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Methodological Tool

(Version 02)

“Tool to calculate the emission factor for an electricity system”

I. DEFINITIONS, SCOPE, APPLICABILITY AND PARAMETERS

Definitions
For the purpose of this tool, the following definitions apply:
Power plant/unit. A power plant/unit is a facility that generates electric power. Several power units at
one site comprise one power plant, whereby a power unit is characterized by the fact that it can operate
independently of the other power units at the same site. Where several identical power units (i.e. with the
same capacity, age and efficiency) are installed at one site, they may be considered as one single power
unit.
Grid power plant/unit. Power plant/unit that supplies electricity to the electricity grid and, if applicable,
to specific consumers.
Off-grid power plant/unit. Power plant/unit that supplies electricity to specific consumers through a
dedicated distribution network which is not used by any other power plants. For a power plant to be
categorized as off-grid, the following conditions need be fulfilled:
(i) A grid (or grids) capable of supplying power to the specific consumer(s) to which the off-grid
facility is connected must exist;
(ii) The off-grid facility is not connected to the grid(s) and cannot supply power to the grid(s),
but only to the consumer(s) to which it is connected;
(iii) Under normal conditions, the consumer(s) are supplied their power requirements from the
grid only, i.e. the off-grid plant(s) which are connected to the consumer(s) are standby onsite
facility(ies) that are only used when power supply from the grid fails (or in many cases, when
the quality of power supply to the end-user is below acceptable quality);
(iv) To ensure a sound shift from the grid supply to the off-grid supply the consumer have in
place a change-over-switch system (which may be manual or automatic).

Net electricity generation refers to the difference between the total quantity of electricity generated by
the power plant/unit and the auxiliary electricity consumption (also known as parasitic load) of the power
plant/unit (e.g. for pumps, fans, controlling, etc).

Grid/project electricity system is defined by the spatial extent of the power plants that are physically
connected through transmission and distribution lines to the project activity (e.g. the renewable power
plant location or the consumers where electricity is being saved) and that can be dispatched without
significant transmission constraints.
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Connected electricity system is an electricity system that is connected by transmission lines to the project
electricity system. Power plants within the connected electricity system can be dispatched without
significant transmission constraints but transmission to the project electricity system has significant
transmission constraint.

Scope and applicability

This methodological tool determines the CO2 emission factor for the displacement of electricity generated
by power plants in an electricity system, by calculating the “combined margin” emission factor (CM) of
the electricity system. The CM is the result of a weighted average of two emission factors pertaining to
the electricity system: the “operating margin” (OM) and the “build margin” (BM). The operating margin
is the emission factor that refers to the group of existing power plants whose current electricity generation
would be affected by the proposed CDM project activity. The build margin is the emission factor that
refers to the group of prospective power plants whose construction and future operation would be affected
by the proposed CDM project activity.
This tool may be applied to estimate the OM, BM and/or CM when calculating baseline emissions for a
project activity that substitutes grid electricity, i.e. where a project activity supplies electricity to a grid or
a project activity that results in savings of electricity that would have been provided by the grid (e.g.
demand-side energy efficiency projects).

Under this tool, the emission factor for the project electricity system can be calculated either for grid
power plants only or, as an option, can include off-grid power plants. In the latter case, the conditions
specified in “Annex 2 - Procedures related to off-grid power generation” should be met. Namely, the total
capacity of off-grid power plants (in MW) should be at least 10% of the total capacity of grid power plants
in the electricity system; or the total power generation by off-grid power plants (in MWh) should be at
least 10% of the total power generation by grid power plants in the electricity system; and that factors
which negatively affect the reliability and stability of the grid is primarily due to constraints in generation
and not to other aspects such as transmission capacity.
Note that this tool is also referred to in the “Tool to calculate project emissions from electricity
consumption” for the purpose of calculating project and leakage emissions in case where a project activity
consumes electricity from the grid or results in increase of consumption of electricity from the grid outside
the project boundary.
Parameters
This tool provides procedures to determine the following parameters:
Parameter SI Unit Description
EFgrid,CM,y tCO2/MWh Combined margin CO2 emission factor for the project electricity system
in year y
EFgrid,BM,y tCO2/MWh Build margin CO2 emission factor for the project electricity system in
year y
EFgrid,OM,y tCO2/MWh Operating margin CO2 emission factor for the project electricity system
in year y

No methodology-specific parameters are required.

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II. BASELINE METHODOLOGY PROCEDURE

Project participants shall apply the following six steps:

STEP 1. Identify the relevant electricity systems.

STEP 2. Choose whether to include off-grid power plants in the project electricity system (optional).
STEP 3. Select a method to determine the operating margin (OM).
STEP 4. Calculate the operating margin emission factor according to the selected method.
STEP 5. Identify the group of power units to be included in the build margin (BM).
STEP 6. Calculate the build margin emission factor.
STEP 7. Calculate the combined margin (CM) emissions factor.

Step 1: Identify the relevant electricity systems

For determining the electricity emission factors, a project electricity system is defined by the spatial
extent of the power plants that are physically connected through transmission and distribution lines to the
project activity (e.g. the renewable power plant location or the consumers where electricity is being saved)
and that can be dispatched without significant transmission constraints.

Similarly, a connected electricity system, e.g. national or international, is defined as an electricity system
that is connected by transmission lines to the project electricity system. Power plants within the connected
electricity system can be dispatched without significant transmission constraints but transmission to the
project electricity system has significant transmission constraint.

If the DNA of the host country has published a delineation of the project electricity system and connected
electricity systems, these delineations should be used. If this information is not available, project
participants should define the project electricity system and any connected electricity system, and justify
and document their assumptions in the CDM-PDD. The following criteria can be used to determine the
existence of significant transmission constraints:1

• In case of electricity systems with spot markets for electricity: there are differences in electricity
prices (without transmission and distribution costs) of more than 5 percent between the systems
during 60 percent or more of the hours of the year;
• The transmission line is operated at 90% or more of its rated capacity during 90% percent or more
of the hours of the year.

Where the application of these criteria does not result in a clear grid boundary, use a regional grid
definition in the case of large countries with layered dispatch systems (e.g. provincial/regional/national).
A provincial grid definition may indeed in many cases be too narrow given significant electricity trade
among provinces that might be affected, directly or indirectly, by a CDM project activity. In other
countries, the national (or other largest) grid definition should be used by default. Document the

1
Project participants may propose other criteria or submit proposals for revision of these criteria for consideration
by the CDM Executive Board.
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geographical extent of the project electricity system transparently and identify all grid power plants/units
connected to the system.

Electricity transfers from connected electricity systems to the project electricity system are defined as
electricity imports and electricity transfers to connected electricity systems are defined as electricity
exports.

For the purpose of determining the build margin emission factor, the spatial extent is limited to the project
electricity system, except where recent or likely future additions to transmission capacity enable
significant increases in imported electricity. In such cases, the transmission capacity may be considered a
build margin source.

For the purpose of determining the operating margin emission factor, use one of the following options to
determine the CO2 emission factor(s) for net electricity imports from a connected electricity system within
the same host country(ies):

(a) 0 tCO2/MWh; or
(b) The weighted average operating margin (OM) emission rate of the exporting grid, determined as
described in Step 4 (d) below; or
(c) The simple operating margin emission rate of the exporting grid, determined as described in
Step 4 (a), if the conditions for this method, as described in Step 3 below, apply to the exporting
grid; or
(d) The simple adjusted operating margin emission rate of the exporting grid, determined as
described in Step 4 (b) below.

For imports from connected electricity systems located in another host country(ies), the emission factor is
0 tons CO2 per MWh.

Electricity exports should not be subtracted from electricity generation data used for calculating and
monitoring the electricity emission factors.

Step 2: Choose whether to include off-grid power plants in the project electricity system (optional)

Project participants may choose between the following two options to calculate the operating margin and
build margin emission factor:

Option I: Only grid power plants are included in the calculation.

Option II: Both grid power plants and off-grid power plants are included in the calculation.
Option I corresponds to the procedure contained in earlier versions of this tool. Option II allows the
inclusion of off-grid power generation in the grid emission factor. Option II aims to reflect that in some
countries off-grid power generation is significant and can partially be displaced by CDM project activities,
e.g. if off-grid power plants are operated due to an unreliable and unstable electricity grid. Option II
requires collecting data on off-grid power generation as per Annex 2 and can only be used if the
conditions outlined therein are met. Option II may be chosen only for the operating margin emission
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factor or for both the build margin and the operating margin emission factor but not only for the build
margin emission factor.
If Option II is chosen, off-grid power plants should be classified as per the guidance in Annex 2 in
different classes of off-grid power plants. Each off-grid power plant class should be considered as one
power plant j, k, m or n in the following steps, as applicable.

Step 3: Select a method to determine the operating margin (OM)

The calculation of the operating margin emission factor (EFgrid,OM,y) is based on one of the following
methods:
(a) Simple OM; or
(b) Simple adjusted OM; or
(c) Dispatch data analysis OM; or
(d) Average OM.
Each method is described under Step 4.
The simple OM method (option a) can only be used if low-cost/must-run resources2 constitute less than
50% of total grid generation in: 1) average of the five most recent years, or 2) based on long-term
averages for hydroelectricity production.
The dispatch data analysis (Option d) cannot be used if off-grid power plants are included in the project
electricity system as per Step 2 above.
For the simple OM, the simple adjusted OM and the average OM, the emissions factor can be calculated
using either of the two following data vintages:

• Ex ante option: If the ex ante option is chosen, the emission factor is determined once at the
validation stage, thus no monitoring and recalculation of the emissions factor during the crediting
period is required. For grid power plants, use 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.
For off-grid power plants, use a single calendar year within the 5 most recent calendar years prior
to the time of submission of the CDM-PDD for validation.

• Ex post option: If the ex post option is chosen, the emission factor is determined for the year in
which the project activity displaces grid electricity, requiring the emissions factor to be updated
annually during monitoring. If the data required to calculate the emission factor for year y is
usually only available later than six months after the end of year y, alternatively the emission
factor of the previous year y-1 may be used. If the data is usually only available 18 months after

2
Low-cost/must-run resources are defined as power plants with low marginal generation costs or power plants that
are dispatched independently of the daily or seasonal load of the grid. They typically include hydro, geothermal,
wind, low-cost biomass, nuclear and solar generation. If coal is obviously used as must-run, it should also be
included in this list, i.e. excluded from the set of plants.
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the end of year y, the emission factor of the year proceeding the previous year y-2 may be used.
The same data vintage (y, y-1 or y-2) should be used throughout all crediting periods.
For the dispatch data analysis OM, use the year in which the project activity displaces grid electricity and
update the emission factor annually during monitoring.
The data vintage chosen should be documented in the CDM-PDD and not be changed during the crediting
periods.
Power plants registered as CDM project activities should be included in the sample group that is used to
calculate the operating margin if the criteria for including the power source in the sample group apply.
Step 4: Calculate the operating margin emission factor according to the selected method
(a) Simple OM
The simple OM emission factor is calculated as the generation-weighted average CO2 emissions per unit
net electricity generation (tCO2/MWh) of all generating power plants serving the system, not including
low-cost/must-run power plants/units.
The simple OM may be calculated:

Option A: Based on the net electricity generation and a CO2 emission factor of each power unit;3 or

Option B: Based on the total net electricity generation of all power plants serving the system and the fuel
types and total fuel consumption of the project electricity system.
Option B can only be used if:

(a) The necessary data for Option A is not available; and

(b) Only nuclear and renewable power generation are considered as low-cost/must-run power sources
and the quantity of electricity supplied to the grid by these sources is known; and
(c) Off-grid power plants are not included in the calculation (i.e., if Option I has been chosen in
Step 2).
Option A - Calculation based on average efficiency and electricity generation of each plant
Under this option, the simple OM emission factor is calculated based on the net electricity generation of
each power unit and an emission factor for each power unit, as follows:

3
Power units should be considered if some of the power units at the site of the power plant are low-cost/must-run
units and some are not. Power plants can be considered if all power units at the site of the power plant belong to
the group of low-cost/must-run units or if all power units at the site of the power plant do not belong to the group
of low-cost/must-run units.
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∑ EG ⋅ EF m,y EL,m,y
EFgrid,OMsimple,y = m
(1)
∑ EG m
m,y

Where:
EFgrid,OMsimple,y = Simple operating margin CO2 emission factor in year y (tCO2/MWh)
EGm,y = Net quantity of electricity generated and delivered to the grid by power unit m in year y
(MWh)
EFEL,m,y = CO2 emission factor of power unit m in year y (tCO2/MWh)
m = All power units serving the grid in year y except low-cost / must-run power units
y = The relevant year as per the data vintage chosen in Step 3
Determination of EFEL,m,y
The emission factor of each power unit m should be determined as follows:

• Option A1. If for a power unit m data on fuel consumption and electricity generation is available,
the emission factor (EFEL,m,y) should be determined as follows:

∑ FC i,m, y ⋅ NCVi,y ⋅ EFCO2,i,y

EFEL,m,y = i
(2)
EG m ,y

Where:
EFEL,m,y = CO2 emission factor of power unit m in year y (tCO2/MWh)
FCi,m,y = Amount of fossil fuel type i consumed by power unit m in year y (Mass or
volume unit)
NCVi,y = Net calorific value (energy content) of fossil fuel type i in year y (GJ/mass
or volume unit)
EFCO2,i,y = CO2 emission factor of fossil fuel type i in year y (tCO2/GJ)
EGm,y = Net quantity of electricity generated and delivered to the grid by power
unit m in year y (MWh)
m = All power units serving the grid in year y except low-cost/must-run power
units
i = All fossil fuel types combusted in power unit m in year y
y = The relevant year as per the data vintage chosen in Step 3

• Option A2. If for a power unit m only data on electricity generation and the fuel types used is
available, the emission factor should be determined based on the CO2 emission factor of the fuel
type used and the efficiency of the power unit, as follows:

EFCO2,m,i,y ⋅ 3.6
EFEL,m,y = (3)
η m,y
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Where:
EFEL,m,y = CO2 emission factor of power unit m in year y (tCO2/MWh)
EFCO2,m,i,y = Average CO2 emission factor of fuel type i used in power unit m in year y
(tCO2/GJ)
ηm,y = Average net energy conversion efficiency of power unit m in year y (ratio)
m = All power units serving the grid in year y except low-cost/must-run power
units
y = The relevant year as per the data vintage chosen in Step 3

Where several fuel types are used in the power unit, use the fuel type with the lowest CO2
emission factor for EFCO2,m,i,y.

• Option A3. If for a power unit m only data on electricity generation is available, an emission
factor of 0 tCO2/MWh can be assumed as a simple and conservative approach.

Determination of EGm,y
For grid power plants, EGm,y should be determined as per the provisions in the monitoring tables.
For off-grid power plants, EGm,y can be determined using one of the following options:4
• Option 1. EGm,y is determined based on (sampled) data on the electricity generation of off-grid
power plants, as per the guidance in Annex 2.
• Option 2. EGm,y is determined based on (sampled) data on the quantity of fossil fuels combusted
in the class of off-grid power plants m, as per the guidance in Annex 2, and the default efficiencies
provided in Annex 1, as follows:

EG m, y = ∑ FCi, m, y × NCVi, y × ηm, y (4)

i

Where:
EGm,y = Net quantity of electricity generated and delivered to the grid by power
unit m in year y (MWh)
FCi,m,y = Amount of fossil fuel type i consumed by power plants included in off-grid
power plant class m in year y (mass or volume unit)
NCVi,y = Net calorific value (energy content) of fossil fuel type i in year y (GJ/mass
or volume unit)
ηm,y = Default net energy conversion efficiency of off-grid power plant class m in
year y (ratio), as per the default values provided in Annex 1
m = Off-grid power plant class considered as one power unit (as per the
provisions in Annex 2 to this tool)
y = The relevant year as per the data vintage chosen in Step 3
i = Fossil fuel types used

4
Note that different options can be applied to different classes of off-grid power plants; however, the same option
should be applied to all (sampled) off-grid power plants within one class.
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• Option 3. EGm,y is estimated based on the capacity of off-grid electricity generation in that class
and a default plant load factor, as follows:

EG m, y = CAPm × PLFdefault, off − grid, y × 8760 (5)

Where:
EGm,y = Net quantity of electricity generated and delivered to the grid by power unit m
in year y (MWh)
CAPm = Total capacity of off-grid power plants in included in off-grid power plant
class m (MW)
PLFdefault,off-grid,y = Default plant load factor for off-grid generation in year y (ratio)
m = Off-grid power plant class considered as one power unit (as per the provisions
in Annex 2 to this tool)
y = The relevant year as per the data vintage chosen in Step 3

The default plant load factor for off-grid generation (PLFdefault,off-grid,y) should be determined using
one of the following two options:
• Use a conservative default value of 300 hours per year, assuming that the off-grid power
plants would at least operate for one hour per day at six days at full capacity (i.e.
PLFdefault,off-grid,y=300/8760); or
• Calculate the default plant load factor based on the average grid availability and a default
factor of 0.5, assuming that off-grid power plants are operated at full load during
approximately half of the time that the grid is not available, as follows:

Tgrid, y
PLFdefault,off −grid, y = 8760 × (1 − ) × 0.5 (6)
8760
Where:
PLFdefault,off-grid,y = Default plant load factor for off-grid generation in year y (ratio)
Tgrid,y = Average time the grid was available to final electricity consumers in
year y (hours)

Option B - Calculation based on total fuel consumption and electricity generation of the system
Under this option, 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, as follows:

∑ (FC i,y × NCVi , y × EFCO 2,i , y )

EFgrid ,OMsimple, y = i
(7)
EG y
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Where:
EFgrid,OMsimple,y = Simple operating margin CO2 emission factor in year y (tCO2/MWh)
FCi,y = Amount of fossil fuel type i consumed in the project electricity system in year y (mass
or volume unit)
NCVi,y = Net calorific value (energy content) of fossil fuel type i in year y (GJ/mass or volume
unit)
EFCO2,i,y = CO2 emission factor of fossil fuel type i in year y (tCO2/GJ)
EGy = Net electricity generated and delivered to the grid by all power sources serving the
system, not including low-cost/must-run power plants/units, in year y (MWh)
i = All fossil fuel types combusted in power sources in the project electricity system in
year y
y = The relevant year as per the data vintage chosen in Step 3
For this approach (simple OM) to calculate the operating margin, the subscript m refers to the power
plants/units delivering electricity to the grid, not including low-cost/must-run power plants/units, and
including electricity imports5 to the grid. Electricity imports should be treated as one power plant m.

(b) Simple adjusted OM

The simple adjusted OM emission factor (EFgrid,OM-adj,y) is a variation of the simple OM, where the power
plants / units (including imports) are separated in low-cost/must-run power sources (k) and other power
sources (m). As under Option A of the simple OM, it is calculated based on the net electricity generation
of each power unit and an emission factor for each power unit, as follows:

∑ EG × EF
m, y EL, m, y ∑ EG × EF
k, y EL, k, y
EFgrid,OM -adj, y = (1 − λ y )⋅m
+ λy ⋅k
(8)
∑ EG
m
m, y ∑ EG
k
k, y

Where:
EFgrid,OM-adj,y = Simple adjusted operating margin CO2 emission factor in year y (tCO2/MWh)
λy = Factor expressing the percentage of time when low-cost/must-run power units are on
the margin in year y
EGm,y = Net quantity of electricity generated and delivered to the grid by power unit m in year y
(MWh)
EGk,y = Net quantity of electricity generated and delivered to the grid by power unit k in year y
(MWh)
EFEL,m,y = CO2 emission factor of power unit m in year y (tCO2/MWh)
EFEL,k,y = CO2 emission factor of power unit k in year y (tCO2/MWh)
m = All grid power units serving the grid in year y except low-cost/must-run power units
k = All low-cost/must run grid power units serving the grid in year y
y = The relevant year as per the data vintage chosen in Step 3

5
As described above, an import from a connected electricity system should be considered as one power source.
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EFEL,m,y, EFEL,k,y, EGm,y and EGk,y should be determined using the same procedures as those for the
parameters EFEL,m,y and EGm,y in Option A of the simple OM method above.
If off-grid power plants are included in the operating margin emission factor, off-grid power plants should
be treated as other power units m.
Net electricity imports must be considered low-cost/must-run units k.

The parameter λy is defined as follows:

Number of hours low - cost / must - run sources are on the margin in year y
λ y (% ) = (9)
8760 hours per year

Lambda (λy) should be calculated as follows (see figure below):

Step (i) Plot a load duration curve. Collect chronological load data (typically in MW) for each hour
of the year y, and sort the load data from the highest to the lowest MW level. Plot MW against
8760 hours in the year, in descending order.

Step (ii) Collect power generation data from each power plant/unit. Calculate the total annual
generation (in MWh) from low-cost/must-run power plants/units (i.e. ∑k EGk,y).

Step (iii) Fill the load duration curve. Plot a horizontal line across the load duration curve such that the
area under the curve (MW times hours) equals the total generation (in MWh) from low-
cost/must-run power plants/units (i.e. ∑k EGk,y).

Step (iv) Determine the “Number of hours for which low-cost/must-run sources are on the margin in
year y”. First, locate the intersection of the horizontal line plotted in Step (iii) and the load
duration curve plotted in Step (i). The number of hours (out of the total of 8760 hours) to the
right of the intersection is the number of hours for which low-cost/must-run sources are on the
margin. If the lines do not intersect, then one may conclude that low-cost/must-run sources do
not appear on the margin and λy is equal to zero.

In determining λy only grid power units (and no off-grid power plants) should be considered.
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Step i: Draw Load Duration Curve

Intersection Point
MW

Step Iv: Estimate

Step iii: Fill Curve with hours Low-Cost/
Low-Cost/Must-Run Must-Run on the
Generation (MWh) margin

X hours
λ = X / 8760

Hours
0 8760

Note: Step (ii) is not shown in the figure; it deals with organizing data by source.

Figure 1: Illustration of Lambda Calculation for Simple Adjusted OM Method

(c) Dispatch data analysis OM

The dispatch data analysis OM emission factor (EFgrid,OM-DD,y) is determined based on the grid power units
that are actually dispatched at the margin during each hour h where the project is displacing grid
electricity. This approach is not applicable to historical data and, thus, requires annual monitoring of
EFgrid,OM-DD,y.
The emission factor is calculated as follows:

∑ EG PJ, h ⋅ EFEL, DD, h

EFgrid,OM − DD, y = h
(10)
EG PJ, y
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Where:
EFgrid,OM-DD,y = Dispatch data analysis operating margin CO2 emission factor in year y (tCO2/MWh)
EGPJ,h = Electricity displaced by the project activity in hour h of year y (MWh)
EFEL,DD,h = CO2 emission factor for grid power units in the top of the dispatch order in hour h in
year y (tCO2/MWh)
EGPJ,y = Total electricity displaced by the project activity in year y (MWh)
h = Hours in year y in which the project activity is displacing grid electricity
y = Year in which the project activity is displacing grid electricity
If hourly fuel consumption data is available, then the hourly emissions factor is determined as:

∑ FC i, n, h ⋅ NCVi, y ⋅ EFCO2,i, y
EFEL, DD, h = i, n
(11)
∑ EG
n
n, h

Where:
EFEL,DD,h = CO2 emission factor for grid power units in the top of the dispatch order in hour h in
year y (tCO2/MWh)
FCi,n,h = Amount of fossil fuel type i consumed by grid power unit n in hour h (Mass or volume
unit)
NCVi,y = Net calorific value (energy content) of fossil fuel type i in year y (GJ/mass or volume
unit)
EFCO2,i,y = CO2 emission factor of fossil fuel type i in year y (tCO2/GJ)
EGn,h = Electricity generated and delivered to the grid by grid power unit n in hour h (MWh)
n = Grid power units in the top of the dispatch (as defined below)
i = Fossil fuel types combusted in grid power unit n in year y
h = Hours in year y in which the project activity is displacing grid electricity
y = Year in which the project activity is displacing grid electricity

Otherwise, the hourly emissions factor is calculated based on the energy efficiency of the grid power unit
and the fuel type used, as follows:

∑ EG × EF n,h EL , n , y
EFEL,DD, h = n
(12)
∑ EG n
n,h

Where:
EFEL,DD,h = CO2 emission factor for grid power units in the top of the dispatch order in hour h in
year y (tCO2/MWh)
EGn,h = Net quantity of electricity generated and delivered to the grid by grid power unit n in
hour h (MWh)
EFEL,n,y = CO2 emission factor of grid power unit n in year y (tCO2/MWh)
n = Grid power units in the top of the dispatch (as defined below)
h = Hours in year y in which the project activity is displacing grid electricity
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The CO2 emission factor of the grid power units n (FEEL,n,y) should be determined as per the guidance for
the simple OM, using the Options A1, A2 or A3.
To determine the set of grid power units n that are in the top of the dispatch, obtain from a national
dispatch centre:
• The grid system dispatch order of operation for each grid power unit of the system including
power units from which electricity is imported; and
• The amount of power (MWh) that is dispatched from all grid power units in the system during
each hour h that the project activity is displacing electricity.

At each hour h, stack each grid power unit’s generation using the merit order. The group of grid power
units n in the dispatch margin includes the units in the top x% of total electricity dispatched in the hour h,
where x% is equal to the greater of either:
(a) 10%; or
(b) The quantity of electricity displaced by the project activity during hour h divided by the total
electricity generation by grid power plants during that hour h.

(d) Average OM
The average OM emission factor (EFgrid,OM-ave,y) is calculated as the average emission rate of all power
plants serving the grid, using the methodological guidance as described under (a) above for the simple
OM, but including in all equations also low-cost/must-run power plants.

Option B should only be used if the necessary data for Option A is not available.

Step 5: Identify the group of power units to be included in the build margin
The sample group of power units m used to calculate the build margin consists of either:6
(a) The set of five power units that have been built most recently;or
(b) The set of power capacity additions in the electricity system that comprise 20% of the system
generation (in MWh) and that have been built most recently.7
Project participants should use the set of power units that comprises the larger annual generation.
As a general guidance, a power unit is considered to have been built at the date when it started to supply
electricity to the grid.
Power plant registered as CDM project activities should be excluded from the sample group m. However,
If the group of power units, not registered as CDM project activity, identified for estimating the build
margin emission factor includes power unit(s) that is(are) built more than 10 years ago then:

6
If this approach does not reasonably reflect the power plants that would likely be built in the absence of the project
activity, project participants are encouraged to submit alternative proposals for consideration by the CDM
Executive Board.
7
If 20% falls on part capacity of a unit, that unit is fully included in the calculation.
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(i) Exclude power unit(s) that is (are) built more than 10 years ago from the group; and
(ii) Include grid connected power projects registered as CDM project activities, which are
dispatched by dispatching authority to the electricity system.8
Capacity additions from retrofits of power plants should not be included in the calculation of the build
margin emission factor.
In terms of vintage of data, project participants can choose between one of the following two options:
Option 1: For the first crediting period, calculate the build margin emission factor ex ante based on the
most recent information available on units already built for sample group m at the time of CDM-PDD
submission to the DOE for validation. For the second crediting period, the build margin emission factor
should be updated based on the most recent information available on units already built at the time of
submission of the request for renewal of the crediting period to the DOE. For the third crediting period,
the build margin emission factor calculated for the second crediting period should be used. This option
does not require monitoring the emission factor during the crediting period.
Option 2: For the first crediting period, the build margin emission factor shall be updated annually,
ex post, including those units built up to the year of registration of the project activity or, if information up
to the year of registration is not yet available, including those units built up to the latest year for which
information is available. For the second crediting period, the build margin emissions factor shall be
calculated ex ante, as described in Option 1 above. For the third crediting period, the build margin
emission factor calculated for the second crediting period should be used.

The option chosen should be documented in the CDM-PDD.

Step 6: Calculate the build margin emission factor

The build margin emissions factor is the generation-weighted average emission factor (tCO2/MWh) of all
power units m during the most recent year y for which power generation data is available, calculated as
follows:

∑ EG × EF
m, y EL , m , y
EFgrid, BM, y =m
(13)
∑ EG
m
m, y

Where:
EFgrid,BM,y = Build margin CO2 emission factor in year y (tCO2/MWh)
EGm,y = Net quantity of electricity generated and delivered to the grid by power unit m in year y
(MWh)
EFEL,m,y = CO2 emission factor of power unit m in year y (tCO2/MWh)
m = Power units included in the build margin
y = Most recent historical year for which power generation data is available

8
This information shall be provided by the host country.
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The CO2 emission factor of each power unit m (EFEL,m,y) should be determined as per the guidance in
Step 4 (a) for the simple OM, using options A1, A2 or A3, using for y the most recent historical year for
which power generation data is available, and using for m the power units included in the build margin.
For off-grid power plants, EGm,y should be determined as per the guidance in Step 4.

Step 7: Calculate the combined margin emissions factor

The combined margin emissions factor is calculated as follows:

EFgrid, CM, y = EFgrid, OM, y × w OM + EFgrid, BM, y × w BM (14)

Where:
EFgrid,BM,y = Build margin CO2 emission factor in year y (tCO2/MWh)
EFgrid,OM,y = Operating margin CO2 emission factor in year y (tCO2/MWh)
wOM = Weighting of operating margin emissions factor (%)
wBM = Weighting of build margin emissions factor (%)
The following default values should be used for wOM and wBM:

• Wind and solar power generation project activities: wOM = 0.75 and wBM = 0.25 (owing to their
intermittent and non-dispatchable nature) for the first crediting period and for subsequent crediting
periods;
• All other projects: wOM = 0.5 and wBM = 0.5 for the first crediting period , and wOM = 0.25 and
wBM = 0.75 for the second and third crediting period,9 unless otherwise specified in the approved
methodology which refers to this tool.

Alternative weights can be proposed, as long as wOM + wBM = 1, for consideration by the Executive Board,
taking into account the guidance as described below. The values for wOM + wBM applied by project
participants should be fixed for a crediting period and may be revised at the renewal of the crediting
period.
Guidance on selecting alternative weights
The following guidance provides a number of project-specific and context-specific factors for developing
alternative operating and build margin weights to the above defaults. It does not, however, provide
specific algorithms to translate these factors into quantified weights, nor does it address all factors that
might conceivably affect these weights. In this case, project participants are suggested to propose specific
quantification methods with justifications that are consistent with the guidance provided below.
Given that it is unlikely that a project will impact either the OM or BM exclusively during the first
crediting period, it is suggested that neither weight exceed 75% during the first crediting period.

9
Project participants can submit alternative proposal, for revision of tool or the methodology or deviation from its
use, if the weightage does not reflect their situation with an explanation for the alternative weights.
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Factor Summary – Impact on Further Explanation

weights
Project size (absolute or No change in weight on basis Alternative weights on the basis of absolute or relative
relative to the grid size of absolute or relative size project size alone do not appear to be justified
of the system or the size alone
of other system capacity
additions)
Timing of project Can increase OM weight for Projects with output is mainly off-peak can have a
output highly off-peak projects; greater OM weight (e.g. solar PV projects in evening
increase BM for highly on- peak regions, seasonal biomass generation during off-
peak projects peak seasons), whereas projects with disproportionately
high output during on-peak periods (e.g. air
conditioning efficiency projects in some grids) can have
greater BM weight

Predictability of project Can increase OM for Projects with output of an intermittent nature (e.g. wind
output intermittent resources in some or solar projects) may have limited capacity value,
contexts depending on the nature of the (wind/solar) resource
and the grid in question, and to the extent that a
project’s capacity value is lower than that of a typical
grid resource its BM weight can be reduced. Potential
adjustments to the OM/BM margin should take into
account available methods (in technical literature) for
estimating capacity value10
Suppressed demand Can increase BM weight for Under conditions of suppressed demand that are
the 1st crediting period expected to persist through over half of the first
crediting period across a significant number of hours
per year, available power plants are likely to be
operated fully regardless of the CDM project, and thus
the OM weight can be reduced11
For system management (nature of local electricity markets, planning, and actors) and other considerations no
guidance is available at present.

Data and parameters not monitored

Included in the monitoring methodology.

10
Capacity value refers to the impact of a capacity addition on the capacity requirements of a grid system, expressed
as fraction of contribution to meeting peak demands relative to a conventional, dispatchable capacity addition or
to a theoretical perfectly reliable one.
11
In other words, if, consistent with paragraph 46 of the CDM modalities and procedures, one assumes that
electricity could otherwise be supplied to meet suppressed demand, this electricity would need to be provided by
the construction and operation of new power plants, which is embodied in the build margin. In some cases, the
reason for suppressed demand may be the inability to operate existing power plants, due, for example, to lack of
spare parts or lack of availability or ability to pay for fuel. In such circumstances, the baseline scenario could
represent the operation of these power plants, in which case the baseline emission factor should reflect their
characteristics. This situation would likely require a new methodology.
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III. MONITORING METHODOLOGY

All data collected as part of monitoring should be archived electronically and be kept at least for 2 years
after the end of the last crediting period. 100% of the data should be monitored if not indicated otherwise
in the tables below. All measurements should be conducted with calibrated measurement equipment
according to relevant industry standards.
Some parameters listed below under “data and parameters” either need to be monitored continuously
during the crediting period or need to be calculated only once for the crediting period, depending on the
data vintage chosen, following the provisions in the baseline methodology procedure outlined above and
the guidance on “monitoring frequency” for the parameter.
The calculation of the operating margin and build margin emission factors should be documented
electronically in a spreadsheet that should be attached to the CDM-PDD. This should include all data
used to calculate the emission factors, including:
• For each grid-connected power plant/unit the following information:

o Information to clearly identify the plant;

o The date of commissioning;
o The capacity (MW);
o The fuel type(s) used;
o The quantity of net electricity generation in the relevant year(s);12
o If applicable: the fuel consumption of each fuel type in the relevant year(s);
o In case where the simple OM or the simple adjusted operating margin is used: information
whether the plant/unit is a low-cost/must-run plant/unit;

• Net calorific values used;

• CO2 emission factors used;
• Plant efficiencies used;
• Identification of the plants included in the build margin and the operating margin during the
relevant time year(s);

• In case the simple adjusted operating margin is used: load data (typically in MW) for each hour of
the year y;

• In case the dispatch data operating margin is used: for each hour h where the project plant is
displacing grid electricity:

o The dispatch order of all grid-connected power plants;

o The total grid electricity demand;
o The quantity of electricity displaced by the project activity;

12
In case of the simple adjusted OM, this includes the five most recent years or long-term averages for
hydroelectricity production.
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o Identification of the plants that are in the top of the dispatch and for each plant
information on electricity generation and, where hourly fuel consumption data is
available, data on the types and quantities of fuels consumed during that hour.

In case off-grid power plants are included, the guidance for monitoring data and parameters related to off-
grid plants provided in Annex 2 should also be followed.
The data should be presented in a manner that enables reproducing of the calculation of the build margin
and operating margin grid emission factor.

Data and parameters

Data / Parameter: FCi,m,y, FCi,y, FCi,k,y, FCi,n,y and FCi,n,h
Data unit: Mass or volume unit
Description: Amount of fossil fuel type i consumed by power plant / unit m, k or n (or in the
project electricity system in case of FCi,y) in year y or hour h
Source of data: Utility or government records or official publications
Measurement -
procedures (if any):
Monitoring • Simple OM, simple adjusted OM, average OM: Either once for each crediting
frequency: period using the most recent three historical years for which data is available
at the time of submission of the CDM-PDD to the DOE for validation
(ex ante option) or annually during the crediting period for the relevant year,
following the guidance in Step 3 above;
• Dispatch data OM: If available, hourly (as per Step 3 above), otherwise
annually for the year y in which the project activity is displacing grid
electricity or, if available, hourly. Further guidance can be found in Step 3
above;
• BM: For the first crediting period, either once ex ante or annually ex post,
following the guidance included in Step 5. For the second and third crediting
period, only once ex ante at the start of the second crediting period
QA/QC procedures: -
Any comment:
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Data / Parameter: NCVi,y

Data unit: GJ/mass or volume unit
Description: Net calorific value (energy content) of fossil fuel type i in year y
Source of data: The following data sources may be used if the relevant conditions apply:

Data source Conditions for using the data source

Values provided by the fuel supplier If data is collected from power plant
of the power plants in invoices operators (e.g. utilities)
Regional or national average default If values are reliable and
values documented in regional or national
energy statistics / energy balances
IPCC default values at the lower
limit of the uncertainty at a 95%
confidence interval as provided in
Table 1.2 of Chapter 1 of Vol. 2
(Energy) of the 2006 IPCC
Guidelines on National GHG
Inventories
Measurement -
procedures (if any):
Monitoring • Simple OM, simple adjusted OM, average OM: Either once for each crediting
frequency: period using the most recent three historical years for which data is available
at the time of submission of the CDM-PDD to the DOE for validation
(ex ante option) or annually during the crediting period for the relevant year,
following the guidance in Step 3 above;
• Dispatch data OM: Annually for the year y in which the project activity is
displacing grid electricity or, if available, hourly. Further guidance can be
found in Step 3 above;
• BM: For the first crediting period, either once ex ante or annually ex post,
following the guidance included in Step 5. For the second and third crediting
period, only once ex ante at the start of the second crediting period
QA/QC procedures:
Any comment: The gross calorific value (GCV) of the fuel can be used, if gross calorific values
are provided by the data sources used. Make sure that in such cases also a gross
calorific value basis is used for CO2 emission factor
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Data / Parameter: EFCO2,i,y and EFCO2,m,i,y

Data unit: tCO2/GJ
Description: CO2 emission factor of fossil fuel type i used in power unit m in year y
Source of data: The following data sources may be used if the relevant conditions apply:

Data source Conditions for using the data source

Values provided by the fuel supplier If data is collected from power plant
of the power plants in invoices operators (e.g. utilities)
Regional or national average default If values are reliable and
values documented in regional or national
energy statistics / energy balances
IPCC default values at the lower
limit of the uncertainty at a 95%
confidence interval as provided in
table 1.4 of Chapter1 of Vol. 2
(Energy) of the 2006 IPCC
Guidelines on National GHG
Inventories

Measurement -
procedures (if any):
Monitoring • Simple OM, simple adjusted OM, average OM: Either once for each
frequency: crediting period using the most recent three historical years for which data is
available at the time of submission of the CDM-PDD to the DOE for
validation (ex ante option) or annually during the crediting period for the
relevant year, following the guidance in Step 3 above;
• Dispatch data OM: Annually for the year y in which the project activity is
displacing grid electricity or, if available, hourly. Further guidance can be
found in Step 3 above;
• BM: For the first crediting period, either once ex ante or annually ex post,
following the guidance included in Step 5. For the second and third crediting
period, only once ex ante at the start of the second crediting period
QA/QC procedures: -
Any comment: -
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Data / Parameter: EGm,y, EGy, EGk,y and EGn,h

Data unit: MWh
Description: Net electricity generated by power plant/unit m, k or n (or in the project
electricity system in case of EGy) in year y or hour h
Source of data: Utility or government records or official publications
Measurement -
procedures (if any):
Monitoring • Simple OM, simple adjusted OM, average OM: Either once for each crediting
frequency: period using the most recent three historical years for which data is available
at the time of submission of the CDM-PDD to the DOE for validation (ex-
ante option); or annually during the crediting period for the relevant year,
following the guidance in Step 3 above;
• Dispatch data OM: Hourly. Further guidance can be found in Step 3 above;
• BM: For the first crediting period, either once ex ante or annually ex post,
following the guidance included in Step 5. For the second and third crediting
period, only once ex ante at the start of the second crediting period
QA/QC procedures: -
Any comment: -

Data / Parameter: EGPJ,h and EGPJ,y

Data unit: MWh
Description: Electricity displaced by the project activity in hour h of year y, or in year y
Source of data: As specified by the underlying methodology
Measurement As specified by the underlying methodology
procedures (if any):
Monitoring Hourly or yearly, as applicable
frequency:
QA/QC procedures: As specified by the underlying methodology
Any comment:

Data / Parameter: ηm,y and ηk,y

Data unit: -
Description: Average net energy conversion efficiency of power unit m or k in year y
Source of data: Use either:
• Documented manufacturer’s specifications (if the efficiency of the plant
is not significantly increased through retrofits or rehabilitations); or
• For grid power plants: data from the utility, the dispatch center or official
records if it can be deemed reliable; or
• The default values provided in the table below in Annex 1 (if available
for the type of power plant)
Measurement -
procedures (if any):
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Monitoring Once for the crediting period

frequency:
QA/QC procedures: If the data obtained from the manufacturer, the utility, the dispatch center of
official records is significantly lower than the default value provided in Annex 1
for the applicable technology, project proponents should assess the reliability of
the values, and provide appropriate justification if deemed reliable. Otherwise,
the default values provided in Annex 1 shall be used
Any comment:

Data / Parameter: CAPm

Data unit: MW
Description: Total capacity of off-grid power plants included in off-grid power plant class m
Source of data: Survey on off grid-power plants, as per Annex 2
Measurement As per Annex 2
procedures (if any):
Monitoring As per the provisions in Step 3 of this tool
frequency:
QA/QC procedures: -
Any comment: Only applicable if Option II is chosen in Step 2 of this tool

Data / Parameter: PLFdefault,off-grid,y

Data unit: dimensionless
Description: Plant load factor for off-grid generation in year y
Source of data: Default value of 300 hours per year, or calculate on the basis of equation 7
Measurement -
procedures (if any):
Monitoring As per the provisions in Step 3 of this tool
frequency:
QA/QC procedures: -
Any comment: Only applicable if Option II is chosen in Step 2 of this tool and if Option 3 is
chosen to determine EGm,y in Step 4 of this tool

Data / Parameter: Tgrid,y

Data unit: hours
Description: Average time the grid was available to final electricity consumers in year y
Source of data: Utility or government records or official publications
Measurement -
procedures (if any):
Monitoring -
frequency:
QA/QC procedures: -
Any comment: Only applicable if Option II is chosen in Step 2 of this tool and if Option 3 is
chosen to determine EGm,y in Step 4 of this tool and if equation (7) is applied
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Data / Parameter: Other parameters related to off-grid power plants

Data unit: As per Annex 2
Description: As per Annex 2
Source of data: As per Annex 2
Measurement As per Annex 2
procedures (if any):
Monitoring As per Annex 2
frequency:
QA/QC procedures: As per Annex 2
Any comment: -
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Annex 1: Default efficiency factors for power plants

Grid power plants

Generation Technology Old units (before and in 2000) New units (after 2000)
Coal - -
Subcritical 37% 39%
Supercritical - 45%
Ultra-upercritical - 50%
IGCC - 50%
FBS 35.5% -
CFBS 36.5% 40%
PFBS - 41.5%
Oil - -
Steam turbine 37.5% 39%
Open cycle 30% 39.5%
Combined cycle 46% 46%
Naural gas - -
Steam turbine 37.5% 37.5%
Open cycle 30% 39.5%
Combined cycle 46% 60%

Off-grid power plants

Nominal capacity of power plants (CAP, in kW)

Generation CAP≤10 10<CAP≤50 50<CAP≤100 100<CAP≤200 200<CAP≤400 400<CAP≤1000 CAP>1000

Technology

Reciprocant engine 28% 33% 35% 37% 39% 42% 45%

system (e.g. diesel-,
fuel oil-, gas-
engines)

Gas turbine systems 28% 32% 34% 35% 37% 40% 42%

Small 7% 7% 7% 7% 7% 7% N/A
boiler/steam/turbine
system
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Annex 2: Procedures related to off-grid power generation

The procedures in this annex serve to (a) identify those off-grid power plants that are eligible for inclusion
in the grid emission factor and to (b) collect the necessary data to include them in the calculations of the
operating and build margin emission factors of this tool.

Step 1: Obtain data on off-grid power generation

Data on off-grid power generation is usually not readily available and has to be collected to include off-
grid power generation in the grid emission factor. The collection of data on off-grid power generation has
two purposes: data is required to determine whether an identified power plant qualifies as “off-grid power
plant”, as defined in the definitions section; and data is required to calculate the emissions and electricity
generation from off-grid power plants.
For this purpose, project proponents can conduct an own survey, or use existing data (if such data provides
the necessary information as outlined further below and if the existing data has the vintage as required per
this tool).
The collected data can be used in the following two ways:
(a) Direct use of data on a plant-by-plant basis: Include in the emission factor only those off-grid
power plants for which the necessary data is available or is collected. Ensure that the plants
selected for inclusion in the grid emission factor are reasonably representative for the overall off-
grid power generation in the electricity system;13
(b) Statistical evaluation of the data based on sampling: Collect the necessary data for a
representative and appropriately stratified sample of off-grid power plants and infer the data to the
entire electricity system.

Document in the CDM-PDD which approach is followed.

Step 1.1: Choose the data to be collected

Document which data is collected for each (sampled) off-grid power plant. Table 1 provides the minimum
data that must be collected for each (sampled) off-grid power plant p.

13
For example, information on off-grid power generation could only be available for some sectors of the economy.
In this case, only the plants from these sectors may be included in the grid emission factor. However, in including
selected plants, no systematic bias should be introduced (e.g. by including only coal fired plants).
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Table 1: Minimum data/information to be collected on each off-grid power plant p

Data Description
CAPp: Nominal electric capacity of the off-grid power plant p (MW)
TECHp: The type of technology of the off-grid power plant p. This should include, inter alia, the
following types of technologies:
(a) Reciprocating engines
(b) Steam turbine
(c) Gas turbine
(d) Combined cycle power generation
(e) Hydro, solar wind or geothermal power generation
FUELp: The fuel type(s) used in the off-grid power plant p. This should include at least the
following fuel types:
(a) Diesel
(b) Gasoline
(c) Kerosene
(d) Natural gas
(e) Coal
(f) Biomass/biofuels
(g) Any relevant blends or other fuels
GRIDp: Are the consumers supplied by the off-grid power plant also connected to an electricity grid
which is capable of supplying their power demand entirely during time intervals where grid
electricity is available, reliable and stable? (True/false)
SWITCHp: Can the consumers supplied by the off-grid power plant easily switch between electricity
supply from the grid and off-grid power plants? This applies, for example, if the consumers
have a manual or automatic change-over-switch system in place. (True/false)

In addition, other data may be collected, depending on how the requirements of this annex for inclusion of
an off-grid power plant p in the grid emission factor are assessed and on which options are used in Step 3
of the tool to calculate the emission factor for a class of off-grid power plants m (Option A1, A2 or A3)
and the electricity generation by a class of off-grid power plants m (Option 1, 2 or 3). This may include
the following data:

Table 2: Additional data that may be collected on off-grid power generation

Data Description Explanation
DATEstart,p: Year of first commissioning of the off-grid This data is required for inclusion of off-grid
power plant p (year) power in the BM emission factor
EGp,y: Electricity generation of off-grid power This data is required if Option 1 is used to
plant p in year y (MWh) determine EGm,y in Step 4 of the tool
FCp,i,y: Amount of fuel type i consumed by off-grid This data is required if Option A1 in Step 4 of
power plant p in year y (mass or energy this tool is applied of if Option 2 is used to
unit) determine EGm,y in Step 4 of the tool
NCVp,i,y: Net calorific value of fuel type i consumed This data is required if Option A1 or Option 2
by off-grid power plant p in year y in Step 4 of this tool is applied and if the
(GJ/mass or energy unit) IPCC default values are not used
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Data Description Explanation

OMCp,y: Variable operation and maintenance costs This is data is required if in Step 2 the third
of off-grid power plant p in year y condition is demonstrated by using Option (a)
(currency/MWh)
TEL,p,y: Tariff of purchasing grid electricity for This is data is required if in Step 2 the third
consumers supplied by off-grid power plant condition is demonstrated by using Option (a)
p in year y

Note that the same data collection approach should be applied to all off-grid plants in one sector (e.g.
industrial, commercial and residential sector).

Step 1.2: Define the classification of off-grid power plants

To facilitate data collection and calculations, off-grid power plants should be classified in different classes
of off-grid power plants. All off-grid power plants included in one class are considered as one single
power unit for the calculations in this tool.
Off-grid power plants should be classified according to their capacity (CAPp), fuel type (FUELp), and type
of technology (TECHp). If off-grid power plants are also included in the build margin, their vintage needs
to be determined based on the start date of operation (DATEstart,p). In this case, the classes have to be
differentiated into three data vintages: plants with up to five years of operation, plants with up to 10 years
of operation and plants with more than 10 years of operation.
If default efficiencies, as provided in Annex 1 of this tool, are used to determine the emission factor for a
power plant (see Option A2 in Step 4 of this tool), the power plant classification provided in Annex 1
should be used. If the Options A1 and/or A3 in Step 4 of this tool are applied to determine the emission
factors for off-grid power plant classes, project participants may also use their own classification.

Step 1.3: Define the sectors for which data is collected

Define for which sectors (e.g. households, commercial sector) or industries data on off-grid electricity
generation is collected or whether data is collected for the whole economy. The project participants may
deliberately choose the sectors for which data is collected; however, the sectors should be clearly and
unambiguously defined (e.g. which size of companies or households, the geographical area covered, etc)
and the selection should include any systematic bias (e.g. by including only a sub-sector which uses only
coal as fuel while less carbon intensive fuels are used in other sub-sectors).

Step 1.4: Establish the survey design and management scheme (applicable if a survey is used)
Document transparently the design and methodology of the survey, following best practices in survey
design and statistics. In doing so, the following guidance shall be applied:
• The institution conducting the survey should have relevant experience with undertaking surveys;
• Ensure a proper stratification within the geographical area of the electricity system and within the
different users of off-grid power generation (e.g. considering relevant differences between sectors,
household income, etc). To this end, it may be necessary to conduct a pre-survey to collect
information which sectors, companies or households typically use off-grid power plants;
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• The results of the survey should be used to derive global estimates adjusted for their uncertainty at
a 95% confidence level in a conservative manner (using the upper or lower uncertainty bound
whatever is conservative);
• The methods used to collect data should strive to avoid any bias and should ensure random
sampling in the various strata;
• Provide objective and transparent methods for data collection;
• Ensure that appropriate procedures for data verification are in place, including relevant quality
assurance and quality control methods;
The DOE should carefully evaluate and confirm that the survey was conducted in accordance with these
principles and best practices for conducting and evaluating surveys.

Step 1.5: Collect the data or use existing data sources

Collect the data or use relevant existing data sources. Exclude all plants for the sample for which not all
necessary data (as identified in Step 1.1 of this annex) could be collected.

Step 2: Exclude plants that do not qualify as off-grid power plants

This step aims to exclude those power plants from the sample or other data source which cannot be
considered as off-grid power plants according to the definition provided above. To this end, exclude those
plants from the sample or other source of information for which one of the three following conditions is
not met:
• GRIDp = true;
• SWITCHp = true;
• Whenever the grid is reliable and stable, the consumers purchase electricity only from the grid and
the off-grid power plant is not operating. This can be demonstrated in one of the following ways:

(a) OMCp,y > TEL,p,y; or

(b) Log book data on the hours of operation of the off-grid power plant p and the quality and
availability of grid supply clearly shows that the plant only operated when the grid was
not reliable and stable; or
(c) Demonstrate that OMC > TEL once for all off-grid power plants included in a class of off-
grid power plants and a sector by showing that this condition generally applies to all
plants in the class and sector, e.g. using the fuel costs (e.g. official statistics or
projections on fuel prices), the efficiency of the plants in that class (e.g. using typical the
default efficiencies provided in Annex 1) and relevant information on electricity purchase
costs in the sector (e.g. statistics on electricity prices).

Step 3: Aggregate data according to classes of off-grid power plants

In the case of direct use of the data on a plant-by-plant basis (Option a in the introduction to Step 1),
allocate the collected data to the classes of off-grid power plants.
In the case of a statistical evaluation of the data based on sampling (Option b in the introduction to Step 1),
allocate the collected data to the applicable stratum. Use the results of the survey to derive global
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estimates for the total population, for each class of off-grid power plants m, adjusting conservatively for
the uncertainty at a 95% confidence level.14

Step 4: Assess the extent of off-grid power

The effects of feeding additional electricity to the grid or saving electricity demand on off-grid power
plants connected to the system are associated with significant uncertainty. For this reason, a significant
amount of off-grid power should exist to include these plants in the grid emission factor.
The inclusion of off-grid power plants in the grid emission factor is only allowed if one of the following
two conditions are met:

• The total capacity of off-grid power plants (in MW) is at least 10% of the total capacity of grid
power plants in the electricity system; or
• The total power generation by off-grid power plants (in MWh) is at least 10% of the total power
generation by grid power plants in the electricity system.
If one of these conditions are not met, then off-grid power plants cannot be included in the calculation of
the grid emission factor of the electricity system. Otherwise, proceed to next step.

Step 5: Assess the reliability and stability of the grid and that this is primarily due to constraints in
generation, and not to other aspects such as transmission capacity
It has to be demonstrated that the grid to which project participants have access is not reliable and not
stable and that this is primarily due to constraints in generation and not due to other issues, such as limited
transmission capacity. To this end, it needs to be demonstrated that
• Shortages, blinks, black-outs, load shedding and/or large variations in frequency and voltage
ranges are common practice in the grid operation. Supporting evidence describing the number,
duration and extent of events related to instability and unreliability of the grid has to be provided
based on project participants or third parties statistics or surveys; and
• This situation is primarily due to constraints in generation, and not to other aspects such as
transmission capacity.

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14
Note that this should not include power plants which did not qualify as off-grid following the procedures in Step 2.
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History of the document

Version Date Nature of revision(s)

02 EB 50, Annex 14 • Inclusion of provisions to allow for the inclusion of off-grid power plants in
16 October 2009 the calculation of the electricity system emission factor; and
• Deletion of the previous Option A in the operating margin emission factor
calculation, as this option is covered by the previous Option B1 (A1 after
revision)
01.1 29 July 2008 Editorial revision to:
• Incorporate the “Tool to calculate baseline, project and/or leakage
emissions from electricity consumption”; and
• Provide additional clarification on the composition of a sample group for the
calculation of the build margin.
01 EB 48, Annex 5 Initial adoption.
17 July 2009
Decision Class: Regulatory
Document Type: Tool
Business Function: Methodology