysis, as the PPAs were available at
the time of the investment decision. This
method is also conservative from the
perspective of the IRR analysis (as this
slightly under-estimates additional gas
consumed by the project and thus over-
estimates the IRR). The second method
is based on detailed estimates of gas
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VALIDATION REPORT
consumption by the turbines and the

duct burners, as provided in the EPC
documents. The EPC documents were
not available at the time of the
investment decision so are not used in
the financial analysis. However, the
EPC documents are considered more
technically accurate and so are used to
estimate project gas consumption for the
purpose of ER calculations. The two
methods provide very similar results. .
This value is verified using the Emission
Reduction Spread sheet where detailed
calculation of gas consumption is
provided and is found in accordance with
the specification of Turbine and HRSG
provided by the Supplier.
The detailed validation of this approach
is provided in this report section 3.8.4
above.
Gas Price 5.2 Additional Gas Price MEDCO 5.2 USD/mmBTU is the gas price as
(USD/mmBT MEPPOGEN stated for additional gas for the CCGT
U) project in the MEDCO proposal Dtd. 21st
December 2010/Ref-19/. While this
document is dated about one month after
the investment decision, the PP
explained that the document was
preceded by negotiations and
discussions with MEDCO over the
previous few months and so this
information about the estimated gas
price was known by the PP at the time of
the investment decision. Based on
industry and process knowledge, the
DOE considered this explanation to be
reasonable and plausible.
This was further cross checked using
publically available information regarding
prevailing gas price in Indonesia from
Platts web site /Ref-43/ and Market
prices based on PGN presentation to
investors /Ref44/.
A press release on web site shows that

historical domestic price of Natural gas in
Indonesia is in the range of 1.2
US$/mmbtu 6 US$/ mmbtu, but closer
to 6 US$ in recent years. Hence the
Price of natural gas considered by PP for
investment analysis is real and
applicable at the time of investment
decision.
This was further cross referred using

third party report available publically on
retrospective Gas prices /Ref45/ and
found that the cost estimated by the PP
34

VALIDATION REPORT
using the/Ref-50/ is found conservative.

O&M 4,480,000 Gas-Fired-Power-Plant-Study The O & M cost considered by the
Expenses (ETSAP study (SD40) for Gas project participant in the investment
(USD) fired Power plants available analysis is based on ETSAP study
publicly at IEA ETSAP - (SD40) for Gas fired Power plants
Technology Brief E02 April available publicly at IEA ETSAP -
2010 (www.etsap.org)., the Technology Brief E02 April 2010
Table 2 Summary Table: Key (www.etsap.org)., the Table 2
Data and Figures for Natural Summary Table: Key Data and Figures
Gas-based Power for Natural Gas-based Power
Technologies) Technologies on page 4 lists O&M cost
(fixed and variable) as 36$/kW/a for
OCGT plants and 44$/kW/a for CCGT
plants. In line with para 121 of VVS ver
3. Hence the validation team concluded
that the value used are from third party
issued publically available information
which are widely accepted, hence
validation team considers these values
conservative and applicable for the
project
Depreciation 12.5% Indonesian Pocket Tax Book It has been validated using Indonesian
/ Salvage 2011 (Page 42, Para 3) Pocket Tax Book. PP has selected the
Value Indonesia Pocket Tax Book depreciation Value of 12.5% as per
2010 (Page 43/ Para 3) category 3, using declining balance
approach for the assets with a beneficial
life of 14 years, which is conservative
and in accordance with Para 4 of
Guidelines on Investment Analysis.
Hence the validation team concluded
that the value applied is accurate and
appropriate.
Value 1251043.1 Debit Note from PT. Satyamitra According to Article 4 the Law Number
Addition Tax 4 Surya Prakasa Ref: 18 of the year of 2000, applicable Value
(VAT) on SSP/1497/XI/2011Dtd Addition Tax rate in Indonesia is 0 - 10%
EPC contract 07/11/2011 (Evidence) and the VAT considered by the PP for
(USD) EPC contract is 2.2%, which is found in
line with local financial regulation. The
Vat applicable is found in accordance
with the host country financial regulation
which was prevailing at the time of
Investment decision and hence the
calculations provided by PP in the
financial Analysis is Correct. Validation
team confirmed the Calculated Tax using
the evidence i.e. Debit note Submitted by
PT. Satyamitra Surya Prakasa, which
was available at the time of Validation
visit.
Specific Heat 9876 Present PPA Agreement with The BTU/KWh values mentioned in the
Rate applied PT PLN Dated 04 May tariff calculation are Specific Heat Rate
for Baseline 2007/Ref-15/. available at the calculated by PP based on the PPA
Scenario time of investment decision. conditions. PP has used PPA information
GT to arrive at the Weighted Average
Operations Specific Heat Rate i.e. Schedule for
(BTU/KWh) partial Heat Rates, for baseline scenario
(considering 80% Loading Rate)
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VALIDATION REPORT
The heat rate for the baseline scenario

as applied in the calculations is
consistent with the load factor (% of
Load) in the baseline scenario (i.e. of the
single cycle plant), which was 80%.
Thus 9876 BTU/Kwhr is the correct
figure for the baseline in the case of this
power plant. This is input in Cell I30 of
the Tariff Parameters worksheet in the
Additionality Spread sheet.
The value 9681 BTU/KWh for the

baseline scenario is obtained from the
commercially agreed document i.e.
Singed PPA Dtd. 4th May 2007 and
hence it is considered appropriate.
Specific Heat 8235 Draft PPA Agreement issued by The BTU/KWh values mentioned in the
Rate applied the PT PLN /Ref-16/ available Tariff Calculation are Specific Heat Rate
for Project at the time of Investment calculated by PP based on the PPA
Scenario decision. conditions. PP has used PPA information
CCGT to arrive at the Weighted Average
Operations Specific Heat Rate i.e. Schedule for
(BTU/KWh) partial Heat Rates, for project scenario
(considering 85% loading rate).
The heat rate for the Project scenario as

applied in the calculations is consistent
with the load factor (% of Load) in the
Project scenario (i.e. of the Combined
cycle plant), which is estimated as 85%.
Thus 8235 BTU/Kwh is the correct figure
for this proposed project activity. This is
input in Cell C30 of the Tariff
Parameters worksheet in the
Additionality Spread sheet. The
equivalent number for the CCGT was
taken from Appendix G of the Amended
PPA /Ref-16/.
For the Project Scenario PP has

considered value of 8235 BTU/KWh, and
this value is also found provided in the
Draft PPA /Ref-16/.
Investment analysis: Calculation and conclusion

The validation team has verified the assumptions as explained above and observed that
they are correct and based on conservative values that are applicable at the time of
investment decision making.
The arithmetical accuracy was also found to be correct. The E-IRR calculations have
been provided in a transparent spread sheet and verified by the validation team and
appointed third party financial expert. Post Tax E-IRR has been computed for 16(14
years of operations + 2 Years of construction) years of operations, which is the lifetime
of the project and is in conformity with the guidance issued by CDM EB vide Annex 05
of EB 62. As required by Annex 05 of EB 62 the expected profit on the sale of assets at
the end of the operating life has been taken as salvage value in the terminal year. The
36

VALIDATION REPORT
project developer has taken into account profit before tax, depreciation value (in the
terminal year) in the computation of E-IRR. The principle adopted in making projections
and computing post tax E-IRR conforms to the accepted and standard accounting and
taxation principles. An independent financial expert has verified the IRR calculations
and observed them to be in order.
In the above background, the validation team concludes that underlying assumptions
are appropriate, accounting principles adopted in calculations and calculations per se
are correct and the guidance vide paragraph 117 - 121 of the VVS has been taken care
of. Based on the above, the Post Tax E-IRR works out to 9.5%.
Benchmark:
The project participant has chosen Default value for the expected return on equity as
per the Annex A of EB 62 Annex 05. The default value selected by Project participant is
12.5% under Group 1 for host country Indonesia. This value is classified under Ba2
category of Moodys Risk Rating for bonds.
The selection of default value is appropriate as there is no external funding is utilized for
this project, project participant has utilized internal equity and loan from Bank to finance
the project.
Hence the validation team was of the view that the expected return of 12.5% from the
project was commensurate with the risk involved in the Group 1 project activity. Thus,
the benchmark determined for the project activity (12.5%) was found in line with VVS
version 3 Para 121 and EB 62 Annex 05..
The E-IRR was calculated based on the above input values and it is less than default
benchmark return value of 12.5%. This clearly shows that the project is not financially
feasible without financial incentive in term of CDM revenue.
The validation team noted that with CDM revenues, the E-IRR improves to meet the
benchmark return. Hence the validation team concludes that it is critical for the project
activity to get the CDM revenue in order to make the project financially feasible.
Sensitivity Analysis:
In order to demonstrate the robustness of the conclusion arrived at above, viz., that the
project is additional, the PP had subjected the five critical parameters of the project
activity i.e. Tariff, Load Factor (AFEA), Capital Expenditure (Cap-Ex), O&M Expenses
and Gas price to reasonable variations. It has been noted that the above five
parameters are the only factors, which are likely to affect the E-IRR significantly
because of their variation.
The Load Factor was arrived using calculations done internally based on the PPA
conditions and electricity generation records, however as per EB 48 Annex 11,
validation of PLF can be done using two options
(a)The plant load factor provided to banks and/or equity financiers while applying the
project activity for project financing, or to the government while applying the project
activity for implementation approval;
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VALIDATION REPORT
(b) The plant load factor determined by a third party contracted by the project
participants (e.g. an engineering company); Hence the note provided as SD45- PLF
Justification is not accepted, CAR 02 was raised and submitted. Subsequently PP
provided response to the CAR 02 and explained that the PLF utilized for calculation of
emission reductions and investment analysis is taken from the PPA signed with PT.
PLN, hence the CAR 02 is closed.
O & M cost is arrived at using default values provided by the PP are based on ETSAP
study for Gas fired Power plants available publicly at IEA ETSAP - Technology Brief
E02 April 2010 (www.etsap.org).
The PP has subjected the Tariff, Load Factor (AFEA), Capital Expenditure (Cap-Ex),
O&M Expenses and Gas price to +/-10% variation and has presented the calculations.
In the web hosted PDD. The project cost, at the time of investment decision itself, is a
negotiated cost compared to the project cost specify in the proposal provided by the
technology supplier and represents the actual project cost (this was also validated from
purchase orders). Hence, the project cost available at the time of investment decision is
already actual project cost and any variation in the project cost is not applicable (as the
project is already implemented).
Similarly the tariff considered for the project lifetime is the prevailing rate in the region of
Host country Indonesia at the time of decision-making and is verified through the Draft
PPA Agreement (Appendix G for tariff calculation) and is noted that it is fixed for 20
years, so the variation in tariff is highly unlikely.
Other parameters like Interest rate, D/E ratio do not contribute 20% of project cost or
revenues from project and hence not subjected to sensitivity analysis.The results of the
sensitivity analysis are as follows:
Variation
Parameters Bench Mark
-10% -5% 00% +5% +10%
Tariff 1.65% 5.48% 9.50% 13.74% 18.14%
Plant Load Factor 12.5% 21.64% 14.98% 9.50% 2.40% -0.77%
Cap-Ex 17.82% 12.50% 9.50% 7.42% 5.84%
O&M 10.60% 10.05% 9.50% 8.95% 8.42%
Gas Price 12.82% 11.15% 9.50% 7.88% 6.30%
NOTE: Threshold Values below indicate the percentage of existing value at which
calculated IRR reaches benchmark value
-10.00% -5.00% 0.00% 5.00% 10.00% Threshold

Tariff 1.65% 5.48% 9.50% 13.74% 18.14% 104%
Plant Load Factor 21.64% 14.98% 9.50% 2.40% -0.77% 97%
Cap-Ex 17.82% 12.50% 9.50% 7.42% 5.84% 95%
O&M 10.60% 10.05% 9.50% 8.95% 8.42% 72%
Gas Price 12.82% 11.15% 9.50% 7.88% 6.30% 90%
NOTE: Threshold Values below indicate the exact value of corresponding parameter at
which calculated IRR reaches benchmark value
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VALIDATION REPORT
-10.00% -5.00% 0.00% 5.00% 10.00% Threshold

Tariff 0.052 0.055 0.058 0.061 0.064 0.060
Plant Load Factor 76.5% 80.8% 85.0% 89.3% 93.5% 82.5%
Cap-Ex 48,964,989 51,685,266 54,405,543 57,125,820 59,846,097 51,685,266
O&M 1,764,000 1,862,000 1,960,000 2,058,000 2,156,000 1,411,200
Gas Price 4.68 4.94 5.20 5.46 5.72 4.68
The above mentioned E-IRRs reveals that the E-IRR do not cross benchmark of
12.5% with the sensitivity of +5 % on Load Factor. However, with further decrease in
Load factor below 82.5%, the E-IRR crosses the Benchmark value. The validation team
thoroughly reviewed the probability of occurrence for decrease in the load factor below
82.5%. Actual generation for the year 2008-10 for base line single cycle power plant
were verified and found the actual achieved Load Factor is in the range of 84-87%.
The actual Load Factor achieved for the 3 consecutive year resemble to the base
case Load factor of 85% , Which is attained using power purchase agreement
established with PT. PLN.
In the case of tariff, beyond an increase of 5%, the E-IRR crosses benchmark value.
However it is highly unlikely as PPA agreement with PLN clearly states that the
Power purchase agreement will be for a fixed period of 20 years. Validation team
has further verified the PPA between PT. PLN and PT Metaepsi Pejebe Power
Generation (Meppogen) and found that the preferential fixed tariff of 0.058/ KWh is
applicable for the entire 20 year period. Hence, even if there are amendments in the
power purchase tariff from the PLN, the amended price will not be available to the
project participant. Hence, based on this evidence, the sensitivity analysis on the tariff
was accepted by the validation team which is in compliance Para 20 &21 of EB 62
Annex 05
Similarly for project cost, variation of -10 % is highly unlikely as the price quoted
in the Board note minutes is less than the initial offer price by all suppliers for project
components. The investment analysis considers the final negotiated price 54,405,543
USD of (which was available to the PP at the time of investment decision). Validation
team further verified the same with the actual purchase order values raised by the
PP. Hence it is highly unlikely to have any reduction in the Cap-Ex (as the project
is already started and is in construction phase and actual project cost is taken in the
investment analysis), so the project IRR crossing the bench mark is unrealistic. Thus
sensitivity of project cost has been validated in compliance to Para 20 &21 of EB 62
Annex 05.
Subjecting the O& M to +/-10 % variation reveals the project IRR do not cross the
bench mark , hence no probability of occurrences conducted as per Para 21 of EB
62 Annex 05.
Gas price has to decrease by 10% for the project to be financially viable. The gas price
is assumed to be (5.20USD/mmBtu) in the IRR calculation. This in line with market
prices based on PGN presentation to investors /Ref-44/ /Ref-43/ & /Ref-45/. The market
expects the gas price to increase in the future, but this increase has not been taken into
account for the IRR calculation for conservative reasons.
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VALIDATION REPORT
The validation team also verified the assumption values with the actual values of the
term loan and debt equity ratio. It was observed that the actual term loan sanctioned by
the bank is on 8 % interest rate which is confirmed using bank mandate letter for loan
(Loan Sanction Document). This is considered as nominal interest rate and PP has
Applied 6.53 as real interest rate after deducting the inflation rate of 1.48% as per the
WORLD ECONOMIC OUTLOOK REPORT Published by IMF in September 2011, as
the loan amount sanction is in USD.
Hence, the Equity IRR (Post tax), after applying the actual values applicable after
commissioning such as Tariff, Plant Load Factor (AFEA), Capital Expenditure (Cap-Ex),
O&M Expenses and Gas price also remain under the benchmark value of 12.5%.
Further, the validation team would like to state that the post-tax equity IRR computed by
the project participant are based on the very conservative computation approach has
been adopted in the cash flows. The investment analysis applied by the project
participant has also been validated by an independent financial expert. In the above
background, validation team concurs with the PP that the project activity is financially
not viable without the benefits from CDM. IRR with CDM revenues worked out to be
16.63%. Hence the IRR with CDM revenues crosses the benchmark. Thus the project is
viable with CDM revenues. Validation team is, therefore, convinced that the project is
additional.
3.9.4 Barrier analysis (127)

As described above in section 3.7.3 of this report, project participant has demonstrated
additionality on investment barrier in accordance with Combined Tool to identify the
baseline scenario and demonstrate additionality
PP has identified Investment barrier as one of the barrier which described in detail in
section 3.7.3 of this validation report.
3.9.5 Common practice analysis (130)

As per the requirement of approved methodology ACM 0007, Version 6.1.0 and
Combined tool to identify the baseline scenario and demonstrate additionality Common
practice analysis is mandatory to be performed to demonstrate additionality of the
project.
In line with requirement of methodological conditions PP has performed common

practice analysis and the same is demonstrated in the tabular form in PDD section B.5
Validation team has validated the common practice analysis and the conclusion is given
as below
From the common practice analysis presented in the PDD it is evidenced that PP has
considered similar activities to the project activity to perform common practice analysis.
PP has utilized World electric Power plants Data base from PLATTS and identified
single and combined cycle gas fired power plants in Indonesia with comparable installed
capacity in the range of 55 165 MW using same fossil fuel i.e. Natural Gas. There
were 19 power plants identified by PP which are in operation in Host country. Input data
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VALIDATION REPORT
source verified by visiting the web site and found authentic, hence Validation Team
confirms that the input data selection is in line with the requirement of methodological
condition.
PP has identified all 19 power plant located in the same host country i.e. Indonesia
hence it is confirmed that all plants are within the relevant geographical area and there
is no variations in the framework conditions prevails in the geographical area, hence this
methodological condition is also fulfilled.
From the data made available during validation it was concluded that there are totally
Fifty four (54) number of natural gas fired power plant are currently in operation in Host
country in different states and 19 amongst them are of comparable capacity i.e.
between 55- 165 MW. Out of these 19 Power plants of comparable capacity, only 04
are working in combined cycle mode, which is contributing to 21%. As per the
methodological condition the project activity will be regarded as Common practice if
more than 50% of the assessed power plants operate in combined cycle mode, hence
based on the study result the project activity is not a common practice and it is
additional.
The validation team hereby confirms that the proposed CDM project activity is not
common practice.
3.10 Monitoring plan (133)

The validation team hereby confirms that the monitoring plan complies with the
requirements of the methodology. The steps taken to assess whether the monitoring
arrangements described in the monitoring plan are feasible within the project design are
described below.
- According to the methodology, monitoring shall consist of metering the net

electricity generated by the combined cycle power plant. The PP has mentioned
the monitored parameters in section B.7.1. Net electricity generation supplied by
the project activity to the grid as the parameters that are monitored Ex-post. Net
Electricity exported to the grid shall be monitored and cross checked with
reference meters at the PLN Substation located at the site.
- FCi.y is the measured quantity of natural gas consumed by the project activity
which is monitored Ex Post using calibrated metering system installed at Gas
receiving station managed by MEDCO (Gas supplier) The quantity of natural gas
consumed will be measured using a gas flow meter which will be calibrated by
the gas supply company (Medco), in accordance with national standards.
- pj.y Efficiency of the combined cycle power plant, is a calculated value using
direct method i.e. A calculation based on the energy of total electricity generated
divided by the total amount of gas energy used by the power plant during a given
time period (i.e. one year).
- NCVi.y is the Parameter, which will be monitored Ex post based on the monthly
natural gas consumption quantity as per the invoices submitted by the Natural
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VALIDATION REPORT
gas supplier. It is derived from Weighted average annual values of Net Calorific
Value of Natural gas which provided by the supplier through monthly gas
invoices. This is found in accordance with the Option (a) of Data Source
mentioned in the Section III of Approved methodology for the same parameter.
NCV is derived from the GCV which is monitored and reported on the gas
invoices by the gas supply company (i.e. not measured or calculated by the
PP)Project participant has provided a systematic mechanism for archiving
electronic and hard form of all the monitored data. This is stated transparently in
section B.7.2 of the revised PDD.
Project participant has made a provision of retention for project relevant monitoring data
for keeping the data for 2 years after the end of the last crediting period.
The monitoring plan includes requirements for meter testing and calibration. The meters
used for monthly joint meter recording are tested and calibrated by the authorized
agency of the state electricity Board.
During validation it was observed that PDD section B.6.2 is providing information on the
data and parameters available at validation, however the data and parameters
presented in this section are found wrongly addressed i.e. EGOCH , FCNG.OCH as
well it was seen that there are various data parameters used by PP to arrive at emission
calculations are not found described in section B.7.1 e.g. EFupstream.CH4, EFCO2
Max, CAPmax, Tmax, QHRx, HMRy etc. which is also required by the approved
methodology, hence CAR 08 was raised and issued.
The validation team has reviewed the revised PDD and confirms that the QA / QC
procedures described in section B.7.1 are adequate and satisfactory. The validation
team has cross checked the accuracy class and type of meter during the onsite visit and
finds the description as correct. The responsibility of meter reading is jointly held by the
PT Metaepsi Pejebe Power Generation (Meppogen) and the representatives of PLN
and the responsibility of meter accuracy testing and calibration is with the Meppogen.
The meters are calibrated annually. The validation team hereby confirms that the
monitoring plan complies with the requirements of the applied methodology.
The validation team hereby confirms that the project participants are able to implement
the monitoring plan.
3.11 Environmental Impacts (137)

According to the ministerial decree 17/2001, Complete EIA process is not required for
the power plant with a capacity less than 100 MW, The open cycle plant operating in
baseline situation does not required the EIA to be conducted.
PP has done the EIA process in December 2009 as a part of obtaining operating
license. The EIA was conducted based on the AMDAL Regulation 2006. It was
noticed that during EIA there is no significant environmental impacts identified due to
implementation of the project activity. However PP has arrived at a comprehensive
Environmental Management plan for various stages of project implementation.
Monitoring, measurement and reporting mechanism is found in line with the regulatory
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VALIDATION REPORT
requirements. Physical mitigation controls were verified and found satisfactorily

implemented on site for Construction phase of project activity.
Necessary permits to start the project has been obtained by the PP and and were
verified during site visit by the local legal expert, who was the part of Validation team.
Hence the validation team confirms that the project complies with the environmental
regulations of Host Country i.e. Indonesia.
3.12 Local stakeholder consultation (140)

The comments are invited from local stakeholders like local villagers, representatives of
local legislative body, government agencies and journalists to provide their general
feedback on the project activity including its effect on the environment and its socio-
economic effect. The validation team noted that all the relevant stakeholders were
identified and invited.
The PP have utilized appropriate media to invite these stakeholders. The PP had invited
the stakeholders on 23/09/2011 by Invitation Letter No. 4.014/L/GM/GMR/UND/IX/2011.
The validation team have verified the related documents and found it acceptable. Also,
the date of invitation to the meeting is prior to the publication of the PDD on the
UNFCCC website i.e., From 17 November 2011 16 December 2011.
The project participant has made a presentation of the project activity to the participants
of the Local Stakeholders during Local stakeholders consultation meeting on
27/09/2011, in unbiased manner. During meeting, the PP invited comments of the
stakeholders on the project. The project has not received any adverse comments. The
validation team has checked the summary of comments received during the meeting
and it has verified the same by way of interviews with some local stakeholders during
the site visit.
The validation team hereby confirms that the process of local stakeholder consultation
is observed to be adequate.
4 COMMENTS BY PARTIES, STAKEHOLDERS AND NGOS

The PDD using methodology ACM - 0007 Version 6.1.0 was webhosted on the
UNFCCC for global stakeholders comments as per CDM requirements. The project was
webhosted from 17/11/2011 to 16/12/2011. During this period no comments were
received from global stake holders.
5 VALIDATION OPINION
Bureau Veritas Certification has performed a validation of the Gunung Megang Add-on
Combined Cycle Project Project in Indonesia . The validation was performed on the
basis of UNFCCC criteria and host country criteria and also on the criteria given to
provide for consistent project operations, monitoring and reporting.
The validation consisted of the following three phases: i) a desk review of the project
design and the baseline and monitoring plan; ii) follow-up interviews with project
stakeholders; iii) the resolution of outstanding issues and the issuance of the final
validation report and opinion.
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VALIDATION REPORT
Project participants used Combined tool to identify the baseline scenario and
demonstrate additionality,(Version 6.1.0), the latest tool for demonstration of the
additionality. In line with this tool, the PDD provides analysis of investment barrier and
Common practice analysis to determine that the project activity itself is not the baseline
scenario.
By synthetic description of the project, the project is likely to result in reductions of GHG
emissions partially. An analysis of the investment barrier and Common practice analysis
demonstrates that the proposed project activity is not a likely baseline scenario.
Emission reductions attributable to the project are hence additional to any that would
occur in the absence of the project activity. Given that the project is implemented and
maintained as designed, the project is likely to achieve the estimated amount of
emission reductions i.e. 106,172 tCO2 over selected fixed crediting period of 10 Years.
The review of the project design documentation (Version 1.0, Version 1.2 & Version 1.3)
and the subsequent follow-up interviews have provided Validation Team with sufficient
evidence to determine the fulfilment of stated criteria. In our opinion the project correctly
applies and meets the relevant UNFCCC requirements for the CDM and the relevant
host country criteria. Bureau Veritas Certification thus requests registration of Gunung
Megang Add-on Combined Cycle Project as CDM project activity.
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VALIDATION REPORT
6 REFERENCES
Category 1 Documents:
Documents provided by Type the name of the company that relate directly
to the GHG components of the project.
/1/ PDD [initially published version (web hosted)], Version- 1.0, Date- 11/11/2011
/2/ PDD Version 1.1 Date 15/03/2012
/3/ Letter of Approvals from parties involved in Project activity:
a. LOA from Host Party Indonesia (Vide Letter Ref : B082/KNMPB/06/2012,
Dated. 25/06/2012)
b. LOA from Annex I DNA i.e. The Netherlands (Vide Letter Ref: ANL2011-571,
Dated 02/04/2012).
/4/ Proof of Serious consideration of CDM (in accordance with the UNFCCC guidelines
provided in EB 62 ANNEX 13
a) UNFCCC CDM portal, Prior consideration notification indicating the date
received as 06/05/2011
b) Intimation to Indonesia DNA Letter dated 12/05/2011
/5/ Proof of the implementation timeline presented in the PDD in accordance with the
UNFCCC guidelines provided in EB 62 ANNEX 13
a) Manufacturing Slot Agreement with Manufacturer of Steam Turbine and
investment decision date.
b) Intimation to UNFCCC dated 06/05/2011 and intimation to Indonesian DNA
Dated 12/05/2011
c) Business license obtained for 230 MW combined cycle power plant
implementation Dated 09/02/2010
/6/ Evidences against all Techno-economic input data and assumptions used in Investment
analysis
a) Land Use Agreement with PT MEDCO E&P LEMATANG Dated 10/09/2009
b) Bank Approval with Terms and conditions for financing Dated 14/12/2009
c) Business license obtained for 230 MW combined cycle power plant
implementation Dated 09/02/2010
d) Proposal for the project activity from Satyamitra Surya Perkasa (SSP) and Black
& Veatch International (BVI) for EPC job dated 30/10/2010
e) Inception Report (Technical Feasibility Study Report)
/7/ Relevant proofs of local stakeholder consultation process
a) Intimation Letter dated: 23/09/2011b) MOM of Stake holder meeting & feedback
form dt: 27/09/2011
/8/ Annual reports of the Project Proponent
/9/ SD1: Turbine Gen Set Performance For PT. MetaEpsi Dated 01/03/2006 - issued by
GE for Baseline Gas turbines
/10/ SD3: EPC- Latest Depicting Selection of technology and plant configuration for
combined cycle plant performance.
/11/ SD4: Press Release on Indonesian Government Policy on Fast Track Phase 2 to open
energy sector for private energy producers Dated June 2011
/12/ SD7a SD7C: Annual Operational Report for year 2008 2010 for Baseline
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information
/13/ SD8: HRSG Specification Sheet
/14/ Proof of start date:18/03/201108(based on the purchase order issued by PP to purchase
Steam Turbines)
SD9: ST-Specification Sheet (Steam Turbine specification sheet Ref M-09.0369/
Dated 18/03/2011)
/15/ Proof of PLF Power purchase agreement with PT PLN
SD10a: Initial PPA signed between Meppogen and PLN (For Operation and purchase
of Power from Open Cycle power plant Baseline Scenario)
/16/ SD10b & c:
- Letter of intent (LOI) Dtd. 07th September 2010 (Surat No. 02428/122/DIRDANS/10)
- Draft PPA between Meppogen and PLN for power purchase from Combined cycle
power plant(Project Scenario)
/17/ SD11: LM6000 Specification Sheet Baseline Gas turbine for power generation in
Open cycle
/18/ SD12: Recommended scope of Material Inspection for Steam Turbine with Siemens.
/19/ SD15b: Gas supply contract document signed between Meppogen and Medco E&P
Indonesia (existing)
/20/ SD20: Prior Consideration Note Dated 06/05/2011
/21/ SD24: Bank Mandate Letter Dated 14/12/2009 for loan approval issued by BII (Ref No.
S2009/427/Dir.Corp- Corporate)
/22/ SD32a: Proposal for Gunung Megang CCCP Project (SSP/063/IV/11/Q) Dated
27/03/2011 submitted by PT Satyamitra Surya Perkasa.
/23/ SD32b: EPC Contract Signed between Meppogen and PT Satyamitra Surya Perkasa,
Dated 14/09/2011
/24/ SD33: Inception Report Internal Technical Feasibility Study for Meppogen
Combined Cycle Addition
/25/ SD38: Slot Reservation Agreement between Meppogen and Siemens for Manufacturing
of Steam Turbine, Dated 24/11/2010
/26/ SD39: Prior Consideration for Indonesia Project communication with Indonesian
DNA.
/27/ Spreadsheet for Annual electricity generation in Single Cycle and Combined Cycle
mode and consequently emission reduction
SD44: CER Spread Sheet
/28/ SD55: GE Commissioning Close out For Start Date of the baseline open cycle gas
turbines
/29/ SD56: Meppogen Plant History for maintenance history of Gas Turbines in
Baseline open cycle power plant.
/30/ SD57: Exclusive Service Agreement for open cycle gas turbines between Meppogen
and MTU Maintenance Berlin, Dated 06/06/2008
/31/ SD58: SOP for Gas turbine Operation & Maintenance developed by Meppogen, Dated
17/06/2009
/32/ SD59: MTU Maintenance Reports for Gas turbines During 2008 2009 period.
/33/ SD60: Sumatra Grid Power Generating Capacity Press release by Energy authority in
Host Country.
/34/ SD62: Gas Meter Readings for 2010 2011 for cross checking the gas consumption
in baseline.
/35/ SD63: MTU Gas turbine Repair Report T2 Silica 2007 During Period 26/06/2007
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VALIDATION REPORT
to 15/08/2007
/36/ SD64: Repair Report T1 2007, Sulzer final for gear box breakdown and repair Dated
14/12/2007
/37/ SD65: Compliance report towards sustainable development criteria established by host
country DNA.
/38/ SD66: Invitation letter for stake holder Consultation process.
/39/ SD67: EF Sumatra: Calculation Spread sheet
/40/ SD68: Grid Emission Factor Calculation Demonstration of how Emission factor is
calculated by the DNA.
/41/ SD69: Investment Analysis Spread sheet.
/42/ Proof of PLF Power purchase agreement with PT PLN
SD70: Signed PPA for purchase of power between Meppogen and PLN Dated.
11/10/2011
/43/ Indonesias domestic Gas Price should give fair return : BP Migas Press release by
PLATTS Dtd. 23/02/2011
(http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8578885)
/44/ SD47: Market prices based on PGN presentation to investors
/45/ Retrospective Gas Price :http://www.questpetroleum.com/i/pdf/presentations/2011-11-
30-QPN-Investor-Update.pdf
/46/ SD-50 - Additional_Gas_Price_MEDCO_MEPPOGEN (For Project Scenario)
Category 2 Documents:
Background documents related to the design and/or methodologies
employed in the design or other reference documents.
[1] CDM Validation and Verification Standard (Version 03.0)
[2] Approved consolidated methodology ACM0007: Conversion from single cycle to
combined cycle power generation Version 6.1.0
[3] Tool to calculate the emission factor for an electricity system, version 3.0.0
[4] Combined Tool to identify the baseline scenario and demonstrate additionality
Version 5.0.0
[5] Tool to calculate project leakage CO2 emissions from fossil fuel combustion Version
2
[6] Tool to determine the remaining lifetime of equipment, Version 01
[7] Guideline for Completing the Project Design Document (CDM-PDD) And the
Proposed New Baselien and Monitoring Methodology (CDM-NM), Version 7 EB
41 Annex 12,
[8] CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT
FORM (CDM-PDD) Version 03 - in effect as of: 28 July 2006
[9] Annex 05 of EB 62; Guidance on the demonstration and assessment of prior
consideration of the CDM, version 4.0
[10] Annex 13 of EB 62; Guidance on the assessment of Investment
analysis, Ver. 5.0.
[11] SD4: Press Release on Indonesian Government Policy on Fast Track Phase 2 to open
energy sector for private energy producers Dated June 2011
[12] SD4a: Sustainable Development Criteria Host Country
(http://PAsarkarbon.dnpi.id/web/index.php/komnasmpb/cat/5/kriteria-p)
[13] SD5: Indonesia Energy-67% 2010 to 2020 Energy Development policy of host
country http://www.theindonesiatoday.com/energy-headline)
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[14] SD6: Indonesia Energy Policy Review

[15] SD16 SD18: Statistic Book of electricity and energy in Indonesia Showing energy
production and supply facility in host country for year 2007 2009.
[16] SD19: Electricity Regulation in Host Country (Law No. 30/2009 Dated 23/09/2009
[17] SD25: Environmental Impact Analysis
[18] SD27: Feasibility Environmental impact analysis No. 188/KPTS/BLHI/2010 as per
local regulation (Government document on Approval Dated 28/01/2010)
[19] SD28: Business License obtained by Meppogen for Operation of power plant in
Muara Enim.
[20] SD29: IPCC 2006 Guideline V2 Energy Chapter 2 Stationary Combustion
[21] SD30: Environmental Management Plan for Gunung Megang Power plant operation
and expansion.
[22] SD31: Environmental Monitoring Plan for Gunung Megang Power plant operation
and expansion
[23] SD37:Amdal Regulation (Host Country Environmental Legislation)
[24] SD40: Gas Fired Power Plant Study www.etsap.org
[25] SD41: Indonesia Pocket Tax Book 2011
[26] SD42: EIA Approval by Local Government Authority
[27] SD43: Stake Holder Meeting Attendance List
[28] Guidelines for completing the Project Design document Form, Version 01.0 EB 66
Annex 08
[29] Project Design Document Form for CDM Project Activities (F-CDM-PDD), Version
04.1
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Persons interviewed:
List persons interviewed during the validation or persons that contributed with other
information that are not included in the documents listed above.
/1/ Ms. Fumi Harap (PP Representative)
/2/ Mr. Tim Smith (Meppogen Representative)
/3/ Mr. Peter Harris (PP Representative)
/4/ Mr. Tukidjan (Meppogen Representative)
/5/ Dr. Angus McEwin (Consultant)
/6/ Mr. Sandeep Jaganath (Consultant)
/7/ Mr. Panchaksharam Thirumalavan (Consultant)
/8/ Mr. Niplan Syed (Local Stake Holder)
/9/ Mr. Dorman (Local Stake Holder)
/10/ Mr. Robin (Local Stake Holder)
/11/ Mr. Sukini (Local Stake Holder)
/12/ Mr. Arizul Anwar (Local Stake Holder)
/13/ Mr. Yanseri (Local Stake Holder)
/14/
1. o0o -
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7 CURRICULA VITAE OF THE DOES VALIDATION TEAM

MEMBERS
Ram M. Desai (Lead Verfier) Bureau Veritas Certification, Lead Verifier
Environmental Engineer with over all 13 years of experience in various industries related to Water & Waste water
engineering design, installation & Commissioning, Integrated Facility Management for Environmental Services
operations in various industries i.e Automotive, Pharmaceutical , IT & Electronics (With Clean Room).
Management System Implementation and Maintenance, Green Building concept implementation, Lean Management
Implementation, Water & Waste Water engineering Design & project Management, Project Environmental
Compliance etc. for a construction company.
He is the lead auditor for Environment management system, Quality management system and Occupational health
and safety management system and his auditing experience spans for 3 year with BVCI & BVCS. He has undergone
intensive training on Clean Development Mechanism and was trained as Lead Verifier for CDM in the year 2005
and working as a lead Verifier for validation and verification of CDM/VCS projects
So Shuk Ling ( Team Member) : She is a Bachelor in Chemistry and statistic and Master degree in
Manufacturing and Polymer Science. She has been working in auditing for quality and Environmental management
system for more than 9 years and in Electronics Manufacturing company for more than 8 years. She has undergone
intensive training on Clean Development Mechanism.
Sushil Budhia (External Financial Expert): He has been practicing as Chartered Accountant for 25 years and he
has very wide experience on project finance, taxation and financial auditing. He has undergone training on Clean
Development Mechanism and has conducted verification of financial indicators like IRR for more than 70 CDM
projects.
Lim Chai Eng (Internal Financial Expert)Bureau Veritas(Singapore) Pte. Ltd.

Is working as an account professional since last 18 years. She is bachelor in Tertiary Accountancy from NTU,
Singapore. She is working with Bureau Veritas (Singapore) Pte. Ltd. since last 10 years and is currently heading
Finance Department as Finance Manager. She has good knowledge of accountancy practices and has good
understanding towards financial regulations in SEA region.
Kusheru Wibowo (Local Legal Expert)

Bureau Veritas Certification, Verifier Climate Change
A Chemical Engineer with over ten (10) years of experience. In Polymerization and Polyester manufacturing and
He has worked with Standards in Bureau Verification Certification for nine (9) years. He has undergone intensive
training on Clean Development Mechanism and has been involved in 9 CDM project validation/verification
activities.
H B Muralidhar: (ITR) Lead auditor in Bureau Veritas Certification for Environment Management System,
Quality Management System and Occupational Health and Safety Management System. Graduate in Electrical
Engineering with 25 years of experience power generation and distribution related fields as well as in management
system auditing. He is the Lead auditor for Environmental Management System, Quality Management system and
Occupational Health and Safety Management System. He has undergone intensive training on Clean Development
Mechanism. He is the technical expert & conducted Validation / Verification for more than 50 CDM Projects
2. o0o -
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APPENDIX A: COMPANY CDM PROJECT VALIDATION PROTOCOL
Draft Final
CHECKLIST QUESTION Ref. COMMENTS
Concl Concl
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VALIDATION REPORT
Draft Final
Concl Concl
1. Approval COUNTRY A COUNTRY B
(The NETHERLANDS) (INDONESIA)
a. Have all Parties involved approved the VVS 43 LOA is not provided by LOA is not provided by the PP CAR 1 OK
project activity? the PP Closed
b. Has the DNA of each Party indicated as VVS 43 No No
being involved in the proposed CDM
project activity in section A.3 of the PDD
provided a written letter of approval? (If
yes, provide the reference of the letter of
approval, any supporting documentation,
and specify if the letter was received
from the project participatn or directly
from the DNA)
c. Does the letter of approval from DNA of VVS 43 Refer to CAR 1 Refer to CAR 1 CAR 1 OK
each Party involved: Closed
i. confirm that the Party is a Party of the VVS 43.a Refer to CAR 1 Refer to CAR 1 CAR 1 OK
Kyoto Protocol? Closed
ii. confirm that participation is voluntary? VVS 43.b Refer to CAR 1 Refer to CAR 1 CAR 1 OK
Closed
iii. confirm that, in the case of the host VVS 43.c Refer to CAR 1 Refer to CAR 1 CAR 1 OK
Party, the proposed CDM project Closed
activity contributes to the sustainable
development of the country?
iv. Refers to the precise proposed CDM VVS 43.d Refer to CAR 1 Refer to CAR 1 CAR 1 OK
project activity title in the PDD being Closed
submitted for registration?
d. Is(are) the letter(s) of approval VVS 44 Refer to CAR 1 Refer to CAR 1 CAR 1 OK
unconditional with respect to (i) to (iv) Closed
above?
e. Has(ve) the letter(s) of approval been VVS 44 Refer to CAR 1 Refer to CAR 1 CAR 1 OK
issued by the respective Partys Closed
designated national authority (DNA) and
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VALIDATION REPORT
Draft Final
Concl Concl
is valid for the CDM project activity under
validation?
f. Is there doubt with respect to the VVS 44 Refer to CAR 1 Refer to CAR 1 CAR 1 OK
authenticity of the letter of approval? Closed
g. If yes, was verified with the DNA that the VVS 44 Refer to CAR 1 Refer to CAR 1 CAR 1 OK
letter of approval is authentic? Closed
2. Participation PP1 - (E.ON Carbon PP2 - PT Metaepsi Pejebe
Sourcing GmBH) Power Generation (Meppo-Gen)
a. Have all project participants been listed VVS 49 Yes PT Metaepsi Pejebe Power OK OK
in a consistent manner in the project E.ON Carbon Sourcing Generation (Meppo-Gen) is only
documentation? GmBH a implementer of the Large
scale Project in Host Country
Indonesia
b. Has the participation of the project VVS 49 Yes Yes OK OK

participants in the project activity been Entry into force Entry into force on 03 March
approved by a Party to the Kyoto 16 February 2005 2005
Protocol?
c. Are the project participants listed in VVS 49 Yes NA OK OK
tabular form in section A.3 of the PDD?
d. Is the information in section A.3 VVS 49 Yes NA OK OK
consistent with the contact details
provided in annex 1 of the PDD?
e. Has the participation of each of the VVS 49 Refer to CAR 1 CAR 1 OK
project participants been approved by at
least one Party involved, either in a letter Closed
of approval or in a separate letter
specifically to approve participation?
(Provide reference of the approval
document for each of the project
participants)
f. Are any entities other than those VVS 49 No CAR 1 OK
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approved as project participants included Closed
in these sections of the PDD?
g. Has the approval of participation issued VVS 49 Refer to CAR 1 Refer to CAR 1 CAR 1 OK
from the relevant DNA? Closed
h. Is there doubt with respect to (g) above? VVS 49 Refer to CAR 1 Refer to CAR 1 CAR 1 OK
Closed
i. If yes, was verified with the DNA that the VVS 49 Refer to CAR 1 Refer to CAR 1 CAR 1 OK
approval of participation is valid for the Closed
proposed CDM project participant?
3. Project design document
a. Is the PDD used as a basis for validation VVS 63 Yes according to Project Design Document Form (CDM PP) OK OK
prepared in accordance with the latest Version 3 in effect as of : 28 July 2006
template and guidance from the CDM
Executive Board available on the
UNFCCC CDM website?
b. Is the PDD in accordance with the VVS 63 Yes OK OK
applicable CDM requirements for
completing the PDD?
c. In CDM-PDD section A.1 are the EB 41 Ann
following provided? 12
i. Title of project EB 41 Ann Yes,The Project Title as mentioned in the web hosted PDD is OK OK
12 Gunung Megang Add-on Combined Cycle Project
ii. Current version number and date of EB 41 Ann Version 1.0 dated on 11th Nov 2011 OK OK
document 12
d. In CDM-PDD section A.2 are following EB 41 Ann Yes the information provided is in line with PDD guidance OK OK
provided (max. one page)? 12 and is found limited to one page only.
i. A brief description ot the project activity EB 41 Ann Yes, Project activity involves conversion of single cycle gas- OK
covering purpose which includes the 12 fired Gunung Megang Power Plant into a combined cycle
scenario existing prior to the start or plant. The purpose of the project activity is to utilize waste
project, present scenario and baseline heat to generate additional electricity through steam without
scenario upgrade,significant modification or retrofit of the existing open
cycle gas turbine.
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-SD2-OSHA starting date of Open Cycle Plant- is in the local CL 6 OK
language, please provide authentic translation of the Closed
document. From the document creation date it shows that the
document is created on 17 June 2009, how does it supports
the start date of open cycle plant, please clarify.(Documents
preferred to support the start date is either commissioning
report or hand over document from EPC contractor or project
owner)
-Please Provide sufficient evidences to prove that there is no CL 7 OK
major modification / retrofit to the existing open cycle plant- Closed
previous maintenance history records of the important
equipments required for validation purpose.
SD3-EPC shows ST Gross output as 34,417 kW (34.417 CL8 OK
MW) and Net installed capacity defined in the PDD section Closed
A.2 is 31.8MW. Why this difference exists in the capacity
steam turbine (ST)?
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ii. Explanation on how the GHG emission EB 41 Ann The project activity includes OK OK
reductions are effected 12 1. the installation of two heat recovery steam
generators (HRSGs) of 132.64 t/h capacity each to
utilize the waste heat from gas turbines to generate
steam.
2. Installation of one Steam Turbine of 132.3 t/h
capacity @ 64.01 bar steam pressure
Installation of one Generator to generate electricity from the
steam with a capacity of 34,350 KW (Rated Capacity)
iii. The PPs vies on the contribution of EB 41 Ann PP has described how project will help to achieve sustainable
project activity to sustainable 12 development in host country Indonesia in PDD section A.2 . It
development is also mentioned that the Project has fulfilled host country
criteria for the Sustainable development established by the
DNA.
Carbon Trading Mechanism Division of Host Country

Indonesia calls for demonstrating compliance towards
established sustainable development criteria by PP through a
formal Method check used to evaluate the proposed CDM CL 1 OK
project, through which Project Proponent should provide an
explanation and justification that the proposed project meets Closed
all indicators. Please provide sufficient evidences on the
compliance towards this requirement and please explain how
PDD is aligned with the applicable indicators.
iv. Are there any changes/modifications EB 41 Ann No there is no modification to PDD evidenced during Site OK OK
compared to the webhosted PDD? 12 Visit.
e. In CDM-PDD section A.3 are following EB 41 Ann
provided in the tabular format? 12
i. List of project participants and parties EB 41 Ann Yes, the information is provided in the PDD section A.3 OK OK
12
ii. Identification of Host Party Indonesia OK OK
iii. Indication whethre the Party wishes to EB 41 Ann No Both parties identified by PP are not willing to participate OK OK
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be considered as project participant 12 in the project activity as Project Participant. This is clearly
indicated in the PDD section A.3
f. In CDM-PDD section A.4.1 are following EB 41 Ann
provided? 12
i. Technical description, location, host EB 41 Ann Yes, Indonesia OK OK
party(ies) and address as required 12 JI. Raya Palembang-Muara Enim, Km.152 Gunung Megang
Muara Enim, South Sumatra,Indonesia
ii. Detailed physical location with unique EB 41 Ann The geographical coordinates of the project site are: OK OK
identification of the project activity (eg. 12 303026.14S
Longitude/latitude) not to exceed one 10304801.52E
page
iii. Are there any changes/modifications EB 41 Ann No there is no modification to PDD evidenced during Site OK OK
compared to the webhosted PDD? 12 Visit.
g. In CDM-PDD section A.4.2 is the list of EB 41 Ann PP has mentioned Category of project activity as Energy OK
categoreis of project activities provided? 12 industries (renewable / non-renewable source )
Identification of category for the project activity is done

wrong, Please correct the category in line with the information CAR
availbale on the UNFCCC CDM Web site. Closed OK
h. In CDM-PDD section A.4.3 are following EB 41 Ann
provided? 12
i. A description of how environmentally EB 41 Ann Yes.The project activity involves recovery of waste heat from OK OK
safe and sound technology, and know- 12 existing Open cycle gas based Power plant using efficient
how, is transferred to the Host equipments i.e.one steam turbine, two HRSG and one
Party(ies) generator to produce additional electricity.
This technology of converting open cycle power plant to

combined cycle Power plant will increase the efficiency of the
existing open cycle power plant. And this will result in the
increase in the capacity of power plant and additional
Electricity generation. Estimated increase in the electricity
generation from the base line scenario is 293811454 KWh/yr.
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ii. Explanation of purpose of project EB 41 Ann Yes., The baseline scenario is the same as the scenario
activity with scenario existing prior to 12 existing prior to the implementation of the project activities.
the start of project, scope or present The existing system comprises of two sets of gas turbine
activities and the baseline scenario power generator with installed capacity of 40MW each. The
major GHG emission source considered at the existing site
was emission due to natural gas combustion at the gas OK OK
turbine. The exhaust gas is released to the atmosphere at the
exhaust stack.
The proposed new system comprises the addition of two sets
of HRSG and one steam Turbine power generator with the
installed capacity of 30 MW. The proposed system will
recover the exhaust gas from gas turbine and generate
additional electricity thus in increase the overall energy
efficiency of the plant.
PDD section 4.3 Para 3 states that in the Baseline Scenario,

the additional electricity produced in the project scenario is
supplied by the electricity grid, which is confusing. Please
clarify. CL 2 OK
Closed
PDD section A4.3 Table 3 shows that Plant load factor is
defined as 85% (predicted), however if back calculation is
done based on the information available i.e maximum
capacity and total electricity generated in a year the PLF is CL 3 OK
coming as 90%, please explain why this discrepancy is there Closed
in the calculation of PLF.
Section A.4.3 of PDD is providing information regarding
technology employed for project activity which included
equipment specifications in baseline as well as project CL 14
scenario, please provide clear information on the efficiencies OK
Closed
of these equipment in the project activity.
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iii. List and arrangement of the main EB 41 Ann Yes. OK
manufacturing/production technologies, 12 OK
systems and equipments involved
iv. The emissions sources and GHGs EB 41 Ann Yes OK OK

involved 12
v. Are there any changes/modifications EB 41 Ann No , there are no changes evidenced compared to the web OK OK
compared to the webhosted PDD? 12 hosted PDD.
i. In CDM-PDD section A.4.4 is the EB 41 Ann Yes OK OK
estimation of emission reductions 12
provided as requested in a tabular
format?
j. In CDM-PDD section A.4.5 is Information EB 41 Ann No public funding OK OK
regarding Public funding provided? 12
k. In CDM-PDD section B.1 are following EB 41 Ann
provided? 12
i. The approved methodology and EB 41 Ann The approved consolidated methodology ACM0007 OK OK
version number 12 Conversion from single cycle to combined cycle power
generation Version 6.1.0
ii. Any methodologies or tools which the EB 41 Ann Tools used:
above approved methodology draws 12 1. Combined tool to identify the baseline scenario and
upon and their version number demonstrate additionality, version 3.0.0
2. Tool to calculate project or leakages CO2 emissions from OK OK
fossil fuel combustion, Version 2
3. Tool to calculate the emission factor for an electricity
system, Version 2.2.0
4. Tool to determine the remaining lifetime of equipment,
Version 01
PDD section B.1 refers to the tools used by PP to develop
this proposed Large Scale CDM project, however, the PP has
not used current revision tools. Ie. Combined tool to identify CAR 3 OK
the baseline scenario and demonstrate additionality (version
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3.0.0 used / current version is 3.0.1) and Tool to calculate the Closed
emission factor for an electricity system (version 2.2.0 used /
current version is 2.2.1).
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l. In CDM-PDD section B.2 are following EB 41 Ann
provided? 12
i. Justification of the choice of EB 41 Ann Yes. OK OK
methodology that the project activity 12 PP has demonstrated that the project activity meets each of
meets each of the applicability the applicability condition prescribed by the Approved
conditions methodology and is is presented in a transparent manner.
Relevant Documents to support the applicability condition are

provided by the PP.
ii. Documentations with references that EB 41 Ann Baseline information is provided in the Annex 3 OK OK
had been used. This can be provided 12
in Annex 3 instead
m. In CDM-PDD section B.3 are following EB 41 Ann
provided? 12
i. Description of all sources and gases EB 41 Ann Yes OK OK
included in the project boundary in the 12 Mainly CO2 gases in baseline and project activity.
table
ii. A flow diagram of the project boundary EB 41 Ann Flow diagram of the project boundary, physically delineating OK OK
physically delineating the project 12 the project activity is presented in PDD section B.3
activity
iii. The flow diagram with all equipment, EB 41 Ann Yes. OK OK
systems and flows of mass and energy 12 The flow of mass and energy relevant to project is provided in
etc the PDD section A.4.3
n. In CDM-PDD section B.4 are following EB 41 Ann
provided? 12
i. Explanation how the most plausible EB 41 Ann Yes. OK
baseline scenario is identified in 12 PP has provided adequate information on how identification OK
accordance with the selected baseline of most plausible Baseline scenario is done.
methodology
PP has utilized Combined tool to identify the baseline OK OK
scenario and demonstrate additionality Version 5.0.0.
According to the tool PP has identified six Alternative
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Baseline scenarios as given below
1. Proposed project activity undertaken without being
registered as a CDM project activity
2. Continuation of the current practice
3. Proposed project activity undertaken without being
registered as a CDM project activity at a later point in
time
4. Installation of Coal fired power plant in parallel to the
existing open cycle power plant instead of proposed
project activity.
5. Installation of Oil fired power plant in parallel to the
project activity.
6. Installation of Renewable power in parallel to the
project activity
PP has identified alternative 1 and 2 as most plausible

alternative to develop the baseline and the both alternative
are in compliance with Host country local laws and
regulations.
PDD does not demonstrated how Methodology condition CAR 4

pertaining to selection of baseline scenario and the OK
demonstration of additonality is fulfilled specifically when the Closed
current practice condition (to continue the operation in open
cycle) is assessed, the future estimated load factor should
reflect the changes due to new conditions in the grid.
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i. Justification of key assumptions and EB 41 Ann Yes. Baseline information is provided in the Annex 3 OK OK
rationales 12
ii. Transparent illustration of all data used EB 41 Ann Yes OK OK
to determine the baseline scenario 12
(variables, parameters, data sources,
etc.)
iii. A transparent and detailed description EB 41 Ann Yes OK OK
of the identified baseline scenario, 12
including a description of the
technology that would be employed
and/or the activities that would take
place in the absence of the proposed
project activity
iv. Are there any changes/modifications EB 41 Ann No. OK OK
compared to the webhosted PDD? 12
b. In CDM-PDD section B.5 are following EB 41 Ann
provided? 12
i. Explanation of how and why this EB 41 Ann Yes OK OK

project activity is additional and 12
therefore not the baseline scenario in
accordance with the selected baseline
methodology
ii. Justification of key assumptions and EB 41 Ann Yes OK OK
rationales 12
iii. Transparent illustration of all data used EB 41 Ann Yes OK OK
to determine the baseline scenario 12
(variables, parameters, data sources
etc)
iv. Evidence that the incentive from the EB 41 Ann PP has provided project activity events in chronological order OK OK
CDM was seriously considered in the 12 in table 4 of PDD section B.5
decision to proceed with the project
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activity, if the starting date of the The major evidence which is provided to validation team by
project activity is before the date of PP to demonstrate that the incentive from the CDM was
validation seriously considered is Prior consideration form submitted to
the EB and Indonesian DNA on 06/05/2011 as per the
Guidance on the demonstration and assessment of prior
consideration of the CDM, Version 3.
It is evidenced from the Chronological events that the Project

implementation is started much earlier than the Prior
Consideration letter date hence please provide internal CL
document where the decision to implement this proposed OK
CDM project with CDM incentive is taken i.e. Board Closed
resolution, Feasibility study report etc.
c. In CDM-PDD section B.6.1 are following EB 41 Ann
provided? 12
i. Explanation as to how the procedures, EB 41 Ann Yes
in the approved methodology to 12 The Project emissions, Baseline emissions, leakage
calculate project emissions, baseline emissions and emission reduction calculations presented in OK OK
emissions, leakage emissions and the PDD section B.6.1 are found transparent and in line with
emission reductions are applied to the the Approved Methodology ACM 0007 version 06.1.0.
proposed project activity
PP has utilized tool to calculate project or leakage CO2
emissions from fossil fuel combustion version 02. The toll is
found applied correctly to calculate CO2 emissions from fossil
fuel combustion in process j during the year y(PEFC,j,y)
PDD section B.6.1 Explanation of methodological choices

refers to the determination of the emission factor for the grid CAR 5 OK
electricity system (EFgrid.y) using tool to calculate the emission
factor for an electricity system, however, the step by step Closed
approach prescribed by the tool to arrive at EFgrid.y is not
demonstrated transparently in the PDD.
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ii. Equations used in calculating emission EB 41 Ann Yes. PP has applied correct equations for calculating OK OK
redutions 12 emission reductions.
Emission reductions are calculated using following equation
ERy = BEy PEy Ley
Where
ERy Emission reductions in year y
ERy Baseline emissions in year y
ERy Project Emissions in year y
ERy Leakage emissions in year y
iii. Explanation and justification for all EB 41 Ann Yes, has justified relevant methodological choices including
relevant methodological choices, 12 different cases, options and default values while calculating
including different scenarios or cases, Baseline emissions, Project emissions, Leakage emission OK OK
options and default values and emission reductions for the proposed CDM Project
activity
The same is demonstrated transparently in the PDD Section

B.6.1, B.6.2 and B.6.3 and Emission calculation
spreadsheets provided during validation visit. OK OK
PP has selected Case (3) for demonstrating determination of

the baseline emission in line with the project electricity
generation; please clarify how Case 3 is applicable in detail to
support the foot note 35 in more transparent manner. CL 4 OK
Closed
d. In CDM-PDD section B.6.2 are following EB 41 Ann
provided? 12
i. A compilation of information on the EB 41 Ann Four parameters defined that are available at validation: CAR 8 OK
data and parameters that are not 12 1) EGoCH Historical net electricity generation by the power Closed
monitored throughout the crediting plant in open cycle mode
period but that are determined only 2) FCNG, OCH Historical fuel (natural Gas) consumption by the
once and thus remains fixed power plant in open cycle mode
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throughout the crediting period AND 3) NCVNG Net calorific value of Natural Gas used in open
that are available when validation is cycle mode
undertaken 4) EFNG Emission factor for the fuel used in open cycle mode
CAR 8
ii. The actual value applied EB 41 Ann 1) EGoCH Historical net electricity generation by the power OK OK
12 plant in open cycle mode = 525,248 MWh/yr , the value
is obtained by averaging last three years operation
reports (Year 2008 to 2010)
2) FCNG, OCH Historical fuel (natural Gas) consumption by the

power plant in open cycle mode = 138,548,546 M3/yr,
Value is the average value of last three years fuel
consumption (Year 2008 to 2010)
3) NCVNG Net calorific value of Natural Gas used in open

cycle mode = 0.04 Gj/m3, this value is a converted value
using Average GCV value 1075 BTU /SCF from the
range of GCV provided in the Gas Supply Contract i.e.
950 1250 BTU/SCF The Gas supply contract signed
th
with gas supplier Medco E&P Indonesia Dtd.26 January
2006
4) EFNG Emission factor for the fuel used in open cycle

mode = 0.0561 t/CO2/GJ, this is an IPCC Default
value table 2.2 of chapter 2 (Stationary Combustion
in Volume 2 (energy)
Above values were verified for the authenticity and

correctness and Validation team has confirmed that PP has
utilized and applied these values correctly while calculating
relevant Baseline and project emissions
iii. Explanation and justification for the EB 41 Ann Yes PP has provided justification for the choice of the source
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choice of the source of data 12 of data in transparent manner and is found documented in OK OK
the PDD section B.6.2 and B.7.1 in tabular manner.
PP uses tool to calculate the emission factor for an electricity

system, however relevant data and parameters
recommended by the tool are not found included in the PDD
section B.6.2 / PDD section B.7.1 CAR5 OK
Closed
iv. Clear and transparent references or EB 41 Ann Reference documents provided in the relevant footnote. OK OK
additional documentation in 12
v. Where values have been measured, a EB 41 Ann Yes the information is provided in PDD section B.7.1 and OK OK
description of the measurement 12 detailed Monitoring plan is provided in PDD Section B.7.2,
methods and procedures (e.g. which where responsibilities of monitoring recording and archiving
standards have been used), indicated are clearly define.
the responsible person/entity having
undertaken the measurement, the date
of measurement(s) and the
measurement results
e. In CDM-PDD section B.6.3 are following EB 41 Ann
provided? 12
i. A transparent ex ante calculation of EB 41 Ann Yes, PP has provided transparent ex ante calculation of
project emissions, baseline emissions 12 project emissions, baseline emissions and leakage emissions
(or, where applicable, direct calculation in PDD section B.6.3
of emission reductions) and leakage 1) PDD section B6.3 page 35, EGMax calculation need review
emissions expected during the 2) PDD section 6.3 page 37, Baseline Emission (BEy) is
crediting period, applying all relevant missing from the table
equations provided in the approved 3) PDD section B6.3 page 37, foot note 50, COEFi,y is a CL 5 OK
methodology calculated value- please provide transparent calculation of Closed
this parameter.
ii. Documentation how each equation is EB 41 Ann PP has applied each equation in a transparent manner and it OK OK
applied, in a manner that enables the 12 is easy to reproduce the calculation to the reader in PDD
reader to reproduce the calculation Section B.6.3
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iii. Additional background information and EB 41 Ann - Baseline information in Annex 3 data from 2008, OK OK
or data in Annex 3, including relevant 12 2009 and 2010.
electronic files (i.e. spreadsheets) CER Calculation Spread sheets
f. In CDM-PDD section B.6.4 are the EB 41 Ann Yes, Ex ante Estimated Emission reductions for 10 years OK OK
results of the ex ante estimation of 12 crediting period has been presented in a Tabular manner in
emission reductions for all years of the PDD section B.6.4.
crediting period, provided in a tabular -Estimated average annual emission reductions are 107,852
format? tCO2/yr.
-Estimated Total emission reductions for 10 year crediting
period are 1,078,520 tCO2
g. In CDM-PDD section B.7.1 are following EB 41 Ann
provided? 12
i. Specific information on how the data EB 41 Ann PP has identified four parameters to be monitored during OK OK
and parameters that need to be 12 project activities. These parameters are
monitored would actually be collected 1) EGPJ,y Net quantity of electricity generated by the
during monitoring for the project activity combined cycle power plant
2) FCi,y, Quantity of natural gas consumed by the project
activities
3) PJ,y Efficiency of the combined cycle power plant (this is
directly by calculation)
4) NCVi,y Net calorific value of natural gas used in project
ii. For each parameter the following EB 41 Ann
below information, using the table 12
provided:
a. The source(s) of data that will be EB 41 Ann Source of data has been provided for the above 4 OK OK
actually used for the proposed 12 parameters.
project activity (e.g. which exact
national statistics). Where
several sources may be used,
explain and justify which data
sources should be preferred.
b. Where data or parameters are EB 41 Ann Yes, it has been defined the measurement methods and OK OK
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supposed to be measured, 12 procedure or QA/QC procedures.
specify the measurement
methods and procedures,
including a specification which
accepted industry standards or
national or international
standards will be applied, which
measurement equipment is
used, how the measurement is
undertaken, which calibration
procedures are applied, what is
the accuracy of the
measurement method, who is
the responsible person/entity that
should undertake the
measurements and what is the
measurement interval; (i) A
description of the QA/QC
procedures (if any) that should
be applied; (ii) Where relevant:
any further comment. Provide
any relevant further background
documentation in Annex 4.
h. In CDM-PDD section B.7.2 are following EB 41 Ann
provided? 12
i. A detailed description of the monitoring EB 41 Ann Monitoring plan desscribed for : OK OK
plan 12 Monitoring for Net Electricity Generation (EGy)
Monitoring for Natural Gas consumption (FCf,NG)
Monitoring for Net Calorific Value of Natural Gas
ii. The operational and management EB 41 Ann Operation and Management organization chart has been OK OK
structure that the project operator will 12 defined.
implement in order to monitor emission
reductions and any leakage effects
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generated by the project activity
iii. The responsibilities for and institutional EB 41 Ann Data collection for monitoring will be kept at the control center OK OK
arrangements for data collection and 12 or other designated location.
archiving Responsibility has been defined for plant manager, CDM
expert, data recorder/operator and meter supervisor.
iv. Indication that the monitoring plan EB 41 Ann Defined monitored plan for the 4 parameters.
reflect good monitoring practice 12 Symbol of efficiency of combined cycle power plant at page
appropriate to the type of project 44 section Parameters for CER computation missing. CL 11
activity Closed OK
v. Relevant further background EB 41 Ann PP has provided relevant Monitoring information in Annex 4 OK OK
information in Annex 4 12
i. In CDM-PDD section B.8 are following EB 41 Ann
provided? 12
i. Date of completion of the application of EB 41 Ann 20/09/2011 OK OK
the methodology to the project activity 12
study in DD/MM/YYYY
ii. Contact information of the EB 41 Ann Ms. McLaughlin, Julie OK OK
person(s)/entity(ies) responsible for the 12 E.ON Carbon Sourcing GmbH
application of the baseline and
monitoring methodology to the project
activity
iii. Indication if the person/entity is also a EB 41 Ann Yes OK OK
project participant listed in Annex 1 12
j. In CDM-PDD section C.1.1 are following EB 41 Ann
provided? 12
i. The starting date of a CDM project EB 41 Ann 18/03/2011 OK OK
activity, which is the earliest of the 12
date(s) on which the implementation or
construction or real action of a project
activity begins/has begun (EB33, Para
76/CDM Glossary of terms/EB41, Para
67)
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ii. A description of how this start date has EB 41 Ann Description is provided in foot Note 63. ,PP has considered OK OK
been determined, and a description of 12 the purchase agreement of steam turbine as the real action
the evidence available to support this for proposed CDM project activity and hence the evidence of
start date Real action is provided as the Signed contract for steam
turbine purchase Dtd 18/03/2011.
iii. If this starting date is earlier than the EB 41 Ann Start date of CDM project on 18/03/2011 and web hosted for OK OK
date of publication of the CDM-PDD for 12 comments on 17/11/2011.
global stakeholder consultation by a
DOE, description in Section B.5 Prior CDM consideration was mentioned in the section B.5
contain a of how the benefits of the SD20-prior consideration note_06 May 2011.
CDM were seriously considered prior
to the starting date (EB41, Para 68).
k. In CDM-PDD section C.1.2 is the EB 41 Ann 14 years. OK OK
expected operational lifetime of the 12
project activity in years and months
provided?
l. In CDM-PDD section C.2 is it stated EB 41 Ann Fixed crediting period OK OK
whether the project activity will use a 12
renewable or a fixed crediting period and Starting date for fixed crediting period is on 01/10/2012 or the
is C.2.1 or C.2.2 completed accordingly? registration of the project activity under UNFCCC, whichever
is later.
Length of fixed crediting period is 10 years 0 months
m. In CDM-PDD section C.2.1 is it indicated EB 41 Ann Not Applicable as PP has selected Fixed crediting period. OK OK
that each crediting period shall be at 12
most 7 years and may be renewed at
most two times, provided that, for each
renewal, a designated operational entity
determines and informs the Executive
Board that the original project baseline is
still valid or has been updated taking
account of new data where applicable?
n. In CDM-PDD section C.2.1.1 are dates in EB 41 Ann Not Applicable OK OK
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the following format: (DD/MM/YYYY) 12
provided?
o. In CDM-PDD section C.2.1.2 is the EB 41 Ann Not applicable OK OK
length of the first crediting period in years 12
and months provided?
p. In CDM-PDD section C.2.2 is the fixed EB 41 Ann Yes OK OK
crediting period at most ten (10) years 12 10 years
provided?
q. In CDM-PDD section C.2.2.1are the EB 41 Ann 01/10/2012 or the registration of the project activity under OK OK
dates provided in the following format: 12 UNFCCC, whichever is later.
(DD/MM/YYYY)?
r. In CDM-PDD section C.2.2.2 is te length EB 41 Ann 10 years 0 month OK OK
of the crediting period in years and 12
months Provided?
s. In CDM-PDD section D.2 are the EB 41 Ann The original OCGT plant has an installed capacity less than OK OK
conclusions and all references to support 12 100MW and therefore did not need to undertake a full EIA
documentation of an environmental process, as per the ministerial decree 17/2001. Therefore,
impact assessment undertaken in the EIA process was not undertaken for the open cycle power
accordance with the procedures as plant. After the conversion, the total installed capacity is
required by the Host Party, if 110MW which requires the EIA process.
environmental impacts are considered
significant by the project participants or The EIA for the proposed combined cycle Power Plant of
the Host, provided? Capacity 110 MW was done in December 2009, EIA
document was submitted by PP for the validation and it is
noted from the document that there are no Significant
environmental impacts due to implementation of proposed
CDM Project.
Based on the EIA report host country DNA approval has been
obtained by the PP and the EIA Approval Letter has been
validated by the validation team Dtd. 28th January 2010
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Entire EIA process found in compliance with the EIA
regulations of the host country.
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t. In CDM-PDD section E.1 are the EB 41 Ann
following provided? 12
i. The process by which comments by EB 41 Ann Stakeholder consultation meeting on 27th September 2011. OK OK
local stakeholders have been invited 12 Total 6 comments received from stakeholder meeting and
and compiled. An invitation for responded to the comments.
comments by local stakeholders shall
be made in an open and transparent
manner, in a way that facilities
comments to be received from local
stakeholders and allows for a
reasonable time for comments to be
submitted.
ii. The project activity is described in a EB 41 Ann Agenda in the meeting: OK OK
manner, which allows the local 12 1) To explain the existing plant design, proposed modification
stakeholders to understand the project and its impacts on green house gas emission from the project
activity, taking into account 2) Brief explanation of CDM and its objective
confidentiality provisions of the CDM 3) Local impact of the project
modalities and procedures. 4) Question and comments from stakeholders.
iii. The local stakeholder process has EB 41 Ann The Local Stake holder consultation process was completed OK OK
been completed before submitting the 12 by PP in the month of September 2011 which is validated
proposed project activity to the DOE for using minutes of meeting for stake holders consultation
validation. process Dtd. 27 Sept 2011.
Hence the Local Stake holder consultatioin process is

completed before the webhosting of the PDD for Global stake
holder comment and Site visit on 09/01/2012
u. In CDM-PDD section E.2 are following EB 41 Ann
provided? 12
i. Identification of local stakeholders that EB 41 Ann 6 local stakholders have been identified that have made OK OK
have made comments 12 comments:
- Mr. Marsito from Local Legislative Body (DPRD),
- Mr. Jony, Journalist from Sumsel Post,
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- Mr. Edi from Local Government of Panang Jaya,
- Mr. Nopian, Head of Village of Ulak Bandung,
- Head of sub-district Ujan Mas and
- Press Council State Information
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ii. A summary of this comments. EB 41 Ann Summary of the comments received is provided in the PDD OK OK
12 section E.2
v. In CDM-PDD section E.3 is the EB 41 Ann Reponses have been given to the 6 comments from the 6 OK OK
explanation of how due account have 12 stakeholders.
been taken of comments received from
local stakeholders provided?
w. In CDM-PDD Annex 1 are the following EB 41 Ann
provided? 12
i. Contact information of project EB 41 Ann - E.ON Carbon Sourcing GmbH (PP and contractual OK OK
participants 12 partner with DOE)
- PT Metaepsi Pejebe power Generation (Meppo-Gen)
ii. For each organisation listed in section EB 41 Ann Yes OK OK
A.3 the following mandatory fields: 12
Organization, Name of contact person,
Street, City, Postfix/ZIP, Country,
Telephone and Fax or e-mail
x. In CDM-PDD Annex 2 is information from EB 41 Ann No public funding is availed for development of this project OK OK
Parties included in Annex I on sources of 12 and no public fund will be used in future.
public funding for the project activity
which shall provide an affirmation that
such funding does not result in a
diversion of official development
assistance and is separate from and is
not counted towards the financial
obligations of those Parties provided?
y. In CDM-PDD Annex 3 is the background EB 41 Ann Baseline information on following key project parameters is OK OK
information used in the application of the 12 provided in the Annex 3
baseline methodology provided? - fuel consumption (MMBTU@1.000 BTU/SCF),
- Fuel consumption in m3 and
- Net electricity generation (kWh),
- Calorific value of natural gas,
- ISCF,
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- EFCO2,Gas
- Emission factor of the grid to which the project power
unit is connected
Information on baseline Baseline is provided in a
transparent manner using last three years (Year 2008 to
Year 2010) data for above mentioned key parameters
used in establishing baseline for this proposed CDM
Project activity.
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z. In CDM-PDD Annex 4 is the background EB 41 Ann Backgroud information of the 4 parameters: OK OK
information used in the application of the 12 EGPJy, FCi,y, PJ,y and NCVi,y
monitoring methodology provided?
4. Project description
a. Does the PDD contain a clear description VVS 64 Yes it has been stated clearly in section A.2. OK OK
of the project activity that provides the Project activity is to convert the open cycle gas-fired Gunung
reader with a clear understanding of the Megang Power Plant into a combined cycle power plant to
precise nature of the project activity and increase the capacity from 80MW to 110MW using waste
the technical aspects of its heat generated during open cycle Power plant operations.
implementation? The project activity involves installation of two heat recovery
steam generators(HRSGs) which utilize the waste heat from
gas turbines to generate steam.
One Steam Turbine and one generator to produce Electricity.
The generated power in Combine cycle plant shall be

delivered / supplied to the same electricity System (National
grid) to which open cycle power plant was connected earlier.
b. Is the description of the proposed CDM VVS 65
project activity as contained in the PDD:
i. sufficiently covering all relevant VVS 65 Yes OK OK
elements?
ii. acurate? VVS 65 Yes OK OK
iii. providing the reader with a clear VVS 65 Yes OK OK
understanding of the nature of the Refer to 4a
proposed CDM project activity?
iv. Are there any changes/modifications VVS 65 No there are no changes in the project activity compared to OK OK
compared to the webhosted PDD? the web hosted PDD
c. Is the proposed CDM project activity in VVS 66 Both OK OK
existing facilities or utilizing existing
equipments?
d. Is the CDM project activity one of the VVS 66
following types:
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i. Large scale? VVS 66 Large scale using methodology ACM0007/ Version 6.1.0 OK OK
ii. Non-bundled small scale projects with VVS 66 Not Applicable OK OK
emission reductions exceeding 15,000
tonnes per year?
iii. Bundled small scale projects, each with VVS 66 Not Applicable OK OK
emission reductions not exceeding
15,000 tonnes?
e. If yes to (c) and (d) above, was a VVS 66 Yes, the Site visit was conducted during 09/01/2012 to OK OK
physical site inspection conducted to 11/01/2012 period to confirm that the description in the PDD
confirm that the description in the PDD reflects the proposed CDM project activity.
reflects the proposed CDM project
activity, unless other means are specified
in the methodology?
f. If yes to (d.iii) above, was the number of VVS 66 Not Applicable OK OK
physical site visits base on samping?
g. If yes is the sampling size appropriately VVS 66 Not Applicable OK OK
justified through statistical analysis?
h. For other individual proposed small scale VVS 67 Not Applicable OK OK
CDM project activities with emission
reductions not exceeding 15,000 tonnes
per year, was a physical site inspection
conducted?
i. For all other proposed CDM project VVS 68 Not Applicable OK OK
activities not referred to in paragraphs 59
61, was a physical site inspection
conducted?
j. If no, was it appropriately justified? VVS 68 Not Applicable OK OK
k. Does the proposed CDM project activity VVS 68 No OK OK
involve the alteration of an existing The project activity is to utilize waste heat generating in open
installation or process? cycle power plant by installing additional equipments i.e. Two
Heat Recovery Steam Generators (HRSGs), One Steam
Turbine and one Generator to produce additional electricity.
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Hence there is no process change in the existing installation
instead it is considered as increase in the energy efficiency.
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l. If yes, does the project description clearly VVS 68 Not Applicable. OK OK
state the differences resulting from the
project activity compared to the pre-
project situation?
5. Baseline and monitoring methodology
a. General requirement
a. Do the baseline and monitoring VVS 70 Yes OK OK
methodologies selected by the project According to ACM0007/Version 6.1.0
participants comply with the
methodologies previously approved by
the CDM Executive Board?
b. Is the selected methodology applicable to VVS 70 Refer to (5.b.a) below - -
the project activity?
c. Had the PP correctly applied the selected VVS 70 Refer to (5.b.d) below - -
methodology?
d. Had the selected methodology been VVS 71 Refer to (5.c) below - -
correctly applied with respect to project
boundary?
e. Had the selected methodology been VVS 71 Refer to (5.d) below - -
correctly applied with respect to baseline
identification?
f. Had the selected methodology been VVS 71 Refer to (5.e) below - -
correctly applied with respect to
Algorithms and/or formulae used to
determine emission reductions?
g. Had the selected methodology been VVS 71 Refer to CAR 4 CAR 4 OK
correctly applied with respect to Closed
additionality?
i. Specific questions per methodology Refer 5.b.a.i.1 5.b.a.i.7 OK OK
regarding application of the
methodology with respect to
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additionality.
h. Had the selected methodology been VVS 71 Refer to methodology checklist OK OK
correctly applied with respect to
monitoring methodology?
i. Specific questions per methodology 71 Refer 5.b.a.i.1 5.b.a.i.7 OK OK
regarding application of the
methodology with respect to monitoring VVS
methodology.
b. Applicability of the selected
methodology to the project
activity
a. Is the selected baseline and monitoring VVS 77 Yes OK OK
methodology, previously approved by the According to ACM0007/Version 06.1.0
CDM Executive Board, applicable to the
project activity, including that the used
version valid?
i. Whether Applicability conditions are ACM 0007 Yes. OK OK
fulfilled by the Project Participant as The project activity involves conversion of existing grid
mentioned in the Approved connected 80MW open cycle Power plant operated by PT
Methodology? Metaepsi Power Generation (Meppogen) to 110MW
Combined cycle Power Plant located at JL Raya Palembang
Maura Enim , KM 152 Gunung Megang, Muara Enim,
South Sumatra, Indonesia
i.1 Does Project Power unit has ACM 0007 The existing Open cycle Power plant was installed and put
operational history of at least one year into the operation in the year 2006. The same was validated
with no Major retrofit and at least one unit from the Commissioning certificates of existing Gas Turbines CL7 & OK
has an operational history of more than (02 Nos) and Generators (02 Nos) CL11
three years with no major retrofit? Gas Turbine Serial No.- Closed
Generator Serial No.
- Major Retorfits / modifications to be verified.
i.2 In the case that a unit has less than ACM 0007 The Open cycle Power Plant started operation in year 2006
three years operation history: does all hence it is Complied
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project units were designed and
commissioned for operation in single CL 7:
cycle mode only? Does PP demonstrate Please provide sufficient evidences to prove that there is no CL 7 OK
the same through relevant major modification / retrofit to the existing open cycle plant Closed
documentation such as original Process previous Maintenance history records of the important
diagrams and schemes from the equipments required for validation purpose.
construction of the pant / licenses etc?
CL 11:
Based on the discussions with site management and the
Turbine maintenance records it was evidenced that one each
major repair was done on both turbines in baseline scenario
during year 2007, please justify how applicability condition as CL11 OK
approved methodology is complied.
Closed
Validation team verified following documents to confirm this
applicability condition.
1. Preventive and break down maintenance records for
both turbines since commissioning.
2. Six Monthly Inspection records performed by the
Turbine supplier GE for operational condition check.
3. Periodic Hot Section Overhaul maintenance reports
after completion of 25000running hours.
4. Break down reports and cost of breakdown
maintenance for both turbines during year 2007.
i.3 Does Project power units only uses ACM 0007 The open cycle power plant is found using only one fossil fuel OK
fuel types i.e. a) Fossil Fuels and /or b) i.e. Natural Gas since its Commissioning the same was
blends of fossil fuels and biofuels, where verified using Natural Gas supply Contract and report on Fuel
the biofuel is blended to the fossil fuel in Consumption since Commissioning.
a situation that is outside the control of
the project participants (such as Initial Design documents and The Process flow diagram of
regulatory requirement to blend biodiesel Open Cycle Power plant verified to confirm this condition.
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with diesel or biogas with natural gas)
during the most recent three years prior
to the project activity and during the
crediting period?
i.4Does the type(s) of fossil fuels used by the ACM 0007 Yes. OK OK
project power unit(s) during the crediting The same fossil fuel i.e. Natural Gas shall be used by the
period were also used during the most recent project power unit (Combined cycle Power Plant) and it is
three years prior to the implementation of the observed that the natural gas was used during most recent
project activity, except, where applicable, three year period ie. 2008 2010. Natural Gas consumption
any auxiliary fuel consumption (e.g. for start- records are maintained for last three years by the PP to
ups) which shall not exceed 3% of the total demonstrate compliance to this Condition.
fuel consumption in the unit(s) (measured on
an energy basis? Physical verifications were done during site visit and found
that there is no provision for the any other auxiliary fuel
consumption. PP has one emergency generator in case of
failure of grid, fuel for this generator is also natural gas. P&ID
Diagram of the baseline plant confirms that there is no
possibility of other fuel been used in baseline scenario.
i.5 Does project activity increases the lifetime ACM 0007 Implementation of project activity will not be resulting into the
of the existing gas turbines or engines during increase in lifetime of existing gas turbines or generators OK
the crediting period. during the crediting period of 10 years.
PP has calculated remaining life time of the existing CL 15

equipments using tool to calculate the remaining life time of Closed
eqipments version 01. According to the tool PP has utilized
default value from the table provided in the tool, which is
200,000 hours for Gas turbines, above 50 MW capacity.
PP has converted 200,000 hours to years and is Estimated
as 22 years.
Therefore Remaining life of the existing equipments is
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calculated a 22years 6 years of operations since 2006 = 16
years.
CL 15:
PP has applied tool to determine the remaining lifetime of
the equipment and utilized default value provided in the tool
to calculate remaining lifetime of baseline equipment, please
provide clear information how each condition mentioned in
the tool for utilizing default value is complied by the PP and
provide necessary evidences to confirm the same.
i.6 Whether the life time of the project ACM 0007 Yes, current version i.e version 01 of tool to calculate the OK OK
equipments is determined using remaining lifetime of equipment is used
approved tool i.e. Tool to determine the
remaining lifetime of equipment?
i.7 Does crediting period identified by the ACM 0007 Yes PP has identified 10 Years fixed Crediting period and OK OK
PP is in line with the remaining life time which is less than the calculated remaining life time of
of the project equipment determined existing equipments
using the approved tool as mentioned in
the approved methodology?
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b. Has the DOE applied specific guidance VVS 77 Yes OK OK
provided by the CDM Executive Board in According to ACM0007/Version 06.1.0
respect to the applicable approved
methodology?
c. Is the methodology correctly quoted? VVS 77 Yes OK OK
According to ACM0007/Version 06.1.0
d. Are the applicability conditions of the VVS 77 Yes Refer to 5.b.a.i.1 5.B.a.i 7 OK OK
methodology met?
i. Specific questions per methodology 77 Refer to 5.b.a.i.1 5.B.a.i 7 OK OK
regarding applicability conditions.
e. Is the proeject activity expected to result VVS 77 No. OK OK
in emissions other than those allowed by Project activity will only result in the CO2 emissions, there
the methodology? are no other emissions noticed.
f. Is the choice of the methodology VVS 77 Yes OK OK
justified?
g. Have the project participants shown that VVS 77 Refer to (5.b.d) above - OK
the project activity meets each of the
applicability conditions or the approved
methodology?
h. Have the project participants shown that VVS 77 Yes. OK OK
the project activity meets each of the
applicability conditions of any tool or
other methodology component referred
to the methodology?
i. Does PP uses correct version tools to Refer to CAR 3 CAR 3 OK
develop proposed CDM project Activity a Closed
prescribed by the Approved
Methodology.
i. Is the DOE, based on local and sectoral VVS 77 Yes OK OK
knowledge, aware that comparable
information is available from sources
other than that used in the PDD?
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j. If yes, was the PDD cross checked VVS 77 Yes. CL 11 OK
agains the other sources to confirm that - Gas Supply Contract with Gas supplier.
the project activity meets the applicability - Design documents for baseline open cycle power Closed
conditions of the methodology? (provide plant.
the reference to these choices) - Maintenance records
-
k. Can a determination regarding the VVS 77 Yes, The selected methodology found appropriate to the OK OK
applicability of the selected methodology proposed project activity based on the Validation of each
to the proposed CDM project activity be applicability condition prescribed by the Approved
made? methodology. Refer to 5.b.a.i.1 5.B.a.i 7
l. If no, clarification of the methodoloy was VVS 77 NA OK OK
requested, in accordance with the
guidance provided by the CDM Executive
Board?
m. If answer to (5.b.d) above is no, VVS 77 NA OK OK
revision or deviation from the
methodology was requested, in
accordance with the guidance provided
by the CDM Executive Board?
n. If yes to (5.b.l) and (5.b.m) above, a VVS 77 NA OK OK
request for registration was submited
before the CDM Executive Board has
approved the proposed deviation or
revision?
c. Project boundary
a. Does the PDD correctly describe the VVS 86 Yes OK OK
project boundary, including the physical The project boundary delineation is done as per the approved
delineation of the proposed CDM project methodology and the description is provided in the PDD
activity included within the project section B.3.
boundary for the purpose of calculating
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project and baseline emissions for the
i. Whether PP has identified project ACM 0007 Yes OK OK
boundary as defined in the Approved
Methodology?
ii. Does the project boundary include the ACM 0007 Yes PP has identified the project unit and all other Power OK OK
project power unit and all other power plants connected to the grid electricity system.
plants connected to the grid electricity To validate project boundary validation team has verified the
system? Grid structure and number of power plants connected to this
grid electricity system through Directorate General of
Electricity and Energy Utilization (DJLPE)
iii. Whether spacial extent of the project ACM 0007 PP has confirmed in PDD section B.3 that the Tool to OK OK
electricity system included issues calculate the emission factor for an electricity system is
related to the calculation of the build utilized to arrive at calculation of the Build margin, operating
margin and operating margin as margin and emission.
defined in Tool to calculate the
emission factor for an electric System Refer CAR 3 CAR 3 OK
Closed
iv. While determining project emissions ACM 0007 Yes. OK OK
does PP includes emission sources i.e. PP has considered both conditions i.e. a & b to calculate
a) CO2 emissions from on-site project emission using tool to calculate project or leakage
consumption of fossil fuels to operate emissions from Fossil fuel version 02.
the project power unit(s) and b) CO2
emission of fossil fuels, to supplement
the exhaust heat used to operate the
steam turbine?
v. While determining baseline emissions ACM 0007 PP has demonstrated Baseline emission calculation in PDD OK OK
does PP included emission sources i.e. section B.6.1, as per the description PP has adopted step by
a) CO2 emissions from fossil fuel fired step approach as defined in the Approved methodology and
power plants connected to the justified the applicability of Case C for determining the
electricity system as the project power Baseline emissions for proposed project activity.
units(s) and b) CO2 emissions from
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operation of the project power unit(s) in
single cycle mode?
vi. Does PDD demonstrates inclusion and ACM 0007 Yes. The information on the exclusion and inclusion emission OK OK
exclusion of emission sources from the sources from the project boundary has been provided in a
project boundary? Does PP has tabular manner in PDD section B.3
provided justification on the inclusion
and exclusion of all emission source
appropriately in the PDD?
b. Is the delineation in the PDD of the VVS 87 Yes OK OK
project boundary correct and include
identification of all locations, processes
and equipment including secondary
equipment and associated processes
such as logistics etc.?
c. Does the delineation in the PDD of the VVS 87 Yes OK OK
project boundary meet the requirements
of the selected baseline?
d. Have changes been made to the project VVS 87 No, there are no changes to Project boundary in comparison OK OK
boundary in comparison to the to the web hosted PDD.
webhosted PDD. If yes please comment
on the reason for the changes.
e. Have all sources and GHGs required by VVS 87 Only CO2 OK OK
the methodology been included within
the project boundary?
f. Does the methodology allow project VVS 87 NO OK OK
participant to choose whether a source or
gas is to be included within the project
boundary
g. If yes, have the project participants VVS 87 NA OK OK
justified that choice?
h. If yes, is the justification provided VVS 87 NA OK OK
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reasonable? (provide reference to the
supporting documented evidence
provided by the project participants)
d. Baseline identification
a. Does the PDD identify the baseline for VVS 94 Yes. OK OK
the proposed CDM project activity, PP has identified correct baseline scenario as prescribed by
defined as the scenario that reasonably the approved methodology and has followed the Combined
represents the anthropogenic emissions tool to identify the baseline scenario and demonstrate
by sources of GHGs that would occur in additionality to identify the most plausible baseline scenario
the absence of the proposed CDM as quoted in ACM007 Version 6.1.0
project activity?
b. Has any procedure contained in the VVS 94 Refer to CAR 3 CAR 3 OK
methodology to identify the most Closed
reasonable baseline scenario, been
correctly applied?
b.1 Does PP has demonstrated in the PDD that the ACM 0007 Yes. PP has demonstrated that the baseline scenario is the OK OK
baseline scenario is the continuation of the continuation of the current practice i.e. operation of single
current practice, i.e. that the absence of the cycle power plant.
proposed project activity the electricity, to
meet the demand in the grid system, will be
generated (1) by the operation of the project
power unit (s) in single cycle mode (2) by the
operation of existing grid connected power
plant, and (3) by the addition of new
generation sources to the grid?
b.2 Does Project participants uses the latest ACM 0007 NO CAR 3 OK
approved version of the .Combined tool to CAR 3:
identify the baseline scenario and Closed
PDD Section B.1 refers to the tools used by PP to develop
demonstrate additionality to demonstrate
this proposed Large Scale CDM Project, however the PP has
additionality and identify the most plausible
not used current revision of tools i.e. Combined tool to
baseline scenario?
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identify the baseline scenario and demonstrate additionality
(version 3.0.0 is used / current version is 5.0.0) and Tool to
calculate the emission factor for an electricity System
(Version 2.2.1 is used / current version is 3.0.0)
b.3 Whether PP has identified most plausible ACM 0007 Yes. OK OK

baseline scenario considering following three PP Identified Two most plausible baseline scenarios as per
alternatives (a) Proposed project activity the conditions prescribed by the approved methodology and
undertaken without being registered as a these plausible alternatives are listed as below
CDM project activity;(b) Continuation of the 1. Proposed project activity undertaken without being
current practice (to not implementing the registered as a CDM Project Activity.
project activity);(c) If applicable the 2. Continuation of current practice (not to implement the
.proposed project activity undertaken without project activity)
being registered as a CDM project activity.
Undertaken at a later point in time (e.g. due
to existing regulations, end-of-life of existing
equipment, financing aspects).
b.4 Does future estimated load factor is ACM 0007 CAR 4: CAR 4 OK
reflecting the changes due to new conditions
PDD does not demonstrate how Methodology condition
in the grid When the current practice Closed
pertaining to selection of baseline scenario and the
condition (to continue the operation in open
demonstration of additionality is fulfilled specifically when the
cycle) is assessed?
current practice condition (to continue the operation in open
cycle) is assessed, the future estimated load factor should
reflect the changes due to new conditions in the grid.
b.5 Does revenue generated from the possible ACM 0007 Yes OK OK
increase in electricity produced from the
open cycle component in the project situation
is considered by the PP while undertaking
investment analysis to demonstrate
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Additionality?
b.6 Does PP demonstrate additionality using ACM 0007 Yes OK OK

common practice analysis?
b.7 IF yes whether following conditions are Yes PP has demonstrated that all three conditions prescribed OK OK
fulfilled by the PP in the Approved methodology are satisfied and the
i. Similar activities to the project information used to arrive at conclusion that project is not a
activity shall mean all single cycle common practice in region found transparently presented in
and combined cycle power plants the PDD.
that have an installed capacity
within a range of 50% of the The Information obtained to justify that the project is not a
project power plant and that are common practice in the given geographical area i.e, host
using one the fossil fuel types used country Indonesia is from the authentic source i.e. World
by the project power unit(s) (except Electric Power plant data base (www.platts.com)
start-up and auxiliary fuels)
ii. Relevant geographical area shall in
principle be the host country of the
proposed CDM project activity. A
region within the country could be
the relevant geographical area if the
framework conditions vary
significantly within the country.
However, the relevant geographical
area should include preferably ten or
more such power plants. If less than
ten power plants are found in the
region the geographical area may be
expanded to an area that covers, if
possible, ten such power plants
within the national grid boundary. In
cases where this definition of
geographical area is not suitable, the
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project participants should provide
an alternative definition of
geographical area.
iii. The project activity is regarded
common practice if more than 50%
of the assessed power plants operate
in combined cycle mode. A power
plant is considered to operate in
combined cycle mode if any of its
units operate in combined cycle
mode.
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c. Does the selected methodology require VVS 94 Yes OK OK
use of tools (such as the Tool for the Refer to Combined tool to identify the baseline scenario and
demonstration and assessment of demonstrate additonality
additionality and the Combined tool to
identify the baseline scenario and
demonstrate additionality) to establish
the baseline scenario?
d. If yes, was the methodology consulted on VVS 94 Yes OK OK
the application of these tools? (In such 4 tools mentioned in ACM0007 Version 6.1.0
cases, the guidance in the methodology 1) Combined tool to identify the baseline scenario and
shall supersede the tool.) demonstrate additionality
2) Tool to calculate project or leakage CO2 emissions from
fossil fuel combustion
3) tool to calculate the emission factor for an electricity
system
4) tool to determine the remaining lifetime of equipment
i. Specific questions per methodology Refer D.b.1-D.b.1 OK OK
regarding application of tools to
establish the most reasonable baseline
scenario.
e. Does the methodology require several VVS 95 Yes based on the combined tool to identify the baseline OK OK
alternative scenarios to be considered in scenario and demonstrate additionality
the identification of the most reasonable
baseline scenario?
f. If yes, are all scenarios that are VVS 95 Yes. OK OK
considered by the project participants PP has identified totally 6 alternatives of baseline scenarios
and are supplementary to those required as listed below
by the methodology reasonable in the 1. Proposed project activity undertaken without being
context of the proposed CDM project registerd as a CDM Project activity
activity? 2. Continuation of the current practice (Not to implement
project activity)
3. The Propose project activity undertaken without
being registers as a CDM project activity undertaken
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at later point in time.
4. Coal Fired power plant with installed capacity equal
to proposed project activity.
5. Oil fired power plant with installed capacity equal to
6. Renewable power plant with the installed capacity
equal to proposed project activity.
All thes scenarios presented by the PP in PDD are found

relevant and reasonable in the context of the proposed CDM
Project activity. As the fuel required for al scenarios is found
available in the region.
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g. Has any reasonable alternative scenario VVS 94 Yes OK OK
been excluded?
h. Is the baseline scenario identified VVS 95 Yes OK OK
reasonably supported by:
i. Assumptions? VVS 95 Yes OK OK
ii. Calculations? VVS 95 Yes OK OK
iii. Rationales? VVS 95 Yes OK OK
i. Are the documents and sources referred VVS 95 Yes OK OK
to in the PDD correctly quoted and
interpreted?
j. Was the information provided in the PDD VVS 95 Yes OK OK
cross checked with other verifiable and
credible sources, such as local expert
opinion, if available? (idendify the
sources)
k. Have all applicable CDM requirements VVS 95 Yes OK OK
been taken into account in the
identification of the baseline scenario for
the proposed CDM project activity?
l. Have all relevant policies and VVS 95 Yes OK OK
circumstances been identified and Indonesian Power Policy is considered in the According to
correctly considered in the PDD, in ACM0007 Version 6.1.0
accordance with the guidance by the
CDM Executive Board?
m. Does the PDD provide a verifiable VVS 95 Yes clearly stated in section B.4 OK OK
description of the identified baseline
scenario, including a description of the
technology that would be employed
and/or the activities that would take place
in the absence of the proposed CDM
project activity?
e. Algorithms and/or formulae used
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to determine emission reductions
a. Do the steps taken and equations VVS 99 Yes. OK OK
applied to calculate project emissions, PP has demonstrated how equations applied to calculate
baseline emissions, leakage and project emissions, baseline emissions, leakage and emission
emission reductions comply with the reductions based on the selected approved methodology and
requirements of the selected baseline the same is transparently described in the PDD section B.6.1
and monitoring?
b. Have the equations and parameters in VVS 99 Yes. OK OK
the PDD been correctly applied with PP has demonstrated it in PDD section b.6
respect those in the selected approved
methodology?
b.1 Do the steps taken and equations ACM 007 Yes the transparent description is provided by pp in PDD OK OK
applied to calculate project emissions, section B.6.
baseline emissions, leakage and
emission reductions comply with the
requirements of the selected baseline
and monitoring?
b.2 Have the equations and ACM 007 Yes Equations applied in PDD section B.6 are found correct OK OK
parameters in the PDD been correctly
applied with respect those in the select
approved methodology?
b.3 Is the base line emission ACM 007 Yes. OK OK

calculations done using step by step PP has selected Case 3 to arrive at Baseline emission
approach recommended by the calculations as the quantity of electricity generated in the
approved methodology. project power unit, adjusted for changes to efficiency
EGPJ,adj,y exceeds the maximum annual quantity of
electricity that the project power unit could have produced
prior to the implementation of the project activity (EGmax)
i.e. Operating 110 MW CCGT power plant at the planned
85% availability factor is equivalent to 93.5 MW, which is
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more than the existing capacity of 80 MW (baseline scenario)
Hence PP has applied equation
BE y EG BL , AVR EFCO 2, BL , y ( EG MAX EG BL , AVR ) min( EFCO 2, BL ; EFgrid , y )

( EG PJ ,adj , y EG MAX ) EFgrid , y
Where:
BEy - Baseline emissions in year y (tCO2/yr)
EGPJ,adj,y - Quantity of electricity supplied by all project
power units to the electricity grid in year y,
adjusted for changes to efficiency (MWh/yr)
EGBL,AVR - Average annual quantity of electricity supplied by
all project power units to the electricity grid
during the defined operational history (MWh/yr)
EGMAX - Maximum annual quantity of electricity that could
be generated by all project power units in the
baseline scenario (MWh/yr)
EFCO2,BL - Baseline emission factor of all project power units
operated in single cycle mode (tCO2/MWh)
EFgrid,y - Emission factor of the electricity grid to which the
project power unit is connected (tCO2/MWh)
b.4 whether PP has justified the ACM 007 Yes. OK OK
selected scenarios to determine PP select Case 3 for arriving at the Baseline emissions and
baseline emission calculations the choice justified in the PDD section B.6 of PDD
b.5 The formulae used to determine ACM 007 Yes Baseline emissions calculated by PP found correct OK OK
baseline emissions are correctly
applied and baseline emissions
calculated are correct?
b.6 Estimation of emissions factor for ACM 007 Yes OK OK

electricity generated in single cycle PP has used equation as prescribed in the Approved
mode in the baseline(EFCO2,BL) is methodology
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done correctly using historical 3
performance data FC i,x NCVi , x
EFCO 2, BL x 1 i
3
EFCO 2,min
EG x
x 1
Where
EFCO2,BL - CO2 emission factor for electricity generated in
single cycle mode in the baseline (tCO2/MWh)
FCi,x - Quantity of fuel type i used by the project
power unit(s) in year x (mass or volume unit/yr)
NCVi,x - Net calorific value of the fuel type i used by the
project power unit(s) in year x (GJ/mass or
volume unit )
EFCO2,min - CO2 emission factor of the least carbon
intensive fuel type used by the project power
unit(s) during the three years operational
history (tCO2/GJ)
EGx - Quantity of electricity supplied by the project
power unit(s) with three years operational
history and no retrofit in this period, to the
electricity grid in year x (MWh/yr)
PP has utilized historical performance data of last three years

especially quantity of fuel used by the power unit in year 2008
to 2010. Weighted average value of 138548546.3 M3/year.
Validation team has validated all values utilized to estimate
emission factor for electricity generated in the baseline and
found that these values are obtained from Plant operation
data and Monthly and annual reports of the Power plant.
b.7 Determination of emissions factor ACM 007 CAR 5: CAR 5 OK
for the grid electricity system PDD Section B.6.1 Explanation of methodological choices Closed
(EFgrid,y)is done as Combined Margin refers to the determination of the emission factor for the grid
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emission factor using Tool to electricity system (EFgrid.y) using tool to calculate the
Calculate emission factor for an electric emission factor for an electricity system; however the step by
System? step approach prescribed by the tool to arrive at EFgrid.y is
not demonstrated transparently in the PDD.
b.8 Does Project participant uses ACM 007 Refer CAR 5 CAR 5 OK
dispatch data analysis method to Closed
calculate emission factor using Tool to
calculate emission factor for an electric
system?
b.9 If Yes then relevant modifications ACM 007 Refer CAR 5 CAR 5 OK
to the calculations are applied as Closed
recommended by the approved
methodology?
b.10 Are the leakage calculations ACM 007 Yes the description on Leakage calculation found OK OK
documented according to the approved transparently mentioned in the PDD section B.6.1 under
methodology and in a complete and leakage emissions
transparent manner?
PP has utilized prescribed equation as per the approved
methodology
LE y LE upstream, y LE HR, y
Where:
LEy - Leakage emissions in year y (tCO2e/yr)
LEupstream,y - Leakage emissions associated with the upstream
emissions of an increase in fossil fuel use in the
project activity in year y (tCO2e/yr)
LEHR,y - Leakage emissions due to a decrease in the amount
of heat recovered from exhaust heat for purposes
other than power generation in the project,
compared to the most recent year prior to the
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implementation of the project activity, in year y
(tCO2e/yr)
As emissions associated with the situation that exhaust waste

heat was not recovered prior to the project implementation,
therefor this scenario is not applicable for the leakage
emission calculation and hence PP has considered LEHR.y =
0.
Hence the above equation is changed to

LE y LE upstream, y
b.11 Have conservative assumptions ACM 007 Yes. OK OK
been used when calculating the PP has utilized IPCC Default value for the Emission factor for
leakage emissions? upstream fugitive methane from production, transportation,
distribution of fossil fuel used by the project power unit in year
y. the value applied was 296 tCH4/PJ.
Assumptions to calculate Leakage emission found

conservative as the quantity of fuel consumed in the year and
NCV of natural gas has been obtained from the historical
plant performance data,
b.12 Are uncertainties in the leakage ACM 007 There is no uncertainty identified in the calculation of the OK OK
emission estimates properly Leakage emissions.
addressed?
b.13 Does the methodology provide for ACM 007 Yes. PP has selected appropriate equations and parameters OK OK
selection between different options for and it is demonstrated transparently in the PDD Section B.6.2
equations or parameters?
b.14 If yes, has adequate justification ACM 007 Yes OK OK

been provided (based on the choice of
the baseline b.15 scenario, context of
the proposed CDM project activity and
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other evidence provided)?
b.16 If yes, have correct equations and ACM 007 Yes OK OK

parameters been used, in accordance
with the methodology selected?
b.17 Will data and parameters be ACM 007 The description on the monitoring of data and parameters OK OK
monitored throughout the crediting monitored throughout the crediting period is provided in the
period of the proposed CDM project PDD Section B.7.1 and those parameters and data which will
activity? not be monitored throughout the crediting period are provided
in the PDD section B.6.2
b.18 If no, and these data and ACM 007 The description on those parameters and data which will not OK
parameters will remain fixed be monitored throughout the crediting period are provided in OK
throughout the crediting period, are all the PDD section B.6.2
data sources and assumptions:
i.Appropriate and correct? CAR 7:
ii.Applicable to the proposed CDM
PP uses tool to calculate the emission factor for an electricity
project activity? CAR 7 OK
system, however relevant data and parameters
iii.Resulting in a conservative estimate Closed
recommended by the tool are not found included in the PDD
of the emission reductions?
section B.6.2.
b.19 Will data and parameters be ACM 007 No, There are few Data and parameters used for arriving at CAR 7
monitored on implementation and project emissions, baseline emissions, leakage emissions are Closed
hence become available only after found available at the time of validation of the project activity,
validation of the project activity? These data and parameters are found partially provided in
the PDD section B.6.2
Refer CAR 7
b.20 If yes, are the estimates provided ACM 007 Refer CAR 7 CAR 7
in the PDD for these data and Closed
parameters reasonable?
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c. Does the methodology provide for VVS 99 Yes PP has clearly described the selection between different OK OK
selection between different options for option for equations or parameters in PDD section B.6.1
equations or parameters?
d. If yes, has adequate justification been VVS 99 Yes Please refer 5.e.b.1 5.e.b.20 above OK OK
provided (based on the choice of the
baseline scenario, context of the
proposed CDM project activity and other
evidence provided)?
e. If yes, have correct equations and VVS 99 Refer to (5.e.b) above - -
parameters been used, in accordance
with the methodology selected?
f. Will data and parameters be monitored VVS 100 Refer 5.e.b.17 to 5.e.b.20 above OK OK
throughout the crediting period of the
g. If no, and these data and parameters will VVS 100 Refer CAR 7 CAR 7 K
remain fixed throughout the crediting Closed
period, are all data sources and
assumptions:
i. Appropriate and correct? VVS 100 Refer CAR 7 CAR 7 OK
Closed
ii. Applicable to the proposed CDM VVS 100 Refer CAR 7 CAR 7 OK
project activity? Closed
iii. Resulting in a conservative estimate of VVS 100 Refer CAR 7 CAR 7 OK
the emission reductions? Closed
h. Will data and parameters be monitored VVS 100 No Refer 5.e.b.17 to 5.e.b.20 OK OK
on implementation and hence become
available only after validation of the
project activity?
i. If yes, are the estimates provided in the VVS 100 Refer 5.e.b.17 to 5.e.b.20 OK OK
PDD for these data and parameters
reasonable?
6. Additionality of a project activity
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a. Does the PDD describe how a proposed VVS 94 Yes OK OK
CDM projet activity is additional? PP has demonstrated the project additionality using
Combined tool to identify the baseline scenario and
demonstrate additionality
PP has demonstrated the project additionality using Financial

Analysis, where E-IRR is calculated and compared with the
Default bench mark value obtained from Annex I of Guideline
on assessment of investment analysis.
b. Were the following steps of the tool to EB 39 Ann

assess additionality used: 10
i. Identification of alternatives to the EB 39 Ann Yes OK OK
project activity? 10 PP has identified alternative scenarios which can be the
baseline scenario using Combined tool to identify the
baseline scenarios and demonstrate additionality version
3.0.0.
As per the Tool PP demonstrates that there are 6 alternative
scenarios are possible following tool condition 1a: define
alternative scenarios to the proposed CDM project activities
and PP has further analysed these identified alternative to
arrive at most plausible alternatives demonstrated that 02
most plausible alternatives are in line with the local
regulations governing Indonesian power sector using tool
condition 1b: consistency with mandatory applicable laws and
regulations.
As per the Presidential Decree power generation using

natural gas is in line with the national regulation and policies.
ii. Investment analysis to determine that EB 39 Ann Yes OK OK

the proposed project activity is either: 10 PP has done Investment analysis to determine whether the
1) not the most economically or CDM project is not the most economically or financially
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financially attractive, or 2) not attractive without being registered as CDM project activity.
economically or financially feasible?
iii. Barriers analysis? EB 39 Ann Yes OK OK
10 PP has utilized Investment Barrier to demonstrate that the
project is additional.
iv. Common practice analysis? EB 39 Ann Yes. OK OK
10 PP has presented the common practice analysis in
accordance with Approved methodology, where PP
considers all single cycle and combined cycle power plants
that have been an installed capacity within the range of +/-
50% of the power plant and that are using one of the fossil
fuel type i.e. Natural Gas used by the project power unit in a
host country as geographical area.
A list of single and combined gas based power plant in

capacity range of 55 MW 165 MW operating in Indonesia is
presented in the PDD. The source of information is
documented in the PDD, which is validated by the validation
team and found relevant, the source of information mentioned
is World Electric Power Plants Data Base from PLATT
(www.platt.com).
From the Analysis it is clear that only four combined cycle
plants are in operation in host country in the selected
capacity range of 55 MW 165 MW and which is accounted
to 21%, which is much lesser that the 50% threshold value
established by the Approved methodology as an important
criteria to demonstrate that the project is not a common
practice in the given geographic area i.e. Host country
Indonesia.
c. In step 1 (i) have all the sub-steps as EB 39 Ann
below been followed? 10
i. Sub-step 1a: Define alternatives to the EB 39 Ann Yes. PP has identified 6 alternatives which are possible. OK OK
project activity 10
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ii. Sub-step 1b: Consistency with EB 39 Ann Yes. 2 were identified as the most plausible baseline scenario OK OK
mandatory laws and regulations 10 and verified that these baseline scenarios are in compliance
with the countrys law and regulation. Please refer 6.b.i above
d. Have the following alternatives been EB 39 Ann
included while defining alternatives as 10
per sub-step 1a?
i. (a) The proposed project activity EB 39 Ann Yes, it has been considered OK OK
undertaken without being registered as 10
a CDM project activity;
ii. (b) Other realistic and credible EB 39 Ann Total 6 alternatives have been considered including the OK OK
alternative scenario(s) to the proposed 10 proposed project activity undertaken without being registered
CDM project activity scenario that as a CDM project activity
deliver outputs services or services
with comparable quality, properties and
application areas, taking into account,
where relevant, examples of scenarios
identified in the underlying
methodology;
iii. (c) If applicable, continuation of the EB 39 Ann Continuation of the current situation also considered as one OK OK
current situation (no project activity or 10 of the 6 alternatives
other alternatives undertaken).
e. Has the project participant included the EB 39 Ann Yes other technologies have been considered i.e coal fired OK OK
technologies or practices that provide 10 power plant, oil fired power plants and renewable power
outputs or services with comparable plants
quality, properties and application areas
as the proposed CDM project activity and
that have been implemented previously
or are currently being introduced in the
relevant country/region?
f. Has the outcome of Step 1a: Identified EB 39 Ann Yes. Two alternatives have been identified out of the 6 OK OK
realistic and credible alternative 10 alternatives. The most plausible alternatives were alternative
scenario(s) to the project activity done 1 & 2.
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correctly? Please briefly mention the Outcome of Step 1a is defined in the PDD section B.4 in a
outcome. tabular manner and these alternative are listed as below
Alternative 1: proposed project activity undertaken without
begin registered as a CDM project activity
Alternative 2; Continuation of the current practice (not

implementing the project activity)
g. Is the alternative(s) in compliance with all EB 39 Ann Yes, both alternatives have been assessed to check whether OK OK
mandatory applicable legal and 10 they are in compliance with countrys laws and regulation and
regulatory requirements, even if these both were in compliance. Please Refer 6.b.i
laws and regulations have objectives
other than GHG reductions, e.g. to
mitigate local air pollution.?
h. If an alternative does not comply with all EB 39 Ann NA NA NA
mandatory applicable legislation and 10
regulations, has it been shown that,
based on an examination of current
practice in the country or region in which
the law or regulation applies, those
applicable legal or regulatory
requirements are systematically not
enforced and that noncompliance with
those requirements is widespread in the
country?
i. Has the outcome of Step 1b: Identified EB 39 Ann Yes OK OK
realistic and credible alternative 10 Both alternatives have checked against the Indonesian legal
scenario(s) to the project activity that are laws and regulation and it is concluded that no legal
in compliance with mandatory legislation requirement prevents implementation of both identified
and regulations taking into account the alternatives by the PP and hence both are complying local
enforcement in the region or country and laws and regulations governing Indonesian Power sector.
EB decisions on national and/or sectoral
policies and regulations done correctly?
Please state the outcome.
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j. Has PP selected Step 2 (Barrier EB 39 Ann PP has selected Both Steps 2 and Step 3, however only OK OK
Analysis) or Step 3 (Investment Analysis) 10 Investment barrier is the main barrier identified by the PP.
or both Steps 2 and 3?
Investment Analysis is done using E-IRR method and is
demonstrated in the PDD appropriately.
k. In step 2, have all the sub-steps as below EB 39 Ann
been followed? 10
i. Sub-step 2a: Determine appropriate EB 39 Ann Yes OK OK
analysis method; 10
ii. Sub-step 2b: Option I. Apply simple EB 39 Ann NA NA NA
cost analysis; 10
iii. Sub-step 2b: Option II. Apply EB 39 Ann Yes OK OK
investment comparison analysis; 10
iv. Sub-step 2b: Option III. Apply EB 39 Ann No, To compare E-IRR PP has used Default benchmark OK OK
benchmark analysis; 10 value of 12.5% for the country in the project of Group 1 as
prescribed by Appendix A of Guideline on the assessment of
investment analysis EB 62 Annex 5 , Version 5
v. Sub-step 2c: Calculation and EB 39 Ann E-IRR (Equity Internal Rate of Return ) or return on Equity OK OK
comparison of financial indicators (only 10 (ROE) is selected as the financial indicator
applicable to Options II and III);
vi. Sub-step 2d: Sensitivity analysis (only EB 39 Ann Yes sensitivity analysis on capital expenditure, electricity OK OK
applicable to Options II and III). 10 tariff, amount of electricity supplied to the grid, gas costs/
price and operational expense has been performed by the PP
to check changes in the E-IRR calculated by subjecting
above identified Key Project indicators to +/- 5% to +/- 10
%variations.
l. In sub-step 2a has the determination of EB 39 Ann
appropraite method of analysis done as 10
per the guidance as below?
i. Simple cost analysis if the CDM project EB 39 Ann NA OK OK
activity and the alternatives identified in 10
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Step 1 generate no financial or
economic benefits other than CDM
related income (Option I).
ii. Otherwise, use the investment EB 39 Ann Benchmark Analysis is used by the PP. PP has calculated E- OK OK
comparison analysis (Option II) or the 10 IRR. To compare E-IRR PP has used Default benchmark
benchmark analysis (Option III). value of 12.5% for the country in the project of Group 1 as
Specify option used with justification. prescribed by Appendix A of Guideline on the assessment of
investment analysis EB 62 Annex 05. , Versioin 5.
m. Has the below guideline followed for sub- EB 39 Ann NA OK OK
step 2b Option I. Apply simple cost 10
analysis? Document the costs associated
with the CDM project activity and the
alternatives identified in Step1 and
demonstrate that there is at least one
alternative which is less costly than the
project activity.
n. Has the below guideline followed for sub- EB 39 Ann NA OK OK
step 2b Option II. Apply investment 10
comparison analysis? Identify the
financial indicator, such as IRR, NPV,
cost benefit ratio, or unit cost of service
most suitable for the project type and
decision-making context. Please specify
o. Has the below guideline followed for EB 39 Ann
Sub-step 2b: Option III. Apply benchmark 10
analysis?
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i. Identify the financial/economic EB 39 Ann Yes PP has described the selection of Financial indicator OK OK
indicator, such as IRR, most suitable 10 which is most suitable for the project type and decision
for the project type and decision context in PDD section B.5.
context.
PP has Identified the E-IRR (Equity Internal Rate of Return)
as an financial indicator, which is found most appropriate to
demonstrate financial comparison for said project.
ii. When applying Option II or Option III, EB 39 Ann Yes PP has opted to carry out Benchmark analysis as OK OK
the financial/economic analysis shall 10 prescribed under option III and PP has selected E-IRR as the
be based on parameters that are financial indicator which in accordance with the EB guideline
standard in the market, considering the EB 62 Annex 5 Version 5.
specific characteristics of the project
type, but not linked to the subjective PP has considered standard market values for the
profitability expectation or risk profile of parameters to arrive at E-IRR Calculations. The justification
a particular project developer. Only in for the utilization of these values has been provided in the
the particular case where the project spread sheet, which is found transparent and correct.
activity can be implemented by the
project participant, the specific
financial/economic situation of the
company undertaking the project
activity can be considered.
iii. Discount rates and benchmarks shall EB 39 Ann PP has utilized default benchmark value 12.5 % as OK
be derived from: (a) Government bond 10 prescribed by the Appendix A of EB 62 Annex 5, version 5.
rates, increased by a suitable risk
premium to reflect private investment The project participant has chosen Default value for the
and/or the project type, as expected return on equity as per the Appendix A of EB 62
substantiated by an independent Annex 05. The default value selected by Project participant is
(financial) expert or documented by 12.5% under Group 1 for host country Indonesia. This value
official publicly available financial data; is classified under Ba2 category of Moodys Risk Rating for
(b) Estimates of the cost of financing bonds.
and required return on capital (e.g.
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commercial lending rates and The selection of default value is appropriate as there is no
guarantees required for the country external funding is utilized for this project, project participant
and the type of project activity has utilized internal equity and Loan from the bank to finance
concerned), based on bankers views the project.
and private equity investors/funds
required return on comparable Hence the validation team was of the view that the expected
projects; (c) A company internal return of 12.5% from the project was commensurate with the
benchmark (weighted average capital risk involved in the Group 1 project activity under sectoral
cost of the company), only in the Scope 1. Thus, the benchmark determined for the project
particular case referred to above in 2. activity (12.5%) was found in line with EB 62, Annex 05.
The project developers shall
demonstrate that this benchmark has
been consistently used in the past, i.e.
that project activities under similar
conditions developed by the same
company used the same benchmark;
(d) Government/official approved
benchmark where such benchmarks
are used for investment decisions; (e)
Any other indicators, if the project
participants can demonstrate that the
above Options are not applicable and
their indicator is appropriately justified.
Please specify benchmark and justify.
p. Has the below guideline followed for EB 39 Ann
Sub-step 2c: Calculation and comparison 10
of financial indicators (only applicable to
Options II and III)?
i. Calculate the suitable financial EB 39 Ann Yes PP has opted Option III to perform Beenchmark analysis CL 22 & OK
indicator for the proposed CDM project 10 and selected E-IRR as the financial indicator for this project. CL 23
activity and, in the case of Option II
above, for the other alternatives. PP has included relevant cost heads to perform the Closed
Include all relevant costs (including, for investment analysis ie.
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example, the investment cost, the - EPC & Equipment Cost
operations and maintenance costs), - Construction Cost
and revenues (excluding CER - Operation and maintenance cost
revenues, but possibly including inter - Gas price
alia subsidies/fiscal incentives, ODA, - Power Tariff
etc, where applicable), and, as - Interest Rate on Bank loan
appropriate, non-market cost and
benefits in the case of public investors These values are transparently presented in the Spread
if this is standard practice for the sheet and made available for validation.
selection of public investments in the
host country. CL 22 & CL23
ii. Present the investment analysis in a EB 39 Ann Yes. PP has presented investment analysis in transparent OK OK
transparent manner and provide all the 10 manner using Spread sheet and all assumptions are found
relevant assumptions, preferably in the correct.
CDM-PDD, or in separate annexes to
the CDM-PDD.
iii. Justify and/or cite assumptions. EB 39 Ann Yes. Justification for the assumptions used in the investment OK OK
10 analysis is found provided in the Spread sheet.
iv. In calculating the financial/economic EB 39 Ann Yes PP has provided cash flow pattern which is presented in OK OK
indicator, the projects risks can be 10 the spreadsheet in transparent manner.
included through the cash flow pattern,
subject to project-specific expectations
and assumptions.
v. Assumptions and input data for the EB 39 Ann CL 16: CL 16 OK
investment analysis shall not differ 10 Closed
During site visit Financial Additionality Spread sheet was
across the project activity and its
discussed and found that the pretax IRR mentioned in PDD
alternatives, unless differences can be
was 6.26% and the pre tax IRR in the Spread sheet was
well substantiated.
8.34%. Please justify why there a discrepancy in the IRR
value presented in the PDD for validation.
Also it was found that gas price used in the spread sheet is
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different from that value presented in the web hosted PDD
please provide clear and transparent justification for this
change in the gas price.
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vi. Present in the CDM-PDD a clear EB 39 Ann NA OK OK
comparison of the financial indicator for 10
the proposed CDM activity.Please
specify details for above.
q. Has the below guideline followed for EB 39 Ann Yes sensitivity analysis done on key parameters / OK
Sub-step 2d: Sensitivity analysis (only 10 assumptions that affect the E-IRR of the project: capital
applicable to Options II and III)? Include expenditure, electricity tariff, amount of electricity supplied to
a sensitivity analysis that shows whether the grid, gas costs/ price and operational expense.
the conclusion regarding the
financial/economic attractiveness is Power purchase agreement dated on 4th May 2007 shows 20
robust to reasonable variations in the years as contract period and calculation of various important CL 9 OK
critical assumptions. operational parameters ie. MHL / SO, AFp, Capacity payment Closed
equation, partial heat rate, cCR, FORM, ECR and CCRT are
based on the existing (Pre project scenario) capacity of
power plant ie. 80 MW. How change in the Capacity of the
power plant in the project scenario addresses these
calculation is not clear.
r. Has the outcome of Step 2 clearly EB 39 Ann To be confirmed
mentioned with justification? 10
s. In step 3: Barrier analysis have all the EB 39 Ann
sub-steps as below been followed? 10
i. Sub-step 3a: Identify barriers that EB 39 Ann 3 types of barriers: Investment barrier, technological barrier OK OK
would prevent the implementation of 10 and lack of prevailing practice.
the proposed CDM project activity; Only investment barrier is the barrier to the CDM project
activity.
ii. Sub-step 3 b: Show that the identified EB 39 Ann Identified the proposed project activity (alternative 1) does OK OK
barriers would not prevent the 10 face an investment barrier but not for the continuation of the
implementation of at least one of the current scenario (alternative 2) which do no requires no
alternatives (except the proposed investment.
project activity).
t. Has the below guideline followed for EB 39 Ann Yes OK OK
Sub-step 3a: Identify barriers that would 10
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prevent the implementation of the
proposed CDM project?
i. (a) Investment barriers: For EB 39 Ann Yes PP has demonstrated that the Project activity faces an OK OK
alternatives undertaken and operated 10 investment barrier if it is not considered for CDM registration.
by private entities: Similar activities This is clearly defined in the PDD section B.4 under step 2
have only been implemented with Barrier Analysis.
grants or other non-commercial finance
terms. No private capital is available Detailed Investment analysis is presented in the PDD Section
from domestic or international capital B.5 using E-IRR as an financial indicator.
markets due to real or perceived risks
associated with investment in the
country where the proposed CDM
project activity is to be implemented, as
demonstrated by the credit rating of the
country or other country investments
reports of reputed origin.
ii. (b) Technological barriers: Skilled EB 39 Ann There is no major technological barriers that face the OK OK
and/or properly trained labour to 10 proposed project activity as the technology is available in the
operate and maintain the technology is market.
not available in the relevant
country/region, which leads to an
unacceptably high risk of equipment
disrepair and malfunctioning or other
underperformance; Lack of
infrastructure for implementation and
logistics for maintenance of the
technology, Risk of technological
failure: the process/technology failure
risk in the local circumstances is
significantly greater than for other
technologies that provide services or
outputs comparable to those of the
proposed CDM project activity, as
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demonstrated by relevant scientific
literature or technology manufacturer
information, The particular technology
used in the proposed project activity is
not available in the relevant region.
iii. (c) Barriers due to prevailing practice: EB 39 Ann There is no lack of prevailing practice as there is several OK OK
The project activity is the first of its 10 existing grid connected combined cycle power plants in
kind. operation in Indonesia.
iv. (d) Other barriers, preferably specified EB 39 Ann NA OK OK
in the underlying methodology as 10
examples.
u. Has the outcome from Step 3a clearly EB 39 Ann Yes. OK OK
mentioned in PDD? 10 PP has selected E- IRR as the Financial indicator to carry out
Benchmark analysis and Sensitivity analysis results are found
documented in the PDD Section B.5
PP has done sensitivity analysis on capex, tariff, Availability

Factor, gas costs/ price and O&M expense has been
performed by the PP to check changes in the E-IRR
calculated by subjecting above identified Key Project
indicators to +/- 5% to +/- 10 %variations.
To demonstrate that the variations in key project parameters
is not resulting in the surpassing of the Selected bench mark
at any given point of time.
v. Has the below guideline followed for EB 39 Ann Identified the proposed project activity (alternative 1) does OK OK
Sub-step 3 b: Show that the identified 10 face an investment barrier but not for the continuation of the
barriers would not prevent the current scenario (alternative 2) which do no requires no
implementation of at least one of the investment.
alternatives (except the proposed project
activity)?
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i. If the identified barriers also affect EB 39 Ann NA OK OK
other alternatives, explain how they are 10
affected less strongly than they affect
the proposed CDM project activity. In
other words, demonstrate that the
identified barriers do not prevent the
implementation of at least one of the
alternatives. Any alternative that would
be prevented by the barriers identified
in Sub-step 3a is not a viable
alternative, and shall be eliminated
from consideration.
ii. Provide transparent and documented EB 39 Ann Yes PP has provided the transparent information in the PDD OK OK
evidence, and offer conservative 10 section B.4 and B.5
interpretations of this documented
evidence, as to how it demonstrates
the existence and significance of the
identified barriers and whether
alternatives are prevented by these
barriers.
iii. The type of evidence to be provided EB 39 Ann PP has demonstrated the same using relevant Legislation OK OK
should include at least one of the 10 information and confirmed that barriers are real and there are
following: (a) Relevant legislation, no possibilities that identified alternative are prevented by
regulatory information or industry these barriers.
norms; (b) Relevant (sectoral) studies
or surveys (e.g. market surveys,
technology studies, etc) undertaken by
universities, research institutions,
industry associations, companies,
bilateral/multilateral institutions, etc; (c)
Relevant statistical data from national
or international statistics; (d)
Documentation of relevant market data
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(e.g. market prices, tariffs, rules); (e)
Written documentation of independent
expert judgments from industry,
educational institutions (e.g.
universities, technical schools, training
centres), industry associations and
others. Please specify.
w. Has the outcome from Step 3 clearly EB 39 Ann Investment barrier OK OK
mentioned in PDD? 10
x. In step 4: Common practise analysis EB 39 Ann
have all the sub-steps as below 10
followed?
i. Sub-step 4a: Analyze other activities EB 39 Ann Follow combined tool to identify the baseline scenario and OK OK
similar to the proposed project activity; 10 demonstrate additionality to carry out the common practice
analysis. In according to the methodology, similar activities to
the project activity are defined as al single cycle and combine
cycle power plants that have been an installed capacity within
a range of +/-50% of the project power plant and that are
using one of the fossil fuel types used by the project units.
ii. Sub-step 4b: Discuss any similar EB 39 Ann A list of single and combined gas power plants (within the OK OK
Options that are occurring. 10 plant capacity limit between 55 MW and 165 MW) in the
Indonesia were listed in section B.5 Table 7
y. Has the below guideline followed for EB 39 Ann Yes OK OK
Sub-step 4a: Analyze other activities 10 A list of single and combined gas power plants (within the
similar to the proposed project activity? plant capacity limit between 55 MW and 165 MW) in the
Provide an analysis of any other activities Indonesia were listed in section B.5 Table 7.
that are operational and that are similar The analysis done on the number of gas fired power plants in
to the proposed project activity. Other different type of MW in Indonesia.
CDM project activities are not to be
included in this analysis. Provide
documented evidence and, where
relevant, quantitative information. On the
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basis of that analysis, describe whether
and to which extent similar activities have
already diffused in the relevant region.
z. Has the below guideline followed for EB 39 Ann PP has carried out Benchmark analysis to arrive at Equity OK OK
Sub-step 4b: Discuss any similar Options 10 IRR.
that are occurring? If similar activities are
identified, then it is necessary to
demonstrate why the existence of these
activities does not contradict the claim
that the proposed project activity is
financially/economically unattractive or
subject to barriers. This can be done by
comparing the proposed project activity
to the other similar activities, and pointing
out and explaining essential distinctions
between them that explain why the
similar activities enjoyed certain benefits
that rendered it financially/economically
attractive (e.g., subsidies or other
financial flows) and which the proposed
project activity cannot use or did not face
the barriers to which the proposed
project activity is subject. In case similar
projects are not accessible, the PDD
should include justification about non-
accessibility of data/information.
aa. Has the outcome from Step 4 clearly EB 39 Ann In the common practice analysis the outcome is21% of the OK OK
mentioned in PDD? 10 gas fired power plants of comparable size operating in
Indonesia are combined cycle. This is less than the 50%
threshold prescribed in the methodology ACM0007 version
6.1.0. Hence, the project activity is not regarded as common
practice.
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bb. Has it been proved that the porject is EB 39 Ann It is additional based on the project activity is not financially OK OK
additional? 10 attractive and is not common practice.
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a. Prior consideration of the clean
development mechanism
a. Is the project ativity start date prior to the VVS 112 OK OK
Yes
date of publication of the PDD for
stakeholder comments?
Project start date on 18/03/2011
PDD webhosted for public comment on 17/11/2011.
b. If yes, were the CDM benefits considered VVS 112 OK OK
Prior consideration of the CDM from dated on 06/05/2011.
necessary in the decision to undertake
the project as a proposed CDM project
activity?
c. Is the start date of the project activity, VVS 112 CL12 OK

Start date of the project is the date of steam turbine contract
reported in the PDD, in accordance with Closed
signed i.e. 18/03/2011
the Glossary of CDM terms, which
states that The starting date of a CDM
project activity is the earliest date at It was confirmed during on site visit and found satisfactory.
which either the implementation or
construction or real action of a project CL12
activity begins.?
d. Does the project activity require VVS 112 OK OK
Installation of new two HRSGs and One steam turbine to the
construction, retrofit or other
existing facilities.
modifications?
e. If yes, is it ensured that the date of VVS 112 OK OK
Using the contract signed date not commissioning date
commissioning cannot be considered as
the project activity start date?
f. Is it a new project activity (a project VVS 112 OK OK
New project activity after 02 Aug 2008
activity with a start date on or after 02
August 2008) or an existing project
activity (a project activity with a start date
before 02 August 2008)?
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g. For a new project, for which PDD has not VVS 112 OK OK
Yes, the PDD was web hosted for the global Stake holder
been published for global stakeholder
consultation process on 16/11/2011 which after the start date
consultation or a new methodology
i.e. 18/03/2011, it is evidenced that that PP has informed
proposed to the CDM Executive Board
UNFCCC secretariat through prior consideration form on 6th
before the project activity start date, had
May 2011 and to the host party DNA on 12th May 2011.
PPs informed the host Party DNA and
Verified both evidences and found satisfactory.
the UNFCCC secretariat in writing of the
commencement of the project activity
and of their intention to seek CDM
status? (Provide reference to such
confirmation from host Party DNA and
UNFCCC secretariat).
h. For an existing project activity, for which VVS 112 NA NA
NA
the start date is prior to the date of
publication of the PDD for global
stakeholder consultation, are the
following evidences provided:
ii. evidence that must indicate that VVS 112 NA NA NA
awareness of the CDM prior to the
project activity start date, and that the
benefits of the CDM were a decisive
factor in the decision to proceed with
the project, including, inter alia:
a. minutes and/or notes related to VVS 112 NA NA NA
the consideration of the decision
by the Board of Directors, or
equivalent, of the project
participant, to undertake the
project as a proposed CDM
project activity?
iii. reliable evidence from project VVS 112 Yes OK OK
participants that must indicate that
continuing and real actions were taken
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to secure CDM status for the project in
parallel with its implementation,
including, inter alia:
a. contract with consultants for VVS 112 Yes Contract between EON Corbon Sourcing GMBH and OK OK
CDM/PDD/methodology Biosphere Capital for the Consultancy services
services?
b. Emission Reduction Purchase VVS 112 Yes, Agreement between EON Carbon Sourcing GMBH and OK OK
Agreements or other Meppogen
documentation related to the
sale of the potential CERs
(including correspondence with
multilateral financial institutions
or carbon funds)?
c. evidence of agreements or VVS 112 Agreement for Validation Services with BVCH Dtd. OK OK
negotiations with a DOE for 10/11/2011
validation services?
d. submission of a new VVS 112 NA NA NA
methodology to the CDM
Executive Board?
e. publication in newspaper? VVS 112 NA NA NA
f. interviews with DNA? VVS 112 NA NA NA
g. earlier correspondence on the VVS 112 Prior consideration form on 6th May 2011 and to the host OK OK
project with the DNA or the party DNA on 12th May 2011, informing serious consideration
UNFCCC secretariat? to implement proposed CD project.
h. Has the chronology of events VVS 112 NA NA NA
including time lines been
appropriately captured and
explained/detailed in the PDD?
b. Identification of alternatives
a. Does the approved methodology that is VVS 116 NO OK OK
selected by the proposed CDM project
activity prescribe the baseline scenario
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and hence no further analysis is
required?
b. If no, does the PDD identify credible VVS 116 Follow ACM0007/ Version 6.1.0 mentioned to follow OK OK
alternatives to the project activity in order combined tool to identify the baseline scenario and
to determine the most realistic baseline demonstrate additionality
scenario?
c. Does the list of alternatives given in the VVS 116
PDD esure that:
i. the list of alternatives includes as VVS 116 Yes, it has included the project actiicy is undertaken without OK OK
one of the options that the project being registered as as proposed CDM project activity as one
activity is undertaken without being of the 6 identified alternatives.
registered as a proposed CDM
project activity?
ii. the list contains all plausible VVS 116 Yes OK OK
alternatives that the DOE, on the
basis of its local and sectoral
knowledge, considers to be viable
means of supplying the outputs or
services that are to be supplied by
the proposed CDM project activity?
iii. the alternatives comply with all VVS 116 Two alternatives were selected out of the 6 alternatives and OK OK
applicable and enforced check to compliance to local Indonesia legal laws.
legislation?
c. Investment analysis
a. Has investment analysis been used to VVS 123 Yes, the project participant has used the Benchmark OK OK
demonstrate the additionality of the analysis to demonstrate the additionality.
b. If yes, does the PDD provide evidence VVS 123
that the proposed CDM project activity
would not be:
i. the most economically or VVS 123 Benchmark Analysis has been carried out. OK OK
financially attractive alternative?
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ii. economically or financially feasible, VVS 123 Benchmark analysis has been carried out. Please refer OK OK
without the revenue from the sale sections below on comments on Equity IRR and benchmark
of certified emission reductions
(CERs)?
c. Was this shown by one of the following VVS 123
approaches?
i. The proposed CDM project activity VVS 123 Simple cost analysis has not been carried out. OK OK
would produce no financial or
economic benefits other than
CDM-related income. Document
the costs associated with the
proposed CDM project activity and
the alternatives identified and
demonstrate that there is at least
one alternative which is less costly
than the proposed CDM project
activity.
ii. The proposed CDM project activity VVS 123 Bench Mark analysis has been carried out OK OK
is less economically or financially
attractive than at least one other
credible and realistic alternative.
iii. The financial returns of the VVS 123 Benchmark analysis has been carried out. Please refer OK OK
proposed CDM project activity sections below on comments on Equity IRR and benchmark
would be insufficient to justify the
required investment.
d. Is the period of assessment limited to the EB 51 Ann Equity IRR has been calculated for 16 years which is the OK OK
proposed crediting period of the CDM 58 remaining lifetime of the project activity
project activity?
e. Does the project IRR and equity IRR EB 51 Ann Equity IRR has been calculated for 16 years which is the OK OK
calculations reflect the period of 58 remaining lifetime of the project activity.
expected operation of the underlying
project activity (technical lifetime), or - if a
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shorter period is chosen - include the fair
value of the project activity assets at the
end of the assessment period?
f. Does the IRR calculation include the cost EB 51 Ann CL 17 CL 17 OK
of major maintenance and/or 58 Please clarify if major maintainance or rehabilitation cost has Closed
rehabilitation if these are expected to be been expected to be incurred during the period of
incurred during the period of assessment.
assessment?
g. Do the project participants justify the EB 51 Ann Project participant has selected a fixed crediting period of 10 OK OK
appropriateness of the period of 58 years for the project activity. Equity IRR has been calculated
assessment in the context of the for 16 years which is the remaining lifetime of the project
underlying project activity, without activity.
reference to the proposed CDM crediting
period?
h. Does the cash flow in the final year EB 51 Ann CL 18 CL18 OK
include a fair value of the project activity 58 Project participant to clarify how fair value has been Closed
assets at the end of the assessment considered as per local accounting regulations of Indonesia.
period?
i. Has the fair value been calculated in EB 51 Ann Project participant to clarify how fair value has been
accordance with local accounting 58 considered as per local accounting regulations of Indonesia.
regulations where available, or A CL has been already raised on the same in 6.c.h. above.
international best practice?
j. Does the fair value calculations include EB 51 Ann CL 18 CL18 OK
both the book value of the asset and the 58 Project participant to clarify how fair value has been Closed
reasonable expectation of the potential considered as per local accounting regulations of Indonesia.
profit or loss on the realization of the A CL has been already raised on the same in 6.c.h. above.
assets?
k. Was depreciation, and other non-cash EB 51 Ann Yes, the depreciation and salvage value have been added OK OK
items related to the project activity, which 58 back to net profits for the purpose of calculating the fiancncial
have been deducted in estimating gross indicators.
profits on which tax is calculated, added
back to net profits for the purpose of
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calculating the financial indicator (e.g.
IRR, NPV)?
l. Has taxation been included as an EB 51 Ann CL 19 CL 19 OK
expense in the IRR/NPV calculation in 58 Please clarify whether project participant has included Closed
cases where the benchmark or other taxation as an expense in the IRR calculations.
comparator is intended for post-tax
comparisons?
m. Are the input values used in all EB 51 Ann CAR 9: CAR 9 OK
investment analysis valid and applicable 58 The input values used for all the investment analysis are not Closed
at the time of the investment decision taken at the time of investment decision as project participant
taken by the project participant? has calculated the Equity IRR on actual project cost. Project
participant to provide spreadsheet of Equity IRR calculations
on input values applicable at the time of investment decision.
Also please provide clear information on the time of
investment decision
n. Is the timing of the investment decision EB 51 Ann Refer 6.c.m. above. CAR 9 OK
consistent and appropriate with the input 58 Closed
values?
o. Are all the listed input values been EB 51 Ann Refer 6.c.m. above. CAR 9 OK
consistently applied in all calculations? 58 Closed
p. Does the investment analysis reflect the EB 51 Ann This condition is not applicable to the proposed CDM project OK OK
economic decision making context at 58 activity as proposed activity is a greenfield installation of
point of the decision to recomence the HRSG and Steam turbine for additional electricity generation.
project in the case of project activities for The implementation of the project activity did not cease.
which implementation ceases after the
commencement and where
implementation is recommenced due to
consideration of the CDM?
q. Have project participants supplied the EB 51 Ann Yes, the spreadsheet version of investment analysis has OK OK
spreadsheet versions of all investment 58 been provided. Refer 6.c.m. above.
analysis?
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r. Are all formulas used in this analysis EB 51 Ann the spreadsheet version of investment analysis has been OK OK
readable and all relevant cells be 58 provided where values are readable and unprotected. Refer
viewable and unprotected? 6.c.m. above.
s. In cases where the project participant EB 51 Ann The loan repayment and interest has been included in the OK OK
does not wish to make such a 58 calculation of Equity IRR.
spreadsheet available to the public has
the PP provided an exact read-only or
PDF copy for general publication?
t. In case the PP wishes to black-out EB 51 Ann Equity IRR have been calculated and PP does not wishes to OK OK
certain elements of the publicly available 58 black out any publicly avialbel element used in the investment
version, is it justifiable? analysis.
u. Was the cost of financing expenditures EB 51 Ann YES. PP has included cost of financing in the for loan OK OK
(i.e. loan repayments and interest) 58 reapayment and interest in the calculation of Equity IRR
included in the calculation of project
IRR?
v. In the calculation of equity IRR, has only EB 51 Ann Yes, it is clearly demonstrated in the Investment analysis OK OK
the portion of investment costs which is 58 spreadsheet.
financed by equity been considered as
the net cash outflow?
w. Has the portion of the investment costs EB 51 Ann No PP has not considered the cash out flow which is financed OK OK
which is financed by debt been 58 by debt
considered a cash outflow in the
calcualtion of equity IRR? (this is not
allowed)
x. Was a pre-tax benchmark be applied? EB 51 Ann Yes it has included the pre tax IRR OK OK
58
y. In cases where a post-tax benchmark is EB 51 Ann No post-tax benchmark applied OK OK
applied, is actual interest payable taken 58
into account in the calculation of income
tax?
z. In such situations, was interest EB 51 Ann In the Invenstment Analysis PP has utilized interest rates
calculated according to the prevailing 58 based on the prevailing commercial interest rates which is
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commercial interest rates in the region, applied at the time of loan sanction.
preferably by assessing the cost of other
debt recently acquired by the project CL 20
developer and by applying a debt-equity Please clarify why PP has not assessed cost of other debts OK
ratio used by the project developer for acuired by Meppogen to arrive at the interest rate CL 20
investments taken in the previous three calculations by applying debt equity ratio used by the Closed
years? Meppogen for investments taken in the previous three years.
aa. In cases where a benchmark approach is EB 51 Ann PP has utilized default benchmark value 12.5 % as OK OK
used is the applied benchmark 58 prescribed by the Appendix A of EB 62 Annex 5, version 5.
appropriate to the type of IRR
calculated? The project participant has chosen Default value for the
expected return on equity as per the Appendix A of EB 62
Annex 05. The default value selected by Project participant is
12.5% under Group 1 for host country Indonesia. This value
is classified under Ba2 category of Moodys Risk Rating for
bonds.
The selection of default value is appropriate as there is no

external funding is utilized for this project, project participant
has utilized internal equity and Loan from the bank to finance
the project.
Hence the validation team was of the view that the expected
return of 12.5% from the project was commensurate with the
risk involved in the Group 1 project activity under sectoral
Scope 1. Thus, the benchmark determined for the project
activity (12.5%) was found in line with EB 62, Annex 05.
bb. Has local commercial lending rates or EB 51 Ann PP has utilized default benchmark value 12.5 % as OK OK
weighted average costs of capital 58 prescribed by the Appendix A of EB 62 Annex 5, version 5.
(WACC) selected as appropriate
benchmarks for a project IRR?
cc. Has required/expected returns on equity EB 51 Ann PP has utilized default benchmark value 12.5 % as OK OK
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selected as appropriate benchmark for 58 prescribed by the Appendix A of EB 62 Annex 5, version 5.
an equity IRR?
dd. In case benchmarks supplied by relevant EB 51 Ann PP has utilized default benchmark value 12.5 % as OK OK
national authorities selected is it 58 prescribed by the Appendix A of EB 62 Annex 5, version 5.
applicable to the project activity and the
type of IRR calculation presented?
ee. In the cases of projects which could be EB 51 Ann PP has utilized default benchmark value 12.5 % as OK OK
developed by an entity other than the 58 prescribed by the Appendix A of EB 62 Annex 5, version 5.
project participant is the benchmark
applied based on publicly available data
sources which can be clearly validated?
ff. Have internal company EB 51 Ann PP has utilized default benchmark value 12.5 % as OK OK
benchmarks/expected returns (including 58 prescribed by the Appendix A of EB 62 Annex 5, version 5.
those used as the expected return on
equity in the calculation of a weighted
average cost of capital - WACC) been
applied in cases where there is only one
possible project developer?
gg. In such cases, have these values been EB 51 Ann PP has utilized default benchmark value 12.5 % as OK OK
used for similar projects with similar 58 prescribed by the Appendix A of EB 62 Annex 5, version 5.
risks, developed by the same company
or, if the company is brand new, would
have been used for similar projects in the
same sector in the country/region?
hh. Has a minimum clear evidence of the EB 51 Ann PP has utilized default benchmark value 12.5 % as OK OK
resolution by the companys Board 58 prescribed by the Appendix A of EB 62 Annex 5, version 5.
and/or shareholders been provided to the
effect as above?
ii. Has a thorough assessment of the EB 51 Ann PP has utilized default benchmark value 12.5 % as OK OK
financial statements of the project 58 prescribed by the Appendix A of EB 62 Annex 5, version 5.
developer - including the proposed
WACC - to assess the past financial
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behavior of the entity during at least the
last 3 years in relation to similar projects
been conduted?
jj. Does the risk premiums applied in the EB 51 Ann PP has utilized default benchmark value 12.5 % as OK OK
determination of required returns on 58 prescribed by the Appendix A of EB 62 Annex 5, version 5.
equity reflect the risk profile of the
project activity being assessed,
established according to
national/international accounting
principles? (It is not considered
reasonable to apply the rate general
stock market returns as a risk premium
for project activities that face a different
risk profile than an investment in such
indices.)
kk. Has an investment comparison analysis EB 51 Ann PP has utilized default benchmark value 12.5 % as OK OK
and not a benchmark analysis used 58 prescribed by the Appendix A of EB 62 Annex 5, version 5.
when the proposed baseline scenario
leaves the project participant no other
choice than to make an investment to
supply the same (or substitute) products
or services?
ll. Have variables, including the initial EB 51 Ann Yes. PP has presented sensitivity analysis in the PDD section OK OK
investment cost, that constitute more 58 B.5.
than 20% of either total project costs or PP has done sensitivity analysis on capex, tariff, Availability
total project revenues been subjected to Factor, gas costs/ price and O&M expense has been
reasonable variation (positive and performed by the PP to check changes in the E-IRR
negative) and the results of this variation calculated by subjecting above identified Key Project
been presented in the PDD and be indicators to +/- 5% to +/- 10 %variations.
reproducible in the associated To demonstrate that the variations in key project parameters
spreadsheets? is not resulting in the surpassing of the Selected bench mark
at any given point of time.
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mm. Have a corrective action been EB 51 Ann Refer 6.c.ll. above. OK OK
raised for a variable to be included in the 58
sensitivity analysis which constitute less
than 20% and have a material impact on
the analysis ?
nn. Is the range of variations selected is EB 51 Ann The variation in the sensitivity analysis covers the range of OK OK
reasonable in the project context? 58 +10% and -10%.
oo. Does the variations in the sensitivity EB 51 Ann The variation in the sensitivity analysis covers the range of OK OK
analysis at least cover a range of +10% 58 +10% and -10%.
and -10%, unless this is not deemed
appropriate in the context of the specific
project circumstances?
pp. In cases where a scenario will result in EB 51 Ann From the sensititvity analysis it is clear that the project activity OK OK
the project activity passing the 58 does not surpasses the identified Bench mark.
benchmark or becoming the most
financially attractive alternative, is an
assessment done of the probability of the
occurrence of this scenario in
comparison to the likelihood of the
assumptions in the presented investment
analysis, taking into consideration
correlations between the variables as
well as the specific socio-economic and
policy context of the project activity?
qq. Was the plant load factor defined ex-ante EB 48 Ann As per EB 48 Annex 11, validation of PLF can be done using CAR 2 OK
in the CDM-PDD according to one of the 11 two options: Closed
following options: a) the plant load factor provided to banks and / or equity
financiers while applying the project activity for
project financing, or to the government while applying
the project activity for implementation approval;
b) the plant load factor determined by a third party
contracted by the project participants (e.g an
engineering company),
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hence, the note provided as SD45-PLF justification is not
accepted.
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i. The plant load factor provided to EB 48 Ann Refer to CAR 2 CAR 2 OK
banks and/or equity financiers 11 Closed
while applying the project activity
for project financing, or to the
government while applying the
project activity for implementation
approval?
ii. The plant load factor determined EB 48 Ann Refer to CAR 2 CAR 2 OK
by a third party contracted by the 11 Closed
project participants (e.g. an
engineering company)?
rr. Was a thorough assessment of all VVS 123 Yes. OK OK
parameters and assumptions used in
calculating the relevant financial
indicator, and determine the accuracy
and suitability of these parameters using
the available evidence and expertise in
relevant accounting practices
conducted?
ss. Were the parameters cross-checked VVS 123 Yes OK OK
agains third-party or publicly available
sources, such as invoices or price
indices?
tt. Were feasibility reports, public VVS 123 Yes OK OK
announcements and annual financial
reports related to the proposed CDM
project activity and the project
participants reviewed?
uu. Was the correctnes of computations VVS 123 Yes OK OK
carried out and documented by the
project participants assessed?
vv. Was the sensitivity analysis by the VVS 123 Yes OK OK
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project participants to determine under
what conditions variations in the result
would occur, and the likelihood of these
conditions assessed?
ww. Is the type of benchmark applied is VVS 123 Yes OK OK
suitable for the type of financial indicator
presented?
xx. Do any risk premiums applied VVS 123 PP has utilized default benchmark value 12.5 % as OK OK
determining the benchmark reflect the prescribed by the Appendix A of EB 62 Annex 5, version 5.
risks associated with the project type or
activity?
yy. To determine this, was it assessed VVS 123 OK OK
whether it is reasonable to assume that
no investment would be made at a rate of
return lower than the benchmark by:
i. assessing previous investment VVS 123 Yes OK OK
decisions by the project
participants involved?
ii. determining whether the same VVS 123 Yes OK OK
benchmark has been applied?
iii. determining if there are verifiable VVS 123 Yes OK OK
circumstances that have led to a
change in the benchmark?
zz. Did the project participants rely on values VVS 123 CL 21: CL 21 OK
from Feasibility Study Reports (FSR) that Please provide details if any feasibility report has been Closed
are approved by national authorities for prepared by the project participant prior to the project
proposed CDM project activities? implementation and submitted for approvale to national
authrities for proposed CDM project activity.
xx. If yes: VVS 123
i. has the FSR been the basis of the VVS 123 Refer 6.c.zz. above. CL 21 OK
decision to proceed with the Closed
investment in the project, i.e. that
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the period of time between the
finalization of the FSR and the
investment decision is sufficiently
short for the DOE to confirm that it
is unlikely in the context of the
underlying project activity that the
input values would have materially
changed?
ii. Are the values used in the PDD VVS 123 Refer 6.c.xx. above. CL 21 OK
and associated annexes fully Closed
consistent with the FSR?
iii. If not, was the appropriateness of VVS 123 Refer 6.c.xx. above. CL 21 OK
the values validated? Closed
iv. On the basis of its specific local VVS 123 Refer 6.c.xx. above. CL 21 OK
and sectoral expertise, is Closed
confirmation provided, by cross-
checking or other appropriate
manner, that the input values from
the FSR are valid and applicable at
the time of the investment
decision?
d. Barrier analysis
a. Has barrier analysis been used to VVS 127 Project participant has selected only investment barrier to OK OK
demonstrated the additionality of the demonstrate the additionality. The points related to
proposed CDM project activity? investment analysis have been detailed in section 6.c. above.
b. If yes, does the PDD demonstrate that VVS 127 Project participant has selected only investment barrier to OK OK
the proposed CDM project activity faces demonstrate the additionality. The points related to
barriers that: investment analysis have been detailed in section 6.c. above.
i. prevent the implementation of this VVS 127 Project participant has selected only investment barrier to OK OK
type of proposed CMD project demonstrate the additionality. The points related to
activity? investment analysis have been detailed in section 6.c. above.
ii. do not prevent the implementation VVS 127 Project participant has selected only investment barrier to OK OK
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Draft Final
Concl Concl
of at least one of the alternatives? demonstrate the additionality. The points related to
investment analysis have been detailed in section 6.c. above.
c. Are there any issues that have a clear VVS 127 Project participant has selected only investment barrier to OK OK
direct impact on the financial returns of demonstrate the additionality. The points related to
the project activity, other than: risk investment analysis have been detailed in section 6.c. above.
related barriers, for example risk of
technical failure, that could have negative
effects on the financial performance; or
barriers related to the unavailability of
sources of finance for the project
activity? {If yes, these issues cannot be
considered barriers and shall be
assessed by investment analysis. [Refer
to (6.c) above]}
d. Were the barriers determined as real by: VVS 127
i. assssing the available evidence VVS 127 Project participant has selected only investment barrier to OK OK
and/or undertaking interviews with demonstrate the additionality. The points related to
relevant individuals (including investment analysis have been detailed in section 6.c. above.
members of industry associations,
government officials or local
experts if necessary) to determine
whether the barriers listed in the
PDD exist?
ii. ensuring that existence of barriers VVS 127 Project participant has selected only investment barrier to OK OK
is substantiated by independent demonstrate the additionality. The points related to
sources of data such as relevant investment analysis have been detailed in section 6.c. above.
national legislation, surveys of
local conditions and national or
international statistics?
iii. Is existence of a barrier VVS 127 Project participant has selected only investment barrier to OK OK
substantiated only by the opinions demonstrate the additionality. The points related to
of the project participants? (If yes, investment analysis have been detailed in section 6.c. above.
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VALIDATION REPORT
Draft Final
Concl Concl
this barrier cannot be considered
as adequately substantiated)
e. Were the barriers determined as VVS 127 Project participant has selected only investment barrier to OK OK
preventing the implementation of the demonstrate the additionality. The points related to
project activity but not the investment analysis have been detailed in section 6.c. above.
implementation of at least one of the
possible alternatives by applying local
and sectoral expertise to judge whether a
barrier or set of barriers would prevent
the implementation of the proposed CDM
project activity and would not equally
prevent implementation of at least one of
the possible alternatives, in particular the
identified baseline scenario?
e. Common practice analysis
a. Is this a proposed large-scale, or first-of- VVS 130 This is a Large scale Project. OK OK
its kind small-scale project activity?
b. If yes, was common practice analysis VVS 130 Yes common practice analysis is used in accordance with the OK OK
carried out as a credibility check of the Combined tool to identify baseline scenario and
other available evidence used by the Demonstrate addtionality Version 5.0.0.
project participants to demonstrate
additionality?
c. Was it assessed whether the VVS 130 Common practice analysis base on Indonesia region using OK OK
geograpphical scope (e.g. defined single cycle and combined cycle gas power plants (within the
region) of the common practice analysis plant capacity limit between 55MW and 165MW).
is appropriate for the assessment of
common practice related to the project
activitys technology or industry type?
(For certain technologis the relevant
region for assessment will be local and
for others it may be transnational/global.
d. Was a region other than the entire host VVS 130 Entire host country, Indonesia. OK OK
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VALIDATION REPORT
Draft Final
Concl Concl
country chosen?
e. If yes, was the explanation why this VVS 130 Yes OK OK
region is more appropriate assessed?
f. Using official sources and local and VVS 130 Yes. The information provided to prove the common practice OK OK
industry expertise, was it determined to additionality is found relevant and authentic.
what extent similar and operational
projects (e.g., using similar technology or
practice), other than CDM project
activities, have been undertaken in the
defined region?
g. Are similar and operational projects, VVS 130 From the Analysis presented in the PDD Section B.5 it is OK OK
other than CDM project activities, already clear that only 04 power plants are in operation in the host
widely observed and commonly carried country which used similar technology as the project power
out in the defined region? plant is using.
Total Number of gas-fired power plants in 54

host Country
Total Number of gas-fired power plants 19
between 55MW and 165MW in Host Country
Total Number of combined cycle plant 4
between 55MW and 165 MW in Host
Country
Total Proportion of combined cycle plant and 21%
single cycle power plants in Host Country
Only 21% of the gas fired power plants of comparable size
operating in Indonesia are combined cycle. This is less than
the 50% threshold prescribed in the methodology ACM0007
version 6.1.0. Thus, the project activity is not regarded as
common practice.
h. If yes, was it assessed whether there are VVS 130 NA NA NA
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VALIDATION REPORT
Draft Final
Concl Concl
essential distinctions between the
proposed CDM project activity and the
other similar activities?
7. Monotoring plan
a. Does the PDD include a monitoring plan? VVS 133 Yes, monitoring plan has been included in the PDD. Section OK OK
B.7.1, B.7.2 and Annex 4 cover the information related to the
monitoring.
b. Is this monitoring plan based on the VVS 133 Yes, the monitoring plan prepared by PP is based on OK OK
approved monitoring methodology methodology ACM 0007 / Version 6.1.0 monitoring
applied to the proposed CDM project methodology.
activity?
c. Were the list of parameters required by VVS 133 The methodology ACM 0007 / Version 6.1.0 requires OK OK
the the selected methodology identified? monitoring of
- net electricity supplied to the grid (export import).
Hourly measurements and monthly recording
required. The net electricity supplied to the grid
needs to be cross-checked with records for sold
electricity.
- Quantity of natural gas consumed by the project
activity , metering is provided and this can be cross
checked with the Gas invoices raised by the Gas
supplier on monthly basis
- Efficiency of combined cycle plant is a calculated
value using direct method which can be cross
checked with the yearly reports by the power plant
operator.
Net Calorific Value of natural gas consumed in combined
cycle power plant, this is a measured value by the gas
supplier available on daily basis and can be cross checked
with the monthly invoices raised by the gas supplier.
d. Does the monitoring plan contains all VVS 133 Yes, the necessary monitoring parameters net has been OK OK
necessary parameters? included by PP in the monitoring plan. The cross-checking
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VALIDATION REPORT
Draft Final
Concl Concl
mechanism for these parameters has also been incorporated
by the project participant.
e. Are the parameters clearly described? VVS 133 Yes, the parameters have been described as per the OK OK
requirements of the methodology.
f. Does the means of monitoring described VVS 133 Refer 7.g, below OK OK
in the plan comply with the requirements
of the methodology?
g. Has project participant identified the Yes, the necessary monitoring parameter net electricity OK OK
monitoring parameter Net electricity supplied to the grid (export import) has been included by PP
supplied to the grid? Has it been in the monitoring plan. The cross-checking mechanism for net
ensured by the project participant that electricity supplied to the grid has also been incorporated by
hourly measurment and monthly the project participant. Hourly measurement and monthly
recording of energy will be carried out? recording of the energy has been ensured by PP in the
Has project participant identifed the monitoring plan.
cross-checking mechanism for net
electricity supplied?
h. Are the monitoring arrangements VVS 133 Yes OK OK
described in the monitoring plan feasible
within the project design?
i. Does the monitoring plan provide details EB 24 37 Accuracy and calibration standard has been defined for the 3 OK OK
regarding calibration of monitoring parameters mentioned in the section B7.2 monitoring plan
equipments/ instruments or does it
include zero check as a substitute for
calibration. As per EB guidance related
to calibration (monitoring) requirements,
zero check can not be considered as a
substitute for calibration?
j. Are the following means of VVS 133
implementation of the monitoring plan
sufficient to ensure that the emission
reductions achieved by/resulting from the
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VALIDATION REPORT
Draft Final
Concl Concl
proposed CDM project activity can be
reported ex post and verified:
i. data management procedures? VVS 133 Yes OK OK
Data management and reponsible persons has been defined
in section B7.2
ii. quality assurance procedures? VVS 133 QA/QC to be applied will be frequently checked by the plant OK OK
owner and grid operator and equipment will be calibrated
accorded to the standard.
iii. quality control procedures? VVS 133 Same as above OK OK
8. Sustainable development
a. Does the CDM project activity assists VVS 52 Refer to CAR 1 CAR 1
Parties not included in Annex I to the
Convention in achieving sustainable
development?
b. Does the letter of approval by the DNA of VVS 52 Refer to CAR 1 CAR 1
the host Party confirm the contribution of
the proposed CDM project activity to the
sustainable development of the host
Party?
9. Local stakeholder consultation
a. Were local stakeholders (public, VVS 140 OK OK
including individuals, groups or Yes
communities affected, of likely to be Stakeholder meeting on 27 Sept 2011
affected, by the proposed CDM project PDD webhosted on 17 Nov 2011
activity or actions leading to the
implementation of such an activity)
invited by the PPs to comment on the
proposed CDM project activity prior to
the publication of the PDD on the
UNFCCC website?
b. Have comments by local stakeholders VVS 140 Yes OK OK
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VALIDATION REPORT
Draft Final
Concl Concl
that can reasonably be considered Total 6 comments by local stakeholders related to project
relevant for the proposed CDM project environmental aspect and employment and training issue
activity been invited?
c. Is the summary of the comments VVS 140 Yes OK OK
received as provided in the PDD Total 6 comments.
complete?
d. Have the project participants taken due VVS 140 Yes OK OK
account of any comments received and PP responded to the 6 comments.
described this process in the PDD?
10. Environmental impacts
a. Have the project participants submitted VVS 137 Environmental impact analysis done on the project activities OK OK
documentation on the analysis of the as required by the Indonesia law ministerial decree 17/2001
environmental impacts of the project required the EIA has to be done for capacity more than 100
activity? MW
b. Have the project participants undertaken VVS 137 Yes OK OK
an analysis of environmental impacts? As above
c. Does the host Party require an VVS 137 Yes OK OK
environmental impact assessment? Indonesia law ministerial decree 17/2001 required the EIA
has to be done for capacity more than 100 MW
d. If yes, have the project participants VVS 137 Yes OK OK
undertaken an environmental impact Documents have been submitted together with PDD
assessment? SD25 Environmental impact analysis
SD 30 Environmental management plan
SD31 Environmental monitoring plan
143

VALIDATION REPORT
Table 2: Resolution of Corrective Actions and Clarification Requests
Draft report clarifications and corrective Ref. to Summary of project owner response Validation team conclusion
action requests by validation team checklist
question
in table 1
and 2
CL 1: 3.d.iii
Carbon Trading Mechanism Division of Host
Country Indonesia calls for demonstrating The Check method has been used in the
compliance towards established sustainable LoA Application for this project, which is
development criteria by PP through a formal evidence for the compliance of this project
Method "check" used to evaluate the towards the sustainable development Verified SD 65 and found in line with
proposed CDM project, through which Project criteria required by the Indonesian DNA. the Host country DNA criteria hence
proponent should provide an explanation and SD65 is now provided to the DOE the CL is closed.
justification that the proposed project meets demonstrating this Check Method.
all indicators. Please provide sufficient
evidences on the compliance towards this
requirement and please explain how PDD is
aligned with the applicable indicators.
CL 2 3.h.ii This sentence indicates that the additional
PDD Section A.4.3 Para 3 states that In the power produced in the project scenario
Baseline scenario, the additional electricity would have been supplied by the electricity Correction in PDD verified and
produced in the project scenario is supplied grid in the baseline. found satisfactory, hence the CAR is
by the electricity grid, which is confusing. The PDD has been revised to read In the closed.
Please clarify. Baseline scenario, electricity is supplied by
the grid and additions to the grid
CL 3: 3.h.ii The predicted Plant Load Factor is 85% for Verified Revised table 3 in Section
144

VALIDATION REPORT
question
in table 1
and 2
PDD Section A.4.3 Table 3 shows that Plant the CCGT power plant. At this PLF, the A.4.3 and SD 48 and found
load factor is defined as 85% (predicted) CCGT plant will produce 819,060 MWh of calculations are correct and hence
however if back calculation is done based on electricity per year. Refer to cell E39 of the CL is closed.
document revised_SD_48 for calculation.
the information available i.e. Maximum
Maximum capacity can be calculated as
capacity and Total electricity generated in a 8,760 hours multiplied by 110MW, which
year the PLF is coming as 90%, please equals 963,600 Mwhrs. The project will
explain why this discrepancy is there in the generate 85% of this maximum (i.e.
calculation of PLF. 819,060 Mwhrs).
In the baseline scenario, the historical
average power generation was 525,248
MWh/yr.
145

VALIDATION REPORT
question
in table 1
and 2
CL 4: 3.p.iii
PP has selected Case (3) for demonstrating
determination of the baseline emissions in
line with the project electricity generation;
please clarify how Case (c) is applicable in In the baseline scenario, the maximum
detail to support the foot note 35 in more electricity that could have been produced
transparent manner. (EGmax) is defined by ACM0007 version
5.0 as:
EGmax = CAPmax . Tmax
Referring to this calculation in cell C8 of

worksheet Electricity Generation of
revised_SD48, EGmax = 677,051
MWh/year. Verified Revised description of Case
3 in PDD Section B.6.1 and SD 48
In the project scenario, the plant is and found calculations are correct
expected to operate at a load factor of 85%. and hence the CL is closed.
Assuming only 85% operational time for the
project, this leads to an annual electricity
generation of 819,060 MWh/year (110MW x
8760 x 85%). Refer to cell C14 of
worksheet Electricity Generation of
revised_SD48. Since this value is clearly
more than
146

VALIDATION REPORT
question
in table 1
and 2
the maximum possible electricity generation
in the baseline scenario. Even if we
assume that there are no shutdown hours
in the baseline scenario and the plant runs
at 100% in the baseline, , the electricity
generation would be (83.18 MW*8760
hours *100%) = 728,656 MWh/year, which
is still lower than the expected generation
of the plant in CCGT mode.
Therefore, case C is selected.
147

VALIDATION REPORT
question
in table 1
and 2
CL 5: 3.r.i - Page 35 PDD Section B.6.3
Please refer following points and provide EGMAX calculation needs review.
clarification individually
EGmax is calculated as follows:
- Page 35 PDD Section B.6.3 EGMAX EGMAX = CAPmax Tmax
calculation needs review. CAPmax = 83.18 MW; Tmax = 8760 hours
average shutdown hours (Refer
- Page 37 PDD Section B.6.3 Baseline Electricity Generation worksheet of
revised_SD_48)
Emission (BEy) is missing from the
Average shutdown hours are calculated
table. from available historical data and the
calculation is shown in worksheet
- Page 37 PDD Section B.6.3 as per
Historical Shut-Down of revised_SD48. Corrections in respective section of
foot note 50 COEFi,y is a calculated The calculated average historical shut- PDD Verified and found satisfactory
value Please provide transparent down hours are 620 hours/year. and hence the CL is closed.
calculation of this parameter. Therefore Egmax = (83.18 MW*(8760-
historical annual shutdown hours)) =
677,051 MWh/yr
- Page 37 PDD Section B.6.3

Baseline Emission (BEy) is missing
from the table.
BEy value has now been added to the

table in section B.6.3
148

VALIDATION REPORT
question
in table 1
and 2
- Page 37 PDD Section B.6.3 as per
foot note 50 COEFi,y is a calculated
value Please provide transparent
calculation of this parameter.
The term COEFi,y originates from page 1 of

Tool to calculate project or leakage CO2
emissions from fossil fuel combustion
version 2 (EB41, annex 11)
Referring to worksheet Project Emission of
revised_SD48,
COEFi,y = NCVi,y . EFco2i,y
The values of NCVi,y and EFco2i,y are also
shown in the work-sheet Project Emission
of the Emission Reduction calculations
presented in revised_SD48 along with the
data sources.
CL 6: 3di With reference to Evidence seen during site visit for
149

VALIDATION REPORT
question
in table 1
and 2
SD2- OSHA- Starting Date- of open Cycle SD55_GE_Commissioning_Closeout, the the starting date of open cycle plant
Plant is in the local language, Please operational warranty is stated to begin 22nd is Dtd. 22nd April 2007, which is a
provide authentic translation of the document. April 2007. At the validation site visit, the commissioning Report by the GE,
DOE approved that this date may be used and hence this considered as the
From the Document creation date it shows
as the Starting Date of the open cycle plant. credible evidence to justify the start
that the document is created on 17 June date.
The DOE also approved that SD55 is
2009, how does it supports the Start date of
sufficient evidence for this date and SD55 PP has subsequently revised the
open cycle plant please Clarify is now provided. Support document to SD 55, which
is acceptable and hence the CL is
(Documents Preferred to support the start closed.
date is either commissioning report or hand
over document from EPC contractor to
project owner)
CL 7: 3.d.i The document SD56_MEPPO-GEN
Please provide sufficient evidences to prove PLANT HISTORY SHEET is now Support document SD 56 on Plant
that there is no major modification / retrofit to submitted to the DOE. This document history verified in detail and found
the existing open cycle plant previous contains details of maintenance/repair work that there were no major
Maintenance history records of the important for this plant. The records show that no modifications / retrofit observed
equipments required for validation purpose. major retrofit/modifications have been during last three years and hence
made to the Open Cycle Plant, the CL is closed.
See also CL11.
CL 8: 3.d.i Page 2 of SD3 shows data from EPC These figures were verified with the
SD3 EPC shows ST Gross output as 34,417 contractor for the combined cycle plant. In current auxiliary load of open cycle
KW (34.417 MW) and Net installed capacity case # 1 of operation, the Steam Turbine operations and found justified and
defined in the PDD section A. 2 is 31.8 MW Gross Output is stated to be 34,417 kW, hence the CL is closed.
150

VALIDATION REPORT
question
in table 1
and 2
why this difference exists in the capacity and Net-Output is stated to be 31,807 kW.
Steam Turbine (ST)? The difference is due to auxiliary load and
internal plant consumption.
CL 9: 6.q SD10 is the baseline PPA dated 4th May
Power purchase agreement Dtd. 4th May 2007 and applies to the Open Cycle plant.
2007 shows 20 years as contract period and SD10c is the Draft PPA prepared by PLN
calculations of various important operational for the CCGT plant (i.e. the project
parameters i.e.MHL / SO, AFp, Capacity scenario). The Contracted Capacity in the
Payment Equation, Partial heat rate, CCR, draft project PPA is 110 MW. Many of the
FOMR, ECR and CCRT are based on the terms such as CCR, CCRT, FOMR are
existing (Pre project Scenario) capacity of revised in the draft PPA (SD10c) by PLN to
Power plant i.e. 80 MW, How change in the address the changes brought about by this
Capacity of the Power plant in project project, including the change in contracted
scenario addresses these calculations is not capacity from 80 MW to 110 MW. Draft PPA (SD10c) verified and
clear. found all these parameters are
For instance, AFp (projected availability addressed, hence the CL is closed.
factor) has increased from 80% for the
baseline scenario to 85% for the project
scenario. This is because combined cycle
plants are more efficient and thus cheaper
(PLN takes more electricity from cheaper
plants). Similarly, other technical
parameters have also been amended to
reflect the change in the technology (such
as the average heat rate etc)
These changes relate to the technical
151

VALIDATION REPORT
question
in table 1
and 2
changes associated with the move to
combined cycle technology and the
increase in capacity. These changes would
not have been made to the baseline PPA.
CL 10: 3.u.iv The symbol of efficiency of combined cycle
Correction in the PDD verified and
Symbol of efficiency of combined cycle power power plant at page 44 in section
found satisfactory hence the CL is
plant at page 44 section Parameters for CER Parameters for CER computation is now
closed.
computation missing. added.
CL 11: 3.d.i As per ACM0007 version 5.0,
Based on the discussions with site Criterion 1: The unit(s) have an operational
management and the Turbine maintenance history of at least one year with no major
records it was evidenced that one each major retrofit, and at least one unit has an
repair was done on both turbines in baseline operational history of more than three years
scenario during year 2007, please justify how with no major retrofit. There is no major Verified Major Repair Reports and
applicability condition as approved retrofit in these time periods. subsequent Plant history records
methodology is complied. and it is evidenced that there is no
Since the end of 2007, no major repairs Major modifications / retrofit was
have been performed on either of the done to the open cycle plant since
turbines. This is evidenced by 2008 2011, hence the CL is
SD56_MEPPO-GEN PLANT HISTORY closed.
SHEET. Since both units have an
operational history of more than three years
with no major retrofits, this criterion is
satisfied.
For clarity, there have been two
152

VALIDATION REPORT
question
in table 1
and 2
maintenance events of note:
- Silica build up during commissioning
in 2007
During the initial operating period gas

turbine 2 was contaminated with silica
from water being sprayed at the
compressor inlet to enhance the output and
also in the burner cans to reduce NOx
emissions. Due to the contamination,
Turbine 2 was removed and sent to Europe
for repairs (cleaning). During this period a
lease engine was utilized at the Site and
Turbine 1 continued to remain in service.
SD_63 is provided to the DOE and contains
the MTU repair report on this repair.
As evidenced by SD_63, this incident was

not a major retrofit of the turbine unit(s) and
did not in any way reduce the efficiency or
lifetime of Gas Turbine 2
- Electric component, 2007
In August 2007, during a unit trip the

generator breaker failed to open and the
unit motored on the system for
153

VALIDATION REPORT
question
in table 1
and 2
approximately 25 minutes before the Power
Plant staff were able to disconnect the
generator from the Grid. The incident
resulted in damage to GT1 and to the
Sulzer GT / Generator gearbox and to the
breaker where there were also no spares
available at the time. Temporary repairs
were undertaken at the time and
permanent repairs were completed when
the required damaged items were replaced.
The cause of the failure was reported to be
the loss of the DC battery supply to the
control system.
SD64 contains a report by Sulzer on the
repairs performed. This is now submitted to
the DOE as evidence that no major retrofit
was done on the turbine(s).
CL 12: As per Guidelines on The Demonstration
It is evidenced from the Chronological events And Assessment of Prior Consideration of
that the Project implementation is started The CDM version 4 (EB62 Annex 13) Clarification provided by PP is found
much earlier than the Prior Consideration satisfactory and hence the CL is
letter date, please clarify how proposed CDM closed.
project is complying with the EB guidelines The Board decided that for project
for prior consideration activities with a starting date on or after 2
August 2008, the project participant must
154

VALIDATION REPORT
question
in table 1
and 2
inform a Host Party designated national
authority (DNA) and the UNFCCC
secretariat in writing of the commencement
of the project activity and of their intention
to seek CDM status. Such notification must
be made within six months of the project
activity start date and shall contain the
precise geographical location and a brief
description of the proposed project activity,
using the standardized form F-CDM-Prior
Consideration.
The start date of this project activity is 18th
March 2011 when the Project Owner
signed the turbine supply contract (SD9).
On 6th May 2011, the project participant
submitted to the Host Party DNA
(Indonesia) and the UNFCCC Secretariat
via email, the standardized form F-CDM-
Prior-Consideration with required details
filled in, including the precise geographical
location and a brief project description. As
this form was submitted within 6 months
from project start date, the Prior
Consideration of CDM for this project is
established. This form is contained in
155

VALIDATION REPORT
question
in table 1
and 2
SD20.
The PP considered the CDM prior to the
project start date as part of the investment
decision.
It is true that the project owner started a
number of preliminary tasks before the
project activity start date, such as obtaining
Government permits, seeking bank offers
for debt financing etc. However, these
actions did not constitute an irrevocable
commitment on the part of the project
owner to proceed with the project because
no significant financial investment was
made. As per the CDM Glossary of Terms
version 5.0, Minor pre-project expenses,
e.g. the contracting of services /payment of
fees for feasibility studies or preliminary
surveys, should not be considered in the
determination of the start date as they do
not necessarily indicate the
commencement of implementation of the
project
Therefore, the preliminary works carried out
prior to the project start date need not be
considered in the determination of project
156

VALIDATION REPORT
question
in table 1
and 2
start date.
CL 13: 3.d.i Section A.2 of PDD states that
Please provide clear information on the date commencement of the baseline open cycle
of commencement of gas turbine as the date project happened in November 2006. This
provided in the PDD section A.2 is not date refers to the commissioning start date.
matching with the discussion with Site During the Validation Visit, the DOE was
management and the documentary informed that subsequent to the
Based on the Evidence seen during
evidences provided at the time of site visit. commissioning start date, one of the
site visit for the commissioning date
turbines had to be stopped from operation
of Gas turbines, PP has corrected
and sent for repairs. After repairs, the
PDD section A.2 and is now in line
turbine manufacturers inspected both the
with the requirement hence the CL
turbines and issued Commissioning
is closed.
Closeout on 22 April 2007 as per
SD55_GE-Commissioning-Closeout now
provided. The project owner agrees that
the open cycle project commencement date
should be revised to 22 April 2007 and the
PDD has been revised accordingly.
CL 14: 3.h.i The following efficiency values are inserted
Section A.4.3 of PDD is providing information into Table 3 of the PDD.
regarding technology employed for project Efficiency of power plant in: Corrections found satisfactory and
activity which included equipment
Baseline Scenario: 38.8% (SD32 page hence the CL is Closed.
specifications in baseline as well as project
scenario, please provide clear information on 100/296)
the efficiencies of these equipment in the Project Scenario: 42.24% (SD3)
157

VALIDATION REPORT
question
in table 1
and 2
project activity.
CL 15: 5.b.i5 As per Tool to determine the remaining
PP has applied tool to determine the lifetime of the equipment version 1, a
remaining lifetime of the equipment and default value can be used if the following
utilized default value provided in the tool to criteria are met:
calculate remaining lifetime of baseline Criterion 1: The project participants can
equipment, please provide clear information demonstrate that the equipment has been
how each condition mentioned in the tool for operated and maintained according to the
utilizing default value is complied by the PP recommendations of the equipment
and provide necessary evidences to confirm supplier. Clarification provided in the PDD
the same. section is in line with the Approved
Regarding operation of the plant, the plant Tool to Determine remaining life
manager follows a set of standard time of the equipment and hence it
operating procedures which are designed is acceptable. PDD section A.4.3 is
to meet the equipment suppliers found updated with the relevant
recommendations. SD58_SOP is provided information and hence the CL 15 is
to the DOE to support this. closed.
Regarding maintenance, the project owner
has a contract with MTU
Maintenance Berlin-Brandenburg, which is
an entity authorized by GE, and has a
special focus on GE LM series of turbines,
which are used by the project owner.
SD57_Exclusive Service Agreement
MEPPOGEN & MTU.2-1 is provided to
158

VALIDATION REPORT
question
in table 1
and 2
support this and demonstrate that the
baseline project has been properly
maintained.
Criterion 2: There are no periodic
replacement schedules or scheduled
replacement practices specific to the
industrial facility, that require early
replacement of equipment before the expiry
of the technical lifetime;
The project owner confirms that there are
no periodic replacement schedules or
scheduled replacement practices specific to
this plant facility, which may require early
replacement of equipment before expiry of
technical lifetime.
Clarification provided in the PDD

Criterion 3: The equipment has no design section is in line with the Approved
fault or defect and did not have any Tool to Determine remaining life
industrial accident due to which the time of the equipment and hence it
equipment cannot operate at rated is acceptable. PDD section A.4.3 is
performance levels. found updated with the relevant
The project owner confirms that there are information and hence the CL 15 is
no design faults or defects and that the closed.
plant did not have any industrial accidents
159

VALIDATION REPORT
question
in table 1
and 2
due to which the equipment cannot operate
at rated performance levels..
The DOE has been provided with
SD59_MTU_Maintenance_Reports which
are maintenance records/reports for this
plant as prepared by MTU
Maintenance Berlin-Brandenburg. This will
confirm compliance with criterion 3.
With reference to CL11 above, the
maintenance events described did not
affect the operational performance or
expected lifetime of the equipment.
CL 16: 6.p.v The IRR spreadsheet has been revised as Revised IRR calculations were
During site visit Financial Additionality Spread some of the earlier assumptions have been verified by the validation team as
sheet was discussed and found that the found to be inaccurate. The revised IRR well as external financial expert and
pretax IRR mentioned in PDD was 6.26% spreadsheet was sent to the DOE on 26th the changes in the IRR calculations
and the pre tax IRR in the Spread sheet was January 2012 and the revised post-tax IRR found correctly applied and IRR
8.34%. Please justify why there a is demonstrated to be 9.5% without CDM computation is correct.
discrepancy in the IRR value presented in the revenue. Those assumptions and
PDD for validation. references which have been revised in the
IRR spreadsheet have been highlighted in
green colour for DOEs review.
Also it was found that gas price used in the Evidence for the changed Gas price
spread sheet is different from that value In the web-hosted PDD, the gas price is in the form of SD 47 and SD50
presented in the web hosted PDD please assumed to be 6.45USD/mmBtu in the IRR verified and found satisfactory,
160

VALIDATION REPORT
question
in table 1
and 2
provide clear and transparent justification for calculation. This price in line with prevailing hence the CL is Closed.
this change in the gas price. market prices at the time of web hosting
and is based on PGNs presentation to
investors in SD47 (Check Slide 6/30). PGN
is the main gas distributor in Indonesia and
their gas price is publically available as
referenced.
However, in the project case, the gas is
provided by a different supplier in Medco.
Medco does not provide such publically
available standard gas prices but rather
negotiates prices more on a project-by-
project basis. As such, the project owner
originally used the PGN data as evidence
for the gas price as a clear standard price is
given.
The gas price has now been revised down
in the PDD and IRR analysis to a more
conservative estimate of $5.2/mmBTU. This
price was proposed by Meppogen to the
gas supplier, MEDCO at the time of the
investment decision, and is provided in
SD50.
However, the gas price is still being
negotiated at present. The price proposed
161

VALIDATION REPORT
question
in table 1
and 2
by Meppogen was rejected by Medco as
too low. As such, it is likely that the final
gas price will in fact be higher (and thus our
estimate is conservative).
CL 17: 6.c.f No major maintenance or rehabilitation cost
Please clarify if major maintainance or has been factored into the financial
rehabilitation cost has been expected to be additionality analysis. This is for Response to clarification was
incurred during the period of assessment. conservative reasons. verified by the validation team and
Also, decommissioning costs arising at the external financial expert and found
end of operational lifetime of the plant have satisfactory, hence the CL is closed.
not been factored in for conservative
reasons.
CL 18 6.c.h Fair value of project activity assets at the
Project participant to clarify how fair value of end of assessment period (Residual value)
the project activity assets at the end of is simply calculated on a pro-rata basis and
assement period has been considered as per is proportional to the remaining operational Approach towards considering Fair
local accounting regulations of Indonesia lifetime of the equipment that could have a value of the project activity assets at
while presenting the cash flow in the final re-sale value. The project owner believes the end of assessment period found
year. that this approach is very conservative and conservative and is validated using
over-estimates the potential earnings from external financial Expert. Hence the
re-sale of the equipments. It is assumed Response towards the CL is
that HRSG and steam turbine and accepted and the CL is closed.
transformer equipment could be re-sold at
the end of the 14 years of operation. As
per the Tool to determine remaining lifetime
162

VALIDATION REPORT
question
in table 1
and 2
of equipment, the lifetime of steam turbine
and boilers is 25 years. This leaves 25-14
=11 years of unused operation.
No decommissioning costs are assumed,
and this is again conservative.
CL 19: 6.c.l Taxation is included as an expense in the
Please clarify whether project participant has project. Tax is applied on the net
included taxation as an expense in the IRR operational profit (operational revenue less Taxation calculations found
calculations. operational expenses) to calculate the total satisfactory and hence the CL is
net earnings. This is indicated in worksheet closed.
Cash Flow of BC-EON-CCGT-
additionality-spreadsheet-26Jan
CL 20: 6.c.z The benchmark applied for return on equity
Please clarify why PP has not assessed cost is based on the default values provided in
of other debts acquired by Meppogen to the Guidelines on the Assessment of
arrive at the interest rate calculations by Investment Analysis.
Response to the CL found
applying debt equity ratio used by the Meppogen does not have a history of satisfactory and is in line with the
Meppogen for investments taken in the several such investments over the last Bank loan mandate and the Draw
previous three years. three years. The debt: equity ratio is based down schedule, hence the CL is
on the actual loan mandate (SD24) that closed.
was available at the time of the investment
decision. Note that the loan amount and
loan terms for the project activity were
negotiated together with a facility to re-
163

VALIDATION REPORT
question
in table 1
and 2
finance the Meppogens existing debt
overhang for the open-cycle plant. As
such, the loan terms and the debt:equity
ratio are consistent with Meppogens other
pre-existing loan for the previous open-
cycle project.
Note also that the debt:equity ratio for an
expansion project such as this is higher
than would be accepted for a greenfield
project because the additional loan is
secured to some extent by the fact that the
open cycle plant is already in existence
(collatoral) and generating revenue.
Note that this debt:equity ratio has now
been finalised and the loan draw-down has
begun. The interest rate is also in line with
average commercial interest rates on USD
loans offered by Indonesian banks. The
interest rate has been increased since the
loan mandate was negotiated at the time of
the investment decision (so our estimate of
the interest rate is conservative).
CL 21: 6.c.zz No feasibility report has been presented by Found Satisfactory as there is no
Please provide details if any feasibility report the project participants to national mandatory requirement in the Host
has been prepared by the project participant authorities as this is not required in country to submit Feasibility report
164

VALIDATION REPORT
question
in table 1
and 2
prior to the project implementation and Indonesia. to obtain approval from national
submitted for approval to national authorities Authorities for the proposed CDM
for proposed CDM project activity project, which is verified with the
local legal expert, who was a part of
validation team, hence the CL is
closed.
CL 22 6.p.i Tarrif is governed by the PPA, and
Tariff History of the electricity for last 03 as per the PPA the tarrif remains
Years When Last revision in tariff was fixed over an agreement period.
noticed.
Even in the past history there is no
There is no revision in tariff prior to the
change in the Tarrif value evidenced
project scenario, as the tariff is fixed by the
in the Sumatra Grid of Indonesia.
PPA which continues to apply until the
CCGT plant starts operating. The tariff for From the publically available data
each large-scale power plant is negotiated on power Tarrif rates in Indonesia it
on a project-by-project basis (there is no is concluded that there are no
standard regulated tariff set). significant changes evidenced in the
Tarrif Rate since 2003. Hence the
response given by the PP is
accepted and, hence the CL is
closed.
CL 23 6.p.i Three versions of the IRR spread sheets
Changes in the assumptions were
While going through revised Financial have been submitted so far.
verified and found that all changes
Analysis and assumptions it was noticed that are justified and hence Accepted
few input values / assumptions are Dated 23 Dec 2011
and CL is closed.
Dated 7 Jan 2012 (at the validation visit,
165

VALIDATION REPORT
question
in table 1
and 2
significantly changed e.g. with corrected Sensitivity analysis values
Cost of O&M increased by 480000 Please rest of the spreadsheet was unchanged
Justify why this change is. from the one dated 23 Dec 2011)
Total investment cost is increased by Dated 26 Jan 2012
2375543 please justify why this change is
Net electricity generation is increased by The O&M cost is described in the
35040000 KWH / Year (35040 MWH/Year spreadsheets as follows:
Please justify the change in the net electricity
generation. In the assumptions worksheet, The O&M
costs are given for baseline and project
scenario as 2,880,000 and 4,840,000
respectively. This value is calculated from
the O&M costs/kW/annum as given in
SD40, which is a study prepared by IEA
ETSAP. Refer cells C46 and C47 of the
Assumptions worksheet in the spreadsheet
dated 26 Jan.
The spreadsheet dated 23 Dec 2011 also
contains identical values in cells C47 and
C48.
The reason that O&M costs increase in the
project compared to the baseline include
increased staff costs to operate the steam
boilers and turbine, and increased repairs
and maintenance costs for the steam
turbines and boilers. The project has
166

VALIDATION REPORT
question
in table 1
and 2
increased in capacity so costs increase.
Note that the combined cycle component is
more expensive on a per MW basis than
single cycle as the systems require more
management etc (as evidenced by SD40)
The total CAPEX has increased from

53,289,500 to 54,405,543, an increase of
1,116,043.
This change is due to:
Addition of Value-Added-Tax of 1,251,043

(refer SD52)
Reduction in Total Physical Costs from
975,000 to 840,000. This is because the
cost component corrsponding to Land
acquisition & Clearing of 1,06 HA for
laydown area has been removed in the
latest version. The project owner explains
that this expense was planned for at the
time of investment decision, but eventually
not required.
The net electricity generation in project

scenario remains at 819,060 MWH/year.
(cell C14 of worksheet Electricity
167

VALIDATION REPORT
question
in table 1
and 2
Generation)
The baseline electricity generation also

remains at 525,248 MWH/year based on
historical generation. (Cell C10 of
worksheet Electricity Generation)
The Maximum Annual quantity of electricity

that could be generated in baseline has
increased from 651,183 to 677,051
MWH/year (Cell C8 of worksheet Electricity
Generation) This increase is because in
the revised SD48, the value applied for
CAPmax was corrected from 80 MW to
83.18 MW in line with ACM0007. 83.18 MW
is the gross installed capacity of the
baseline plant (Cell E7 of worksheet Data
Input), whereas 80 MW is the contracted
capacity by the power offtake company
(PLN). ACM0007 requires that gross
installed capacity be used in this
calculation.
CORRECTIVE ACTION REQUESTS:
CAR 1: 1.b The project participants have applied for
LOAs submitted by PP are verified
Provide DNA approvals from Annex 1 and DNA Approvals from host country
and found correct and hence the
(Indonesia) as well as annex 1 country (The
168

VALIDATION REPORT
question
in table 1
and 2
Non Annex 1 countries involved in this project Netherlands). CAR was closed.
(Parties involved in this project are
PP has obtained LOAs from both countries
Indonesia(Host) and Netherlands)
and submitted to DOE for validation
purpose
CAR 2: 3.h.ii The PLF value of 85% which is stated in
Also as per EB 48 Annex 11, validation of 6.c.qq the PDD is obtained from the Power
PLF can be done using two options Purchase Agreement. As the PPA is based
(a)The plant load factor provided to banks on the professional estimations of PP has changed the approach of
and/or equity financiers while applying the the two organizations, Meppogen and PLN, calculating the PLF and utilized the
project activity for project financing, or to this is considered as the best contractual PLF value depicted in
the government while applying the project projection for power off take from the power the PPA signed between Meppogen
activity for implementation approval; plant in the project scenario. and PLN.
(b) The plant load factor determined by a This PLF has been contractually agreed
third party contracted by the project between the parties and specifies On verification of the previous
participants(e.g. an engineering the expected number of MWhrs the plant energy generation and Energy
company); will supply to the grid. billing records (Monthly) it was
Hence the note provided as SD45- concluded that the PLF value in
PLF Justification is not accepted The value of 85% is the only PLF for the PPA is more conservative to be
project used in the analysis and is used in the ER calculations and IRR
consistent for both the CER estimates and calculation, hence it is acceptable.
the IRR projections.
The PLF of 85% is evidenced in SD-10b
and SD-10c
CAR 3: 3.k.ii The updated tools have now been used in PDD section B.1, B.4 & B.5 are
5.b.h place of the older versions. Combined tool found updated in line with current
PDD Section B.1 refers to the tools used by
169

VALIDATION REPORT
question
in table 1
and 2
PP to develop this proposed Large Scale 5.d.b to identify the baseline scenario and version of tool and hence CAR is
CDM Project, however the PP has not used demonstrate additionality version 5.0.0 is Closed.
current revision of tools i.e. Combined tool to now used, and Tool to calculate the
identify the baseline scenario and emission factor for an electricity System
demonstrate additionality (version 3.0.0 is version 2.2.1 has also been used in place
used / current version is 3.0.1) and Tool to of the older versions.
calculate the emission factor for an electricity
The PDD has also been modified to
System (Version 2.2.0 is used / current
indicate this change.
version is 2.2.1)
CAR 4 3.n.i The future load factor of the open cycle PDD Section B.4 is now amended
5.a.g.i plant in the baseline is unlikely to change with the Relevant details on the
PDD does not demonstrate how Methodology
condition pertaining to selection of baseline 6.a due to new conditions in the grid. The methodological condition When th
scenario and the demonstration of baseline plant has a valid PPA for 20 years current practice condition is
additionality is fulfilled specifically when the that specifies the operational parameters. assessed, the future estimated load
current practice condition (to continue the The baseline PLF is based on the technical factor should reflect the changes
operation in open cycle) is assessed, the capacity of the existing open-cycle plant due to new condition in the grid the
future estimated load factor should reflect the and the cost of generating the electricity by justification provided by PP was
changes due to new conditions in the grid. the baseline plant relative to other power verified against following available
plants in the grid. evidences
The project activity will increase the 1. PPA term 20 Years, which
efficiency of the power plant by converting confirms that PLF shall not
to combined cycle technology. As such, change till 20 years, which is
the relative cost of electricity generated by more than the selected
the plant will decrease. As a result, PLN crediting period of
170

VALIDATION REPORT
question
in table 1
and 2
has increased the projected availability 10years(Fixed)
factor demanded from the plant from 80%
2. Indonesia Power Scenario
to 85% load factor (as the electricity is now
presented in SD61a and
slightly cheaper relative to other sources in
SD61b - depicting Power
the grid). This reflects the improved
shortage in Indonesia.
efficiency of the plant and not new
conditions in the grid. As such, the Hence the Response to CAR is
increase in the PLF would not apply to the accepted and hence CAR 4 is
baseline power plant. closed.
Indonesia is facing increased electricity
demand and has a current supply shortfall
that is forecast to increase in the coming
decade (SD61a,b). Given this scenario,
PLN is unlikely (unable) to deviate from its
planned power off-take from the various
available sources of electricity.
There are no significantly new conditions
expected in the grid. In 2010, the power
generating capacity of the Sumatra grid
was over 4.5 GW ( SD60 _Sumatra_
Power_Generating _Capacity). Given such
a large base of generating power plants
and the forecast supply shortfall, it is
unlikely that there will be any changes that
will significantly affect the conditions in the
171

VALIDATION REPORT
question
in table 1
and 2
grid.
As such, the future estimated load factor for
the baseline scenario is not likely to be
materially affected.
CAR 5: 3.n.iii PDD section B.6.1 is now found
PDD Section B.6.1 Explanation of 3.p.i revised to include step by step
methodological choices refers to the approach in determining grid
determination of the emission factor for the emission factor for Sumatra grid.
grid electricity system (EFgrid.y) using tool to This calculation is based on the
calculate the emission factor for an electricity calculations done by Badan
system; however the step by step approach Pengkajian dan Penerapan
prescribed by the tool to arrive at EFgrid.y is Teknologi (BPPT) and approved by
The step-by-step approach for
not demonstrated transparently in the PDD. the Directorate General of Electricity
determination of the emission factor for the
grid electricity system (EFgrid.y) as and Energy Utilization (DJLPE). The
described by the Tool to calculate the Indonesian DNA uses this
emission factor for an electricity system calculation as their official grid
has now been demonstrated in the PDD. emission factor for the Sumatera
grid. The original source of all the
data was obtained by BPPT from PT
PLN Pembangkitan Sumbagut, PT
PLN Pembangkitan Sumbagsel
Statistics from 2005 to 2007 and PT
PLN P3B Sumatera (IPP data).
Hence the CAR is Closed.
172

VALIDATION REPORT
question
in table 1
and 2
CAR 6: 3.g
Identification of category for the project This project belongs to Sectoral Scope or
activity in PDD section A.4.2 is done wrong, Category 1, i.e. Energy industries Correction in PDD verified and
Please correct the category in line with the (renewable-/non renewable sources) found accepted hence CAR is
information available on the UNFCCC CDM The section A.4.2 of the PDD has been Closed.
Web site. updated accordingly.
CAR 7: 5.e.b.18
The relevant parameters contained by the PDD Section B.6.2 is now amended
PP uses tool to calculate the emission factor with the parameters recommended
for an electricity system, however relevant Tool to calculate the emission factor for an
electricity system have been now included by the Tool in the Ex Ante
data and parameters recommended by the Monitoring plan. Corrections verified
tool are not found included in the PDD in the PDD section B.6.2.
and found Acceptable and hence
section B.6.2. CAR is closed.
CAR 8: 3.n.d.i In line with the terms used in ACM 0007

PDD section B.6.2 is providing information on version 6.1.0, PDD Section B.6.2 is now updated
the data and parameters available at EGOCH has been re-named to EGx and corrected with relevant data and
validation, however the data and parameters parameters utilized to arrive at
presented in the section are found wrongly Fci,x has been re-named to Fci,x.
baseline emissions, Project
addressed i.e. EGOCH , FCNG.OCH as well it was EFupstream.CH4, EFCO2 Max, CAPmax, Tmax, HMRy emissions and emission reduction
seen that there are various data parameters have been included in PDD section B.6.2. calculations.
used by PP to arrive at emission calculations However, QHRx is not relevant to this
are not found described in this section e.g. And hence the CAR is closed.
project as no heat was recovered prior to
EFupstream.CH4, EFCO2 Max, CAPmax, Tmax, QHRx, the project scenario. Hence, QHR is not
173

VALIDATION REPORT
question
in table 1
and 2
HMRy etc. which is also required by required included.
by the approved methodology
CAR 9 6.c.m The investment decision is evidenced by
The input values used for all the investment the MOU to purchase a manufacturers slot
6.c.n Based on the discussion with PP
analysis are not taken at the time of agreement for the steam turbine (SD38).
investment decision as project participant has 6.c.o This was signed on 24 Nov 2010. This is and project owner it was understood
calculated the Equity IRR on actual project taken as date of the investment decision that there is no formal mechanism to
cost. Project participant to provide spread (and is a few months prior to the project record investment decision in formal
sheet of Equity IRR calculations on input start date in March 2011). manner, however there are few
values applicable at the time of investment internal communications on
All the input values used in the IRR approval of the purchase of Steam
decision. Also please provide clear
analysis are taken from information Turbine was noticed which is termed
information on the time of investment
available at the time of the investment as investment decision and
decision
decision. This includes: subsequently Project owner has
- EPC quotation, dated 30 September established a MOU with the Turbine
2010 manufacturer and hence this event
- Draft PPA which was proposed by was considered as the Investment
PLN to the project owner before decision event.
investment decision PPs response to the CAR is
- Loan Mandate, dated December accepted and hence CAR is closed.
2009
Further explanation and clear references
are provided in the IRR spread sheet.
174

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VALIDATION REPORT

E.ON CARBON SOURCING

REPORT NO. SINGAPORE -VAL/022/2012

BUREAU VERITAS CERTIFICATION

Report Template Revision 14 01/11/2011

Report No: Singapore -val/022/2012 rev. 2.3

Date of first issue: Organizational unit:

Report No.: Subject Group:

Date of this revision: Rev. No.: Number of pages:

Report No: Singapore -val/022/2012 rev. 2.3

Table of Contents Page

3 VALIDATION CONCLUSIONS ........................................................................ 8

4 COMMENTS BY PARTIES, STAKEHOLDERS AND NGOS ............. 43

5 VALIDATION OPINION .................................................................................... 43

Report No: Singapore -val/022/2012 rev. 2.3

7 CURRICULA VITAE OF THE DOES VALIDATION TEAM

APPENDIX A: COMPANY CDM PROJECT VALIDATION PROTOCOL ..................... 51

Report No: Singapore -val/022/2012 rev. 2.3

Report No: Singapore -val/022/2012 rev. 2.3

1.3 Validation team

FUNCTION NAME CODE TASK

Report No: Singapore -val/022/2012 rev. 2.3

Mr. Sushil Budhia

The completed validation protocol is enclosed in Appendix A to this report.

2.1 Review of Documents

To address Bureau Veritas Certification corrective action and clarification requests,

2.2 Follow-up Interviews

Report No: Singapore -val/022/2012 rev. 2.3

Table 1 Interview topics

2.3 Resolution of Clarification and Corrective Action

Corrective Action Requests (CAR) is issued, where:

2.4 Internal Technical Review

Report No: Singapore -val/022/2012 rev. 2.3

When performing an Internal Technical Review, the reviewer ensures that:

3.1 Approval (43-44)

Report No: Singapore -val/022/2012 rev. 2.3

Subsequently Project participants, PT Metaepsi Pejebe Power Generation obtained

CAR-1 and CAR-2 raised earlier are now closed.

3.2 Authorization (49)

Host Country ratification Status:

Annex I Country Ratification Status:

Report No: Singapore -val/022/2012 rev. 2.3

3.3 Sustainable Development (52)

3.4 Modalities of Communication (58,61)

3.5 Project design document (63)

3.6 Changes in the Project Activity(17)

Report No: Singapore -val/022/2012 rev. 2.3

1. PDD Section A.4.3 revised to incorporate efficiencies of Equipments in baseline

3.7 Project description (69)

Report No: Singapore -val/022/2012 rev. 2.3

The project start date is 18/03/2011/Purchase Agreement with Siemens/, as it

Report No: Singapore -val/022/2012 rev. 2.3

Project Duration and Crediting period

3.8 Baseline and monitoring methodology

Report No: Singapore -val/022/2012 rev. 2.3

Report No: Singapore -val/022/2012 rev. 2.3

Report No: Singapore -val/022/2012 rev. 2.3

3.8.2 Project boundary (86-87)

- Natural Gas Turbines

3.8.3 Baseline identification (94-95)

Report No: Singapore -val/022/2012 rev. 2.3

STEP 1. Identification of alternative scenarios;

2. Continuation of the current Practice (not to implement conversion of existing