PDD Kelar

CDM-PDD-FORM
Project design document form for

CDM project activities
(Version 08.0)
Complete this form in accordance with the Attachment “Instructions for filling out the project design document
form for CDM project activities” at the end of this form.
PROJECT DESIGN DOCUMENT (PDD)
Title of the project activity Kelar Natural Gas Combined Cycle Project
Version number of the PDD 06
Completion date of the PDD 22/03/2018
Project participant(s) BHP Chile Inc.
Host Party Chile
Applied methodology(ies) and,

where applicable, applied Methodology: ACM0025 Construction of a new natural gas
standardized baseline(s) power plant, Version 02.0
Sectoral scope(s) linked to the

applied methodology(ies) Sectoral Scope: 01
Estimated amount of annual average

GHG emission reductions 203,344
Version 08.0 Page 1 of 54

CDM-PDD-FORM
SECTION A. Description of project activity
A.1. Purpose and general description of project activity
Kelar Natural Gas Combined Cycle Project (hereinafter referred to as the Project or indistinctively
Kelar Project) consists in a Greenfield natural gas fired combined cycle power plant located in the
community of Mejillones in the north of Chile (hereafter, the “Host Country”) and connected to the
Grand North Interconnected System (hereinafter, the SING).
The Project was conceived by BHP Chile Inc. (hereinafter, BHP) with the aims of guaranteeing
electricity supply to cover the future demand of its mines Minera Escondida Limitada (hereinafter
“Escondida”) and “Cerro Colorado”.
The project was originally planned - in 2005 - as a 500 MW sub-critical coal fired power plant as
evidenced by the project EIA submitted to the national Environmental Impact Assessment System
(abbreviated in Spanish as SEA) on 09/11/2006 and approved on 26/10/2007.1
Nonetheless, in 2012, before the coal plant started construction, BHP decided to switch the fuel
source from coal to natural gas. The main reasons that justified this decision were:
i) New energy requirements from 2016: replace expiring contracts and supply project´s additional
energy needs;
ii) Kelar as a strategic asset to new players entering the market;
iii) Secure access to LNG re-gasification terminal in Mejillones (near Kelar site);
iv) Switching to gas could reduce GHG emissions and is technically friendly with intermittent
renewable energy (wind and solar) in terms of electricity supply stability, in opposition to coal
fueled units and
v) BHP strategy of providing secure, sustainable and price competitive power.
As a result, in 2012 BHP launched an international tender process for the construction, operation
and maintenance of Kelar project, which was, granted to the consortium integrated by Korea
Southern Power Co. (Kospo) and Samsung C&T Corporation, which signed a Build, Own, and
Operation and Maintenance (BOOM) contract with BHP by the end of 2013. As stated in the BOOM
contract2, the Consortium is considered as the Independent Power Producer (IPP), and its main roles
and functions in Kelar Project are to finance, develop, build, own, operate and maintain the project
in order to provide the agreed services to BHP. BHP is the power plant license owner that pays the
IPP for the services according to the long-term agreement and assumes the project´s commercial
risk by being responsible for the purchase of natural gas and electricity sales. The Consortium has
transferred, assigned and passed, with full legal and beneficial title guarantee, all right, title, benefit
and interest, present and future, in the present CDM project and its CERs to BHP.3
The gas-steam combined cycle generation system consists of 2 gas turbine units 2 Heat Recovery
Steam Generator units and 1 steam turbine. The guaranteed capacity of the natural gas combined
cycle is 516.775 MW. The 10 years’ crediting period average load factor of the power plant is
estimated to be 71.05%. Therefore, the estimated annual net electricity generation is 3,216,521
MWh/yr.
As a Greenfield power plant, the scenario existing prior to its implementation was the generation of
the equivalent amount of electricity to be delivered to the SING by the Project, by the operation of
1 Kelar Coal Thermal Power Plant EIA approval process and documents; General Background; SEA
webpage. Available at:
http://seia.sea.gob.cl/expediente/expedientesEvaluacion.php?modo=ficha&id_expediente=1853582
2 BOOM Contract, page 1. Available to the DOE at validation.
3 BOOM contract, article 7. Available to the DOE at validation.

CDM-PDD-FORM
the power plants connected to the SING. The SING is the second major electricity system of the
country4, representing 22% of the installed capacity and 26% of the electricity generated in the
country in 20155. The system is highly reliant on coal based thermal generation that reached the
76% of the electricity generated by the power plants connected to this system.
The baseline scenario, as identified in section B.4 below, is the construction of a new subcritical
coal power plant connected to the SING.
The estimated annual average and total GHG emissions reductions for the 10 years crediting period
are 203,344 tCO2e/year and 2,033,440 tCO2e, respectively.
Additionally, the project will contribute to the sustainable development of Chile, by, among others:
- Diversifying the energy matrix through the implementation of a cleaner and more efficient
technology in a country and particularly an electricity system (SING) where coal is the
predominant source of energy for electricity generation;
- Increasing the security of the electricity supply in the country;
- Improving local air quality by reducing local air pollutants (SO2, NOx and PM) emissions produced
by coal based power plants, and thus, enhancing public health;
- Increasing employment opportunities in the area where the project is located, leading to a general
increase in local/community income;
- Generating jobs and contributing to the development of technical skills;
- Encouraging the development of further modern and more efficient energy units throughout the
country; and
- Supporting technology and know-how transference from other regions/countries.
Finally, it is confirmed that the proposed CDM project activity is not a CPA that has been excluded
from a registered CDM PoA as a result of erroneous inclusion of CPAs.
A.2. Location of project activity
A.2.1. Host Party
Chile
A.2.2. Region/State/Province etc.
Antofagasta Province, Antofagasta Region.
A.2.3. City/Town/Community etc.
4 The Chilean electricity matrix consists of four independent electricity systems: SIC, SING, Magallanes and
Aysén.
5 National Commission of Energy (CNE); Statistics/Energy/Electricity/Production and Consumption/Gross
generation SIC and SING; Gross generation Magallanes; and Gross generation Aysén;
http://www.cne.cl/estadisticas/energia/electricidad. Accessed on: 18/09/2016.
CDM-PDD-FORM
Community of Mejillones
A.2.4. Physical/Geographical location
The project is located in an area of 26.01 hectares of land called “Lot Block 20", in the Industrial
Port Zone of the Community of Mejillones. The project geographical coordinates are:
Corners Latitudes Longitudes

1 23° 1' 49.67" S 70° 20' 25.79" W
2 23° 2' 1.27" S 70° 20' 15.50" W
3 23° 2' 16.31" S 70° 20' 25.49" W
4 23° 2' 7.61" S 70° 20' 38.47" W
The following map show the precise location of the project.
A.3. Technologies and/or measures
The project is a Greenfiend Combined Cycle Gas Turbine (“CCGT”) power plant connected to the
Grand North Interconnected System (SING).
The net guaranteed installed capacity of the CCGT is 516.775 MW and the layout is based on a “2-
2-1” configuration: two gas turbo-generators, two HRSGs and one steam turbine (double casing
double shell condensing steam turbine type skoda with steam reheating).
The main technical parameters of the CCGT are presented below:

CDM-PDD-FORM
Value/Description Reference
Gas turbine generators (2)
Brand Alstom Nameplates photos
Topair
Model Nameplates photos
Turbogenerator
PM 100128 / PM
Serial numbers Nameplates photos
100124
Type 50WY21Z-095 Nameplates photos
Nameplate installed capacity
191.25 Nameplates photos
(MW)
Steam turbine generator (1)

Consolidated Technical Proposal – Section 2.1;
General; Page 40;
Doosan Skoda
Brand Training Manual for the Turbine; Kelar 177 MW;
Power
Part 2 – Main Specifications; Dossan Skoda
Power; 16/03/2016
Training Manual for the Turbine; Kelar 177 MW;
Serial number 4782 - 4783 Part 2 – Main Specifications; Dossan Skoda
Power; 16/03/2016
General; Page 40;
Model MTD 60 CR Training Manual for the Turbine; Kelar 177 MW;
Power; 16/03/2016
General; Page 40;
Nameplate Installed capacity
177 Training Manual for the Turbine; Kelar 177 MW;
(MW)
Power; 16/03/2016
Nominal pressure (bar) 120 Part 2 – Main Specifications; Dossan Skoda
Power; 16/03/2016
Nominal temperatura (°C) 496 Part 2 – Main Specifications; Dossan Skoda
Power; 16/03/2016
Live steam nominal mass flow
333.3 Part 2 – Main Specifications; Dossan Skoda
(t/h)
Power; 16/03/2016
CCGT
Guaranteed installed capacity BOOM, Appendix L, 2.1 Guaranteed Capacities,
516.775
(MW) Page 14
BOOM, Appendix L, Guaranteed Heat Rate,
Guaranteed heat rate (BTU/kWh) 6,331
Page 2
Guaranteed efficiency (%) 53.90% Calculated
Load factor (%) – 10 years’
Calculated as per BOOM Contract; Appendix D;
crediting period average 71.05%
Part II; 6.15 Communication; 29/11/2013
(01/04/2018 – 31/03/2028)
Net electricity generation
(MWh/year) - 10 years’ crediting 3,216,521 Calculated
period average
Project lifetime (years) 30 BOOM, Article 2. Term, Page 28 to 29.
Load factor (%) – project lifetime
Calculated as per BOOM Contract; Appendix D;
average (01/10/2016 – 75.27%
Part II;6.15 Communication; 29/11/2013
30/09/2046)
Net electricity generation
(MWh/year) – project lifetime 3,407,272 Calculated
average

CDM-PDD-FORM
- Project power plant load factors
As indicated in the above table, the 10 years crediting period (01/12/2017-30/11/2027) and the 30
years project lifetime (01/10/2016 – 30/09/2046) plant load factors (PLF) have been calculated
according to the plant generation profile in the SING Electrical System, established in the BOOM
contract (Part II; 6.15 Communication; 29/11/2013)6. The generation profile was elaborated by BHP
based on a modelling projection of the National Energy Commission (CNE) and taken into
consideration: the demand projection of the SING, the introduction of NCRE power plants in the
project time horizon and the dispatch merit order.
The 30 years’ project lifetime PLF is higher than the 10 years’ crediting period PLF mainly because
from 2021 onwards it is projected an increase of the electricity system demand due to the operation
start of new mining projects as illustrated in the demand forecasts of the SING customers (Customers
Demand 2013-2027 First Semester 2013) informed to the National Electric Coordinator (ex CDEC-
SING).7
Furthermore, it is important to consider that all power plants connected to the SING system operate
according to the National Electric Coordinator orders which daily determines the generation program
of the grid based on the marginal costs of the power plants8. Therefore, the dispatch ability of the
power plants is related to their marginal cost, which in the case of fossil fuel power plants is mainly
related to the fossil fuel (coal, fuel-oil, natural gas) costs that rely exclusively on market prices9.
Hence, the primary fuel cost highly impacts the power generation costs and determines if a power
plant is dispatched or not. As a result, fossil fuel power plants connected to the SING cannot be
deemed must-run. The CDEC-SING has confirmed that the generation program of the SING units is
carried out by them based on current regulations and in accordance with the Procedures established.
This regulation establishes that the planning, programming and operation of the system is done in
order to obtain the minimum overall cost, subject to security constraints, technical characteristics of
the transmission system, technical characteristics of generation units and projected demands. As a
result, the condition and dispatch level for each generation unit of the SING is obtained. Thus, in the
SING none of the power plants (coal, fuel oil and natural gas) are considered low-cost/must-run.10
Moreover, Kelar PLF projections for the first years (51% in 2016 and 56% in 2017) has been
compared with the real PLFs of the two similar NGCCs connected to the SING that started to operate
in 2014: CTM3 (361.12 MW) and U16 (250.75 MW)11,12. The PLFs of these power plants have been:
11.4% and 41.8% in 2015, respectively; 20.5% and 30.6% in 2016, respectively; and 15% and 22.7%
in 2017 (until 13/07/2017), respectively.13,14
6
Available to the DOE at validation.
7
Available at: http://cdec2.cdec-
sing.cl/pls/portal/cdec.pck_web_coord_elec.sp_pagina?p_id=5047&p_id_public_web=437&p_periodo=# Accessed on: 07/08/2017
8
Procedure short-term operational program; CDEC-SING; v1.0. Available at: http://cdec2.cdec-
sing.cl/pls/portal/cdec.pck_proc_dodp_pub.proced_hist_dodp_item?p_id=22&p_clasif_direcc=2&p_tipo_proc=DO&p_de_donde=W.
Accessed on: 08/08/2017.
9
Procedure cost of fuels of power plants; CDEC-SING; v04. Available at: http://cdec2.cdec-
sing.cl/pls/portal/cdec.pck_proc_dodp_pub.proced_hist_dodp_item?p_id=29&p_clasif_direcc=2&p_tipo_proc=DO&p_de_donde=W.
10
CDEC-SING communication; 07/02/2013. Provided to the DOE.
11
Generation Installed Capacity, CNE. Available at: http://www.cne.cl/estadisticas/electricidad/ Route of access: CNE website /
Statistics/Electricity/Infraestructure/Generation Installed Capacity.
12
It is important to take into account that these projects started commercial operation after the start date of the proposed project activity
(29/11/2013). Thus, they are not included in the common practice analysis. Atacama CC2 (384.7 MW) also started to operate in 2014, but
this NGCC as well as Atacama CC1 (which was included in the common practice analysis) PLFs cannot be compared with Kelar NGCC
because, as illustrated in the documentation provided to the DOE for validation, their PLFs are very low given that they operate mainly
with diesel.
13
Calculated according to data available in Electricity Generation Monthly Report; CDEC-SING; Available at: http://cdec2.cdec-
sing.cl/pls/portal/cdec.pck_web_coord_elec.sp_pagina?p_id=5169
14
Data and calculations provided to the DOE at validation.
CDM-PDD-FORM
Therefore, Kelar PLF projections are higher and can be deemed conservative.
- Energy flow and balance of the system and equipment included in the project (including
monitoring equipment)
The schematic representation of the energy flow and balance of the system and equipment included
in the project is presented in Section B.3 below.
- Scenario existing prior to the project implementation
The scenario existing prior to its implementation is the generation of the equivalent amount of
electricity to be delivered to the SING by the Project, by the operation of the power plants
connected to the SING given that this is a Greenfield project. Thus, there were no facilities,
systems and equipment in operation in the project site prior to its implementation.
- Baseline scenario:
The baseline scenario, as identified in section B.4 below, is the construction of a new subcritical
coal power plant connected to the SING. The facilities, systems and equipment under this scenario
are:
Coal subcritical power plant Value/Description Reference

Kelar Coal Thermal Power Plant EIA, Chapter 1,
Page 1-13 (approved on 26/10/2007; RCA
Gross Installed capacity (MW) 500 0341/200715);
http://seia.sea.gob.cl/expediente/expedientesEvalu
acion.php?modo=ficha&id_expediente=1853582
EIA Kelar Coal Thermal Power Plant, Chapter 1,
Page 1-33.
Net Installed capacity (MW) 443.2
http://seia.sea.gob.cl/expediente/expedientesEvalu
acion.php?modo=ficha&id_expediente=1853582
The efficiency of Kelar coal power plant would be
35 – 36% according to the EIA, page I-33.
Nevertheless, to be aligned with paragraph 30 of
the applicable methodology ACM0025 Version
02.0 that establishes that the efficiency shall
corresponds to the maximum efficiency of the
baseline technology at the optimal operating
conditions, the default efficiency for coal subcritical
Efficiency (%) 39%
grid connected power plants commissioned after
2012 (39%) has been selected according to the
methodological tool “Determining the baseline
efficiency of thermal or electric energy generation
systems”; Version 02.0; Appendix. Default
efficiency factors; Table 2. Default efficiency for
grid connected power plants;
Coal/Subcritical/Commissioning year>2012
Calculated to dispatch the same amount of
Load factor (%) 87.76%
electricity of the project activity
Net electricity generation Equal to Natural Gas Combined Cycle 30 years’
3,407,272
(MWh/year) lifetime average
EIA Kelar Coal Thermal Power Plant, Project
Description, page Cap 1-10.
Lifetime (years) 30
http://seia.sea.gob.cl/archivos/EIA/2013102201/EI
A_1853582_Descripcion_del_proyecto.pdf
15
Kelar coal power plant EIA approval; RCA 0341/2007; SEA. Available at:
http://seia.sea.gob.cl/externos/admin_seia_web/archivos/6488_2007_10_26_RE.pdf
CDM-PDD-FORM
Regarding the baseline power plant load factor, as illustrated in the table, it has been calculated to
dispatch the same amount of electricity of the project power plant. The justification of this approach
is that, as above stated, Kelar project was originally planned in 2005 as a 500 MW sub-critical coal
fired power plant. The generation profile indicated in the EIA of this power plant elaborated in 2006
corresponded to a modelling projection of the SING electricity system made by that time and no
longer valid in 2012, when BHP decided to switch the fuel source from coal to natural gas.
Additionally, as above mentioned, all power plants connected to the SING system operate according
to the National Electric Coordinator orders which daily determines the generation program of the grid
based on the marginal costs of the power plants. Therefore, the dispatch ability of the power plants
is related to their marginal cost, which in the case of fossil fuel power plants is mainly related to the
fossil fuel (coal, fuel-oil, natural gas) costs that rely exclusively on market prices. Hence, the primary
fuel cost highly impacts the power generation costs and determines if a power plant is dispatched or
not. As a result, fossil fuel power plants connected to the SING cannot be deemed must-run.
Furthermore, it is important to consider that, Kelar NGCC was conceived to provide the same output
than Kelar coal thermal power but updated to electricity generation projections elaborated in 2013.
Given that coal power plants generation costs are lower than natural gas power plants generation
costs they are dispatched before natural gas power plants, i.e.: coal thermal power plants PLF are
higher than natural gas power plants PLF.
Due to this reason, Kelar NGCC net installed capacity (516.775 MW) is higher than Kelar coal
thermal power plant (443.2 MW) to be able to generate and dispatch the same amount of electricity.
Moreover, the baseline coal thermal power plant PLFs (from 59.47% in 2016 up to 92.35% from
2023 onwards and 87.76% corresponding to the 30 years average) have been compared with the
actual PLFs of all operative coal thermal power plants connected to the SING in 2015, 2016 and
2017 (until 13/06/2017). The PLFs of these power plants is in average 68%; the lowest PLF is 53.3%
and the highest PLF is 91.3%.16,17,18
All baseline coal thermal power plant PLFs (the lowest, the highest and the lifetime average) are
higher that the above-mentioned values. Therefore, Kelar coal thermal PLFs can be deemed
conservative.
A.4. Parties and project participants

Private and/or public
Indicate if the Party involved
Party involved entity(ies) project
wishes to be considered as
(host) indicates host Party participants
project participant (Yes/No)
(as applicable)
Chile (host) BHP Chile Inc. (private entity) No
Important note: The construction and operation of Kelar project was granted by BHP to the
consortium integrated by Korea Southern Power Co. (Kospo) and Samsung C&T Corporation. The
Consortium is called the Independent Power Producer (IPP), and its main roles and functions in
Kelar Project are: investor, operator, plant owner. BHP is the plant license owner and assumes the
project´s commercial risk by being responsible for the purchase of natural gas and sale of
electricity.
16
Statistics/Electricity/Infraestructure/Generation Installed Capacity
17
18

CDM-PDD-FORM
The Consortium has transferred, assigned and passed, with full legal title and beneficial guarantee,
all right, title, benefit and interest, present and future, in the present CDM project and its CERs to
BHP.
A.5. Public funding of project activity
There is no public funding for the proposed project.
SECTION B. Application of selected approved baseline and monitoring

methodology and standardized baseline
B.1. Reference of methodology and standardized baseline
- ACM0025: Construction of a new natural gas power plant, Version 2.019

- Tool for the demonstration and assessment of additionality, Version 07.0.020
- Tool to calculate project or leakage CO2 emissions from fossil fuel combustion, Version 0321
- Tool to calculate the emission factor for an electricity system, Version 06.022
- Methodological tool: Determining the baseline efficiency of thermal or electric energy
generation systems, Version 02.023
- Methodological tool: Upstream leakage emissions associated with fossil fuel use, Version
02.024
- Methodological tool: Baseline, project and/or leakage emissions from electricity consumption
and monitoring of electricity generation, Version 03.025
- Methodological tool: Investment analysis, Version 08.026
- Methodological tool: Common practice, Version 03.127
B.2. Applicability of methodology and standardized baseline
The table below demonstrates how the applicability conditions of the selected methodology
ACM0025 Version 2.0 are met by the project activity and explains the documentation that has been
used to prove it:
19 Available at: https://cdm.unfccc.int/methodologies/DB/H60BQPTHMKITC6TRSIJL567VVWS0Z0; Accessed

on: 20/09/2016
20 Available at: http://cdm.unfccc.int/methodologies/PAmethodologies/tools/am-tool-01-v7.0.0.pdf; Accessed
on: 20/09/2016
21 Available at: https://cdm.unfccc.int/methodologies/PAmethodologies/tools/am-tool-03-v3.pdf; Accessed on:
03/12/2017
03/12/2017
23 Available at: http://cdm.unfccc.int/methodologies/PAmethodologies/tools/am-tool-09-v2.0.pdf; Accessed on:
20/09/2016
24 Available at: http://cdm.unfccc.int/methodologies/PAmethodologies/tools/am-tool-15-v2.0.pdf; Accessed on:
20/09/2016
25 Available at: https://cdm.unfccc.int/methodologies/PAmethodologies/tools/am-tool-05-v3.0.pdf; Accessed
on: 3/12/2017.
26 Available at: https://cdm.unfccc.int/methodologies/PAmethodologies/tools/am-tool-27-v8.pdf; Accessed on :
03/12/2017.
14/03/2017.

CDM-PDD-FORM
ACM0025 (Version 2.0) applicability Project compliance with the Documentation that has
criteria applicability condition been used to prove it
(a) The project activity is the The project activity is the Environmental Qualification
construction and operation of a construction and operation of Resolution (“RCA” due to its
new natural gas fired power plant a new natural gas combined acronym in Spanish)
that supplies electricity: (i) to the cycle power plant that supplies 0155/201328; and its
electric power grid; or (ii) to the electricity to the SING power modification RCA 0047/201529
electric power grid and to an grid.
electricity consuming facility(ies);
(b) If the project activity power plant Not applicable. The project EIA30
co-generates heat, no emission does not co-generate heat.
reductions can be claimed for the
generated heat;
(c) Natural gas is used as main fuel Natural gas will be the primary EIA
in the project power plant. Small fuel. In fact, the location of the
amounts of other start-up or project was decided so as to
auxiliary fuels can be used, but secure access to LNG re-
they shall not comprise more gasification terminal in
than one per cent of total fuel Mejillones (near Kelar site).
used annually, on an energy Black Start Diesel Generator
basis; will be used, but will comprise
no more than 1% of total fuel
use, on energy basis.
(d) Natural gas and/or Liquefied Natural gas is sufficiently References provided below.
Natural Gas (LNG) is sufficiently available in the region or
available in the region or country, country as below
e.g. future natural gas based demonstrated.
power capacity additions,
comparable in size to the project
activity, are not constrained by
the use of natural gas in the
project activity.
In 2012, LNG accounted for just 14%31 of total electricity generation in the SING, while coal was the
dominant fuel in the system. According to different specialists there is an important available capacity
to increase the production of electricity based on this fuel in the region. If Mejillones LNG terminal is
expanded, through relatively small investments, it could reach a regasification capacity of nearly
2,000 MW, an amount that is equivalent to the consumption of the whole SING. In fact, as it is
mentioned in GNL Mejillones web site32, the company is developing an expansion project to double
the regasification capacity of the terminal to 8.25 million m³/d increasing the equivalent capacity in
800 MW. This amount will almost double the fuel needs of Kelar Project.
28 Available at:
http://seia.sea.gob.cl/expediente/ficha/fichaPrincipal.php?modo=ficha&id_expediente=7547573; Accessed
on: 19/07/2016
29 Available at:
http://seia.sea.gob.cl/expediente/ficha/fichaPrincipal.php?modo=ficha&id_expediente=2129735252;
Accessed on: 19/07/2016
30 Available at:
http://seia.sea.gob.cl/expediente/expedientesEvaluacion.php?modo=ficha&id_expediente=7547573;
31 http://www.gnlm.cl/sitio/acerca-del-gnl/gnl-en-chile/
32
http://www.gnlm.cl/sitio/proyectos/cuarto-tren-de-regasificacion/

CDM-PDD-FORM
Beside the Mejillones LNG expansion project, another option to increase the availability of LNG in
the SING, as informed in Systep Ingenieria report33, would be through Gas Atacama project. Their
intention is to develop a Floating Storage and Regasification Unit (FRSU), already awarded to Golar
LNG. However, to start its construction the company requires the signature of supply contracts with
major consumers for over 500 MW. This has not happened yet but it surely will if the demand
requests it.
From the same report, when the electricity demand is analyzed more than 90% of the SING is
represented by large customers, both miners and service providers related to mining. The average
annual rate of growth in the electricity demand for the period 1998-2011 was 6.2%, and it is expected
to be maintained in the future according to the National Energy Commission (CNE), as reported in
April 2012 for the period 2012- 2022 in the Node Price Fixing for the SING.
To cover this demand, by August 2012, the highlights of the conventional generation projects
portfolio were: Mejillones No. 4 and No. 5 (750 MW coal units), Cochrane AES Gener (532 MW coal
unit), Pacific Rio Seco SA (350 MW, coal unit), BHP Billiton Kelar (500 MW, coal, evaluating to
convert into LNG) and Central Patache SA (110 MW, coal unit).
Therefore, the mere existence of these projects allows concluding that a great part of the future
electricity demand would be covered by other type of fuel source than LNG.
Hence, its availability for Kelar project would be secured.
This is even clearer when the two previously mentioned LNG projects are considered (Mejillones
LNG expansion and Gas Atacama LNG floating terminal), increasing the availability of LNG in the
region and not limiting future natural gas based power capacity additions in the region.
In addition to the above-mentioned applicability criteria, ACM0025 Version 02.0 establishes in

paragraph 4 and 5 the following requirements:
- In the case that the project plant supplies electricity to an existing electricity consuming
facility(ies), the sources of electricity as well as average historical energy consumption should be
presented in the CDM-PDD.
- In the case the project plant supplies electricity to an electricity consuming facility(ies) electricity
should be supplied through a dedicated transmission line(s) which is not used for other purposes.
Both requirements are not applicable to the present project activity given that it supplies electricity
to the SING power grid.
B.3. Project boundary
Source GHGs Included Justification/Explanation
CO2 Yes Main emission source

Baseline
Power
CH4 No Excluded for simplification. This is conservative
generation
N2O No Excluded for simplification. This is conservative
Project activity
Fuel CO2 Yes Main emission source

combustion
in the CH4 No Excluded for simplification.
project
plant N2O No Excluded for simplification.
33 SIC-SING Electrical Sector report, August 2012, Systep Ingeniería y Diseños

CDM-PDD-FORM
The flow diagram provided below illustrates the equipment, systems and flows of mass and energy
including the emissions sources and GHGs included in the project boundary:
Project boundary
Legend:
Ga s flow
CO2 emissions
Stea m flow
Power flow
El ectricity
meter
Project activity new power plant
Ga s meter
CO2 emissions
CO2 emi ssions
Gas Turbine
HRSG 1
Generator 1
LNG Steam
Turbine SING
Pipeline
Gas Turbine Generator
HRSG 2
Generator 2
B.4. Establishment and description of baseline scenario

In line with the requirements of ACM0025 Version 02.0, the identification of the plausible baseline
scenarios is conducted by applying Step 1 of the “Tool for the demonstration and assessment of
additionality”, Version 07.0.0 as follows.
Step 1: Identification of alternatives to the project activity consistent with current laws and
regulations
Sub-step 1a: Define alternatives to the project activity
Taken into consideration paragraph 19 of ACM0025, Version 2.0, the following alternatives are
analyzed to determine if they are realistic and credible alternatives available to the project
participants or similar project developers that provide outputs or services comparable with the
proposed CDM project activity.
P1: The construction of one or several other power plant(s) using natural gas, but technologies other
than the project activity;
P2: The construction of one or several other power plant(s) using fossil fuels other than natural gas;
P3: The construction of one or several other power plant(s) using renewable power generation
technologies; and
P4: The proposed project activity undertaken without being registered as a CDM project activity;
To conduct this analysis, is important to take into consideration that, as above mentioned:
i) The proposed project activity has been conceived by BHP Chile Inc. with the aims of guaranteeing
firm electricity supply to cover the future demand of its mines “Escondida” and “Cerro Colorado”;
ii) It was originally planned as a sub-critical coal fired power plant; and
iii) It is connected to the SING given that the mining sector is located in the north of the country and
thus, connected to this system.

CDM-PDD-FORM
Chilean electricity matrix consists of four independent grids: SIC, SING, Magallanes and Aysén. The
SIC (Central Interconnected System) and SING are the main ones representing 74% and 25% of
the installed capacity and 73% and 26% of the electricity generated in the country in 2015,
respectively34.
Both systems - particularly the SING which has a very limited hydropower potential - have been
historically highly reliant on fossil fuels thermal power generation, mainly from coal that has
significantly increased its participation in the past 10 years as showed below.
34 National Commission of Energy (CNE); Statistics/Energy/Electricity/Production and Consumption/Gross

generation SIC and SING; Gross generation Magallanes; and Gross generation Aysén;
http://www.cne.cl/estadisticas/energia/electricidad. Accessed on: 18/09/2016.

CDM-PDD-FORM
Natural gas and LNG have been introduced in Chilean electricity matrix in recent years. Between
1996 and 1999 Chile made substantial investments in gas pipelines from Argentina, mainly to supply
the electricity sector. By 2003 Chile was almost completely reliant on Argentina natural gas imports
(more than 90%). Thus, the country was deeply impacted in 2004 by Argentina’s natural gas
shortage and later cut of supply that jeopardized the electricity generation sector.35 36
The natural gas crisis led to a radical change in the electricity matrix which returned to be based on
coal thermal power plants complemented with diesel oil as a substitute for Argentine natural gas.
Since 2010, when Mejillones LNG terminal started to operate, the LNG has replaced a significant
portion of diesel oil and the installation of new coal power plants is putting back this source as the
main electricity generation source of the country. 37
In consequence, the SIC and the SING remain highly dependent on coal based power plants which
is the main energy source for electricity generation in the country representing 40% of the total
electricity generated by both systems and almost 76% of the electricity generated in the SING, in
2015.
Furthermore, according to future projection of the electrical grid contained in the Energy Agenda
2014 of the Ministry of Energy, new coal based thermal power plants (under construction and
projected) will be introduced and as a result, coal based electricity generation will continue to be the
main energy source with the 39% of the total electricity generated by the SIC and the SING by 2024
and the construction of 1.309 MW of new coal power plants of which 624 MW where under
construction in 2014 when the report was issued. Meanwhile, diesel oil participation will be reduced
up to 1% as a result of no capacity addition of power plants based on this source and the LNG
displacement of this fuel. Finally, LNG participation is expected to increase up to 15% with the
addition of 517 MW in the SING - which corresponds to Kelar project installed capacity - and 325
MW in the SIC of which only 50 MW were under construction by 2014 when the Energy Agenda was
issued.38
The SING concentrates the 58% of the electricity demand of the country´s mining industries and the
mining sector represents 79% of the net electricity commercialized in this system39. Due to the high
dependence of this sector on firm electricity, power generation by third parties entrusted by mining
companies has become a strategic input crucial for the sector development.
Due to the above and taking into consideration that the project developer planned to construct a coal
based power plant in 2005, the construction of one or several other power plant(s) using coal is a
realistic and credible alternative to the project activity.
35 Energy Supply Security: Emergency response of IEA countries 2014; Page 517; IEA. Available at:
https://www.iea.org/publications/freepublications/publication/ENERGYSUPPLYSECURITY2014.pdf
36 Resolution 265/2004 (Prevention measures to avoid natural gas internal supply crisis); Secretariat of Energy;
Argentina. http://mepriv.mecon.gov.ar/Normas/265-04.htm Accessed on: 12/03/2017
37 Power Plants and Projects survey, Chile, 2014-2015; “Electricidad – La revista energética de Chile”; Page
14. Available at: http://www.mch.cl/wp-content/uploads/sites/4/2014/09/CCPE-muestra.pdf; Accessed on:
21/07/2016
38 Energy Agenda - A challenge for the country, progress for everyone; Ministry of Energy; Government of
Chile; May 2014; Annex 5; Pages 116-120; Available at:
http://www.energia.gob.cl/sites/default/files/energyagendaweb.pdf Accessed on: 23/09/2016
39 Updated report of cooper mining energy consumption up to 2015; Chilean Commission of Cooper; Ministry
o Mining. Available at:
https://www.cochilco.cl/Mercado%20de%20Metales/Informe%20de%20Consumo%20de%20Energ%C3%
ADa%202015%20RBA%20versi%C3%B3n%20final.pdf#search=demanda%20de%20energia%20electric
a%20y%20seguridad%20de%20suministro Accessed on: 12/10/2016
CDM-PDD-FORM
Meanwhile, the construction of one or several other power plants using refined oil products (mainly,
diesel oil) is not a reasonable alternative for a power plant project developer in Chile. The reason is
that, as above illustrated, the introduction of diesel oil and fuel oil was only the result of the
Argentinean natural gas shortage. The participation of this fuels has decreased in the recent years
due to the introduction of LNG and is expected to continue decreasing up to 1% of the electricity
generation of the SIC and SING by 2024 with no introduction of new power capacity from this source
as stated in the Energy Agenda 2014 of the Ministry of Energy.
Regarding the construction of one or several other power plant(s) using natural gas, but technologies
other than the project activity, despite the construction of a natural gas open cycle power plant is a
technically feasible alternative, it is not a realistic and credible baseline scenario considering that, as
illustrated in the common practice analysis performed bellow, natural gas open cycle power plants
similar to the project activity have not been constructed recently. Furthermore, as above mentioned,
the CNE projections up to 2024 do not consider the introduction of new natural gas power plants in
the SING other than Kelar.
Finally, regarding renewable power generation technologies, firstly, there is not hydropower potential
in the SING system. Secondly, in recent years wind and solar power plants have been introduced in
the SING system (as well as the SIC). Those projects have been driven by the NCRE Law (Law
20.257) as well as the CDM benefits. This Law was modified in 2013 by Law N°20.698 (Law 20/25)i,
which establishes a 20% NCRE commitment by 2025, as an alternative to the prevailing fossil fuel
based expansion of the Chilean power sector. Nevertheless, as showed in the above graphics, the
participation of these energy sources is still incipient. Furthermore, it is important to consider that not
only most of these projects have been developed as CDM projects but due to the intermittent nature
of these renewable sources, they require firm and flexible thermal power plants, like Kelar project,
to complement their power production.
Due to the above stated, and considering that the project participant as a mining company relies on
firm power generation, the construction of one or several other power plant(s) using renewable power
generation technologies (alternative P3) is not a realistic and credible alternative available to the
project participants or similar project developers, give that, hydropower is not technically feasible in
the SING system and NCREs do not provide services (firm electricity) comparable with the proposed
CDM project activity.
Outcome of Step 1a:
Based on the above analysis, the realistic and credible alternative scenarios to the project activity
are:
P2: The construction of one coal subcritical power plant; and
P4: The proposed project activity undertaken without being registered as a CDM project activity.
Sub-step 1b: Consistency with mandatory laws and regulations

The above identified alternatives are in compliance with all mandatory applicable legal and regulatory
requirements.
Outcome of Step 1b:

Therefore, the realistic and credible alternative scenarios to the project activity that are in compliance
with mandatory legislation and regulations are:
P2: The construction of one coal subcritical power plant; and
P4: The proposed project activity undertaken without being registered as a CDM project activity.

CDM-PDD-FORM
In line with ACM0025, Version 02.0, paragraph 22, a clear description of each baseline scenario
alternative, including information on the technology, such as the efficiency and technical lifetime, is
presented in section A.3 above.
Identification of the economically most attractive baseline scenario alternative
According to ACM0025, Version 02.0 paragraph 23, the economically most attractive baseline
scenario alternative is identified using an investment comparison analysis, by applying Step 2
(Option II) of the “Tool for the demonstration and assessment of additionality” v07.0.0”.
The investment analysis is carried out in real terms and is based on the unit cost of service, i.e.: the
levelized cost of electricity production in $/kWh.
A summary of the parameters utilized for the analysis is presented below. All values are expressed
in real terms:
General Parameters Units Value Reference

Exchange rate corresponds to the project start
date (11/2013); Central Bank of Chile;
Chilean
Exchange rate 519.25 http://si3.bcentral.cl/Siete/secure/cuadros/arboles
$/USD
.aspx?idCuadro=TCB_520_TIPO_CAMBIO_NO
MINAL
Default values for the expected return on equity;
Discount rate % 8.55% Methodological tool: Investment analysis; Version
08.0
Kelar CCGT
Parameters Unit Value

BOOM, Expected Service Commencement Date:
Comissioning Date - 1/10/2016
Section 1.1., Page 12; 29/11/2013
Operational days 2016 - 92 Calculated
Project Technical
years 30 BOOM, Article 2. Term, Page 28 to 29.
Lifetime
According to the Chilean accounting regulations40
the normal lifetime and accelerated depreciation
period of electricity assets - other than civil works
Not for hydro power plants – are shorter than 30
Fair value -
- applicable years. Thus, and according to paragraph 7 of the
Investment analysis tool Version 08.0, no fair
value is included a the end of the 30 years
lifetime period of the baseline and project power
plants.
Operational days 2046 days 273 Calculated
Kelar S.A. disclosure of CAPEX per component
CAPEX kUSD cross-checked with total CAPEX (in real terms)
506,645
as per the BOOM contract; 29/11/2013
EPC costs
Combined
kUSD Kelar S.A. disclosure of CAPEX per component.
Cycle Power Plant 417,167
Gas pipeline kUSD Kelar S.A. disclosure of CAPEX per component.
7,562
40 Exempt Resolution N°43, 26-12-2002, Service of Internal Taxes,

http://www.sii.cl/documentos/resoluciones/2002/reso43.htm.
CDM-PDD-FORM
Transmission line kUSD Kelar S.A. disclosure of CAPEX per component.

11,271
Construction (non EPC costs)
Administration cost kUSD Kelar S.A. disclosure of CAPEX per component.
9,941
Construction
kUSD Kelar S.A. disclosure of CAPEX per component .
management cost 8,179
External
kUSD Kelar S.A. disclosure of CAPEX per component .
development cost 25,433
Mobilization cost kUSD Kelar S.A. disclosure of CAPEX per component.
15,068
Permits & Licences kUSD 12,023 Kelar S.A. disclosure of CAPEX per component
Lease kUSD/month 160.614 BOOM, Section 6.1 Appendix S; 29/11/2013
30 years average; Node price determination in
the short term, SING, Final Technical Report;
National Commission on Energy (CNE); Oct
Natural gas price USD/MMBTU 10.859 2013; Page 21; Chart 15 (LNG projected price
2013-2023). Available at:
http://www.cne.cl/tarificacion/electrica/precio-
nudo-corto-plazo/. Pdf file " ITP SING OCT 13"
30 years average; Calculated as per the BOOM

OPEX (Non-fuel costs) kUSD/MWh 0.0010 contract; Total Contract Payments for the project,
Case B (short pipeline); 29/11/2013
Coal subcritical power plant
Parameters Unit Value References/Comments

Same as the project activity.
Comissioning Date - 1/10/2016 BOOM, Expected Service Commencement Date:
Section 1.1., Page 12; 29/11/2013
Operational days 2016 - 92 Calculated
EIA Kelar Coal Thermal Power Plant, Project
Project Technical Description, page Cap 1-10.
years 30
Lifetime http://seia.sea.gob.cl/archivos/EIA/2013102201/E
IA_1853582_Descripcion_del_proyecto.pdf
According to the Chilean accounting regulations41
the normal lifetime and accelerated depreciation
period of electricity assets - other than civil works
Not for hydro power plants – are shorter than 30
Fair value -
- applicable years. Thus, and according to paragraph 7 of the
Investment analysis tool Version 08.0, no fair
value is included a the end of the 30 years
lifetime period of the baseline and project power
plants.
Operational days 2046 days 273 Calculated
EIA Kelar Coal Thermal Power Plant, Executive
summary, page 4.
CAPEX kUSD 800,000
http://seia.sea.gob.cl/archivos/EIA/2013102201/E
IA_1853582_Resumen_ejecutivo.pdf
Same as the Project activity.
Lease kUSD/month 160.614
BOOM, Section 6.1 Appendix S; 29/11/2013
Node price determination in the short term, SING,
Coal price USD/t 113.28
Final Technical Report; National Commission on
41 Exempt Resolution N°43, 26-12-2002, Service of Internal Taxes,

http://www.sii.cl/documentos/resoluciones/2002/reso43.htm.
CDM-PDD-FORM
Energy (CNE); Oct 2013; Page 21; Chart 14

(Coal projected price 2013-2023). Available at:
Average Opex variable cost of operational coal
thermal power plants in Chile in October 2013.
Source: Node price determination in the short
term, SING, Final Technical Report; National
OPEX (Non-fuel costs) kUSD/MWh 0.003136
Commission on Energy (CNE); Oct 2013; Page
9; Chart 4 (OPEX variable costs). Available at:

CDM-PDD-FORM
Based on the above parameters, the LCOE:
Project LCOE (USD/kWh)
Kelar CCGT 0.0836
Coal subcritical power plant 0.0630
Therefore, the LCOE of a coal subcritical power plant of similar characteristics to Kelar CCGT project
is 24.6% lower than Kelar CCGT LCOE.
According to the above results, the economically most attractive baseline scenario alternative is the
construction of a new subcritical coal thermal power plant. A sensitivity analysis is conducted in
section B.5 below to determine if this conclusion is robust to reasonable variations in the critical
assumptions and thus, to prove the project additionality.
B.5. Demonstration of additionality
Demonstration of prior consideration of the clean development mechanism
According to paragraphs 8 and 12 of the CDM project cycle procedure, Version 9.0:
• “For project activities with a start date on or after 2 August 2008, the project participants shall
notify the designated national authority (DNA) of the host Party of the project activity, if the DNA
exists, and the secretariat in writing of the commencement of the project activity and their intention
to seek the CDM status within 180 days of the start date of the project activity as defined in the
“Glossary of CDM terms”, by using the “CDM project activity prior consideration form” (CDM-PC-
FORM). Such notification is not necessary if a PDD regarding the project activity has been
published for global stakeholder consultation in accordance with paragraphs 20−22 below.”
• “The project participants of project activities referred to in paragraph 8 above shall inform the
secretariat of the progress of the project activity every two years after the initial notification, using
the “CDM project activity prior consideration form” (CDM-PC-FORM) until the PDD regarding the
project activity has been published for global stakeholder consultation.”
According to the CDM Glossary of terms, the start date is defined as: “In the context of a CDM project
activity or CPA, the earliest date at which either the implementation or construction or real action of
a CDM project activity or CPA begins…”
The start date of Kelar Natural Gas Combined Cycle power plant has been identified as the date
when BHP Chile Inc. and the consortium integrated by Korea Southern Power Co. (Kospo) and
Samsung C&T Corporation signed the BOOM contract: 29/11/2013.
Given that the start date of the proposed CDM project activity is after 02/08/2008 but prior to the date
of publication of the PDD for the global stakeholder consultation, the project developer submitted to
the Chilean DNA and the UNFCCC secretariat the prior consideration of the CDM on 20/05/2014.
Furthermore, considering that two years after the initial notification the PDD had still not been
published for global stakeholder’s consultation, the project developer submitted on 02/05/201642 a
42 Communication to the UNFCCC Secretariat available at:

https://cdm.unfccc.int/Projects/PriorCDM/notifications/index_html; Accessed on: 21/07/2016. Notification
to the Chilean DNA available to the DOE at validation.
CDM-PDD-FORM
notification of the progress of the project activity to the UNFCCC secretariat. This is in line with
paragraph 10 of the CDM Project Cycle Procedure, Version 09.0.
Additionality
According to the applicable methodology ACM0025 v02.0 additionality shall be demonstrated by
applying the “Tool for the demonstration and assessment of additionality” v07.0.0.
Step 0 Demonstration whether the proposed project activity is the first-of-its-kind

Not applicable. The project activity is not the first-of-its-kind.
Step 1 Identification of alternatives to the project activity consistent with mandatory laws and
regulations
Discussed in section B.4 above.

Therefore, additionality is demonstrated as per Step 2 (investment analysis) of the tool, Sub-step 2b.
Option II (investment comparison analysis) by conducting an investment comparison analysis as
follows.
Step 2: Investment analysis
Sub-step 2b. Option II. Investment comparison analysis

In line with ACM0025, the financial indicator for the analysis is the unit cost of service (i.e.: the
levelized cost of electricity production in $/kWh).
Given that, as above demonstrated, the economically most attractive baseline scenario is the
construction of a new subcritical coal power plant, a sensitivity analysis will be conducted to
demonstrate that the conclusion regarding the financial/economic attractiveness is robust to
reasonable variations in the critical assumptions.
The sensitivity analysis is performed by altering the main variables of the NGCC and the coal
subcritical power plant +/- 10% and by calculating the variations necessary to reach NGCC’ LCOE
equal to coal subcritical power plant’ LCOE.
- Analysis of the NGCC main variables:

The critical assumptions are:
• CAPEX decrease
• OPEX decrease
• Natural gas price decrease
• Plant load factor increase
The tables below present the results of the sensitivity analysis.
LCOE
Parameter Variation Notes
(USD/kWh)
CAPEX (kUSD) = 455,980
CAPEX -10% 0.0820
CAPEX/MW (kUSD/MW) = 882

CDM-PDD-FORM
OPEX, 30 years average 3,219

OPEX -10% 0.0834
(kUSD/yr) =
Natural gas price, 30 years' 9.77
Natural gas price -10% 0.0770
average (kUSD/MMBTU) =
Load factor +10% 0.0820 30 years average load factor = 82.79%
LCOE
(USD/kWh)
Irrational solution. Even with zero CAPEX the
CAPEX -131% 0.0630
project LCOE >coal subcritical power plant
Irrational solution. Even with zero OPEX the
OPEX -1,771% 0.0630
project LCOE >coal subcritical power plant
Natural gas price, 30 years'

Natural gas price -31% 0.0630
average (kUSD/MMBTU) = 7.48
Up to No solution.
100% Even with a load factor of 100% every year of the
Load factor 0.0786
every project lifetime, the Project LCOE>coal subcritical
year power plant
The likelihood of the variations for each parameter is discussed below based on the market
projections, articles and/or technical data:
- CAPEX: The project CAPEX has been communicated to the National Commission of Energy
(CNE).
The 980 kUSD/MW NGCC project CAPEX is a realistic value considering its starting date
(November 2013) given that according to the National Commission of Energy (CNE) Final
Technical Report of the Node price determination in the SING, from October 2013 43 the
investment cost of a new NGCC power plant was around 1,000 USD/kW.
A reduction of 131% in the project CAPEX required to reach the coal power plant LCOE led to
an irrational solution given that the NGCC investment should be an income instead of an outcome.
- Opex: the operating cost of Kelar NGCC is established in the BOOM contract.
There is no rational solution to reach the coal thermal power plant LCOE given that the OPEX
should be reduced 1,771%, meaning that it should be a an income instead of an outcome.
- Natural gas price: the natural gas price projection is based on CNE data.
CNE projections are considered accurate and conservative, therefore a reduction of 31% in the
natural gas price is not considered a feasible variation.
- Plant load Factor:
Mathematically, there is not a possible variation of the NGCC plant load factor that could make
NGCC LCOE = coal subcritical power plant LCOE.
43 Available at: http://www.cne.cl/tarificacion/electrica/precio-nudo-corto-plazo/. Accessed on: 26/09/2016

CDM-PDD-FORM
Even with a plant load factor of 100% every year of the 30 years’ project lifetime, the resulting
NGCC’ LCOE is 0.0786 USD/kWh, higher than the coal subcritical power plant LCOE.
- Analysis of the coal subcritical power plant main variables

The critical assumptions are:
• CAPEX increase
• OPEX increase
• Coal price increase
• Plant load factor decrease
The tables below present the results of the sensitivity analysis.
LCOE
(USD/kWh)
CAPEX (kUSD) = 880,000
CAPEX +10% 0.0655
CAPEX/MW (kUSD/MW) = 1,760
OPEX +10% 0.0633 OPEX, 30 years average (kUSD/yr) = 11,754
Coal price +10% 0.0665 Coal price, 30 years' average (USD/t) = 124.60
Load factor -10% 0.0659 30 years average load factor = 81.02%
LCOE
(USD/kWh)
CAPEX (kUSD) = 1,460,720
CAPEX 83% 0.0836
CAPEX/MW (kUSD/MW) = 2,921
OPEX 655% 0.0836 OPEX, 30 years average (kUSD/yr) = 80,645
Coal price 60% 0.0836 Coal price, 30 years' average (kUSD/t)= 180.84
30 years average load factor = 49.84%
Load factor -44.6% 0.0836
Lowest load factor (year 2016) = 32.92%
The likelihood of the variations for each parameter is discussed below based on the market
projections, articles and/or technical data:
- CAPEX: as illustrated in the table above, to reach the LCOE of the NGCC project the CAPEX of
the coal thermal power plant would have to be increased 83% up to 2,921 kUSD/MW.
According to the National Commission of Energy (CNE) Final Technical Report of the Node price
determination in the SING, from October 201344 the investment cost of a new coal thermal power
plant is around 2,500 USD/kW. The report clarifies that this cost includes the investment in ports
to unload and store the coal.
Therefore, an increase of the coal subcritical power plant CAPEX up to 2,921 kUSD/MW is not
considered a plausible variation.
- OPEX: the OPEX value of the coal subcritical power plant corresponds to the average Opex cost
of coal thermal power plants operational in Chile by October 2013, according to data provided in
44 Available at: http://www.cne.cl/tarificacion/electrica/precio-nudo-corto-plazo/. Accessed on: 12/08/2017

CDM-PDD-FORM
National Commission on Energy (CNE) in the Node price determination in the short term, SING,
Final Technical Report from October 2013.45
CNE data is considered accurate. Therefore, an increase of 655% in the coal subcritical power
plant OPEX is not considered a possible variation.
- Coal price: the coal price projection is based on CNE data. CNE projections are considered
accurate and conservative, therefore an increase of 60% is not considered a feasible variation.
- Load Factor: to reach the LCOE of the NGCC the load factor of the subcritical coal power plant
shall decrease 44.6%, resulting in a 30 years’ average load factor of 49.84% and a lowest plant
load factor 32.92% in 2016.
As explained in section A.3 above, the coal thermal power plant load factors (from 59.47% in
2016 up to 92.35% from 2023 onwards and 87.76% corresponding to the 30 years average) have
been compared with the actual PLFs of all operative coal thermal power plants connected to the
SING in 2015, 2016 and 2017 (until 13/06/2017). The average PLF of these power plants is 68%;
the lowest PLF is 53.3% and the highest PLF is 91.3%.46,47,48 Therefore, the PLFs results from
the sensitivity analysis (49.84% (the 30 years’ average load factor) and 32.92% (the lowest plant
load factor in 2016)) are not reasonable PLF values for a coal thermal power plant connected to
the SING.
In conclusion, the results prove that only with highly unrealistic and very favourable circumstances
Kelar CCGT’ LCOE could reach the coal thermal power plant’ LCOE.
Therefore, the proposed project activity is robust to reasonable variations on main parameters.
Outcome of step 2:
After the sensitivity analysis it can be concluded that Kelar natural gas combined cycle project is
unlikely to be the most financially/economically attractive alternative.
Step 3. Barriers analysis

According to ACM00025 Version 02.0 Step 3 of the additionality tool is not applicable under this
methodology.
Step 4. Common practice analysis
Sub-step 4a:
The proposed CDM project activity applies measures that are listed in the definitions’ section of
theTool for the demonstration and assessment of additionality, Version 07.0.0. Therefore, the
common practice analysis is conducted as per the stepwise approach established in the latest
version of the “Methodological tool: Common practice” (version 03.1).
45 Source: Node price determination in the short term, SING, Final Technical Report; National Commission on
Energy (CNE); Oct 2013; Page 9; Chart 4 (OPEX variable costs). Available at:
http://www.cne.cl/tarificacion/electrica/precio-nudo-corto-plazo/. Pdf file " ITP SING OCT 13"
46
Statistics/Electricity/Infraestructure/Generation Installed Capacity
47
48

CDM-PDD-FORM
- Step 1: Calculate applicable capacity or output range as +/-50% of the total design capacity or
output of the proposed project activity.
The Kelar Natural Gas Combined Cycle project total installed capacity is 516.775 MW.
Hence, the applicable capacity range is: 258.388 MW – 775.163 MW.
- Step 2: identify similar projects (both CDM and non-CDM) which fulfil all of the following
conditions:
(a) The projects are located in the applicable geographical area;
(b) The projects apply the same measure as the proposed project activity;
(c) The projects use the same energy source/fuel and feedstock as the proposed project activity,
if a technology switch measure is implemented by the proposed project activity;
(d) The plants in which the projects are implemented produce goods or services with comparable
quality, properties and applications areas (e.g. clinker) as the proposed project plant;
(e) The capacity or output of the projects is within the applicable capacity or output range
calculated in Step 1;
(f) The projects started commercial operation before the project design document (CDM-PDD)
is published for global stakeholder consultation or before the start date of proposed project
activity, whichever is earlier for the proposed project activity.
According to the Tool, the applicable geographical area should be the entire host country. Therefore,
the geographical area of the common practice analysis is Chile.
According to data from the National Commission of Energy (CNE)49 of Chile, the following plants
meet the stated conditions:
Gross
Electricity Operation Installed
N° Power Plant Fuel CDM? Similar?
System start date Capacity
(MW)
TERMOELÉCTRICA
1 SING 11/4/2011 Coal 276.9 No No
ANGAMOS 1 (ANG1)
TERMOELÉCTRICA
2 SING 11/4/2011 Coal 281.3 No No
ANGAMOS 2 (ANG2)
3 SING ATACAMA (CC1) 15/9/1999 Natural gas 395.9 No No
4 SIC Antuco 1/1/1981 Hydro 320.0 No No
5 SIC Bocamina II 28/10/2012 Coal 350.0 No No
6 SIC Campiche 15/3/2013 Coal 272.0 No No
7 SIC Colbún 1/1/1985 Hydro 474.0 No No
8 SIC El Toro 1/1/1973 Hydro 450.0 No No
9 SIC Nehuenco 1/1/1998 Natural gas 368.4 No No
10 SIC Nehuenco II CC 30/4/2004 Natural gas 398.3 No No
49 Generation Installed Capacity; CNE; June 2016. Available at: http://www.cne.cl/estadisticas/electricidad/;

Route of access: CNE website / Statistics/Electricity/Infraestructure/Generation Installed Capacity;
CDM-PDD-FORM
11 SIC Nueva Renca 1/1/1997 Natural gas 379.0 No No

12 SIC Nueva Ventanas 11/2/2010 Coal 272.0 No No
13 SIC Pangue 1/1/1996 Hydro 467.0 No No
14 SIC Pehuenche 1/1/1991 Hydro 570.0 No No
15 SIC Ralco 6/9/2004 Hydro 690.0 No No
16 SIC Rapel 1/1/1968 Hydro 378.0 No No
17 SIC San Isidro 1/1/1998 Natural gas 379.0 No No
Natural gas
18 SIC San Isidro II CC 21/1/2008 399.0 No Yes
(LNG)
19 SIC Santa María 15/8/2012 Coal 370.0 No No
- Step 3: within the projects identified in Step 2, identify those that are neither registered CDM
project activities, project activities submitted for registration, nor project activities undergoing
validation. Note their number Nall.
Based on the information provided in the UNFCCC website, none of the identified projects are
CDM project activities. Therefore,
Nall = 19
- Step 4: within similar projects identified in Step 3, identify those that apply technologies that are
different to the technology applied in the proposed project activity. Note their number Ndiff.
As above mentioned, traditionally thermal power plants in Chile were coal based. It was not until
1997, when a natural gas pipeline from Argentina was constructed to supply natural gas to Chile,
that natural gas based thermal power plants were constructed.
Nevertheless, the Argentinean natural gas shortage in 2004 led to a radical change in the
operation of all those thermal power plants that were forced to replace the Argentinean natural
gas with diesel oil to be able to operate.50,51
It was not until 2009 and 2010 that the LNG regasification terminals GNL Quintero (in the SIC)
and GNL Magallanes (in the SING) started to operate, allowing the displacement of the diesel oil
consumption in the originally natural gas based power plants and the construction of new natural
gas based power plants.52
Due to the above evidences, all natural gas based thermal power plants that started to operate
until 2004 in Chile are deemed different technologies compared to Kelar natural gas combined
cycle. The investment climate on November 2013 - when the investment decision on the present
project activity was taken - was different than before 2004 due to the inaccessibility to natural gas
from Argentina (access to technology).
The only power plant that can be categorized as similar to Kelar is San Isidro II combined cycle
which was stopped in 2004 due to the Argentinean natural gas supply shortage and re-started
50 SOFOFA Communications and Declarations; Colbún repairs Nehuenco I before expected. Available at:
http://www.sofofa.cl/mantenedor/detalle.asp?p=60&s=0&n=25834 Accessed on: 14/07/2016
51 Fuel Consumption SIC and SING 2008-2015; CNE; Available at: http://www.cne.cl/estadisticas/electricidad/

52 Power Plants and Projects survey, Chile, 2014-2015; Page 14. Available at: http://www.mch.cl/wp-
content/uploads/sites/4/2014/09/CCPE-muestra.pdf; Accessed on: 13/07/2013

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only after there was confidence in the availability of LNG in Chile.53 Nevertheless, as can be
noticed in the CNE statistics on fuel consumption in the SIC (2008-2015) San Isidro II operated
all along 2008 until august 2009 with diesel oil.
Due to the above reasons:
Ndiff = 18
Step 5: calculate factor F = 1 – Ndiff / Nall representing the share of similar projects (penetration
rate of the measure/technology) using a measure/technology similar to the measure/technology
used in the proposed project activity that deliver the same output or capacity as the proposed
project activity.
The proposed project activity is a “common practice” within a sector in the applicable geographical
area if the factor F is greater than 0.2 and Nall – Ndiff is greater than 3.
F = 1 – 18 / 19 = 0.01
Nall – Ndiff = 1
As the factor F is not greater than 0.2 and Nall – Ndiff is not greater than 3, the proposed project
activity is not a common practice.
- Outcome of step 4:
Kelar natural gas combined cycle project is additional.
B.6. Emission reductions
B.6.1. Explanation of methodological choices
The procedures to determine the emission reductions attributable to the Project activity are described
below, according to the selected approved methodology ACM0025 version 02.0.
Project emissions
Project emissions result from the combustion of natural gas and small amount of other start-up or
auxiliary fuels for the generation of electricity in the project power plant.
To calculate the project emissions (PEy), the “Tool to calculate project or leakage CO2 emissions
from fossil fuel combustion”, Version 03 is applied.
As per ACM0025 Version 02.0, the parameter PEy corresponds to PEFC,j,y in the tool, where j is the
combustion of natural gas and small amounts of other start-up or auxiliary fuels in the project activity
power plant, as follows:
PE y = PE FC, j,y =  FCi, y * COEFi,y

i
53 Available at:
http://www.mercuriovalpo.cl/prontus4_noticias/site/artic/20050602/pags/20050602024451.html Accessed
on: 14/07/2016
CDM-PDD-FORM
Where:
PEy = Are the CO2 emissions from fossil fuel combustion in the project power plant
during year y (tCO2/yr);
FCi,y: = Is the quantity of fuel type i combusted in the project power plant in the year y
(mass or volume unit/yr)
COEFf,y : = Is the CO2 emission coefficient of fuel type y in year y (tCO2/mass or volume unit)
The CO2 emission coefficient COEFi,y can be calculated using one of the two options provided in the
“Tool to calculate project or leakage CO2 emissions from fossil fuel combustion”, Version 03,
depending on the availability of data on the fossil fuel type i.
Option B has been selected. Thus, the CO2 emission coefficient COEFi,y is calculated based on net
calorific value and CO2 emission factor of the fuel type i, as follows:
COEFi,y = NCVi,y * EFCO2,i,y
Where:
NCVi,y : = Is the weighted average net calorific value of the fuel type i in year y (GJ/mass or
volume unit)
EFCO2,f,y : = Is the weighted average CO2 emission factor of fuel type i in year y (tCO2/GJ)
i = Are the fuel types combusted in the project power plant during the year y
Baseline emissions
According to ACM00025 Version 02.0, baseline emissions (BEy) are calculated as a sum of two
components: emissions from electricity generated and supplied by the project power plant to the grid
and to the electricity consuming facility(ies). Each component is determined by multiplying the
amount of electricity (EGPJ,grid,y, EGPJ,facility,i,y) with a respective baseline emission factor (EFBL,grid,CO2,y,
EFBL,facility,CO2,i,y).
Given that the project power plant only supplied electricity to the grid, baseline emissions are
calculated by multiplying the electricity generated and supplied by the project power plant to the grid
(EGPJ,grid,y) with a baseline CO2 emission factor (EFBL,grid,CO2,y), as follows:
BE y = EG PJ , grid , y ⋅ EF BL , grid ,CO 2 , y
Where: = Baseline emissions in year y (t CO2)
, , = Quantity of electricity generated in the project power plant and supplied

to the grid in year y (MWh)
, ,CO2, = Baseline CO2 emission factor for electricity supplied to the grid in the
year y (t CO2/MWh)
Furthermore, ACM00025 Version 02.0 establishes that for construction of large new power capacity
additions under the CDM, there is a considerable uncertainty relating to which type of other power
generation is substituted by the power generation of the project plant. As a result of the project, the
application of an alternative power generation technology(ies) could avoided, or the construction of
a series of other power plants could simply be delayed. Furthermore, if the project were installed
sooner than these other projects might have been constructed, its near-term impact could be largely
to reduce electricity generation in existing plants. This depends on many factors and assumptions
(e.g. whether there is a supply deficit) that are difficult to determine and that change over time. Thus,

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in order to address this uncertainty in a conservative manner, project participants shall use the
following emission factors to determine the parameter EFBL,grid,CO2,y as the minimum among the three
options:
EF1 The build margin, calculated according to “Tool to calculate emission factor for an
electricity system” Version 06.0 (EFBL,grid,CO2,y = EFgrid,BM,y); and
EF2 The combined margin, calculated according to “Tool to calculate emission factor for
an electricity system”, Version 06.0, using a wOM = 0.5 and wBM = 0.5 weight
(EFBL,grid,CO2,y = EFgrid,CM,y) for the crediting period;
EF3 The emission factor of the technology and fuel (EFBL,Tech,CO2) identified as the most
attractive baseline scenario among alternatives P1 to P4 (refer to section B.4 above)
and calculated as follows:
EF BL
EF BL ,Tech ,CO 2 = * 3 .6
η BL
Where:
, ,CO2 = Emission factor of the baseline technology and fuel (t CO2/MWh)

= CO2 emission factor of the baseline fuel (t CO2/GJ)
ƞ = The efficiency of the baseline technology (ratio)
3.6 = Conversion factor from GJ to MWh (GJ/MWh)
According to ACM0025, Version 02.0, EF3 is determined based on an ex ante assessment.

Meanwhile, EF1 or EF2 are determined ex post as per the “Tool to calculate the emission factor for
an electricity system”, Version 06.0.
Leakage
Leakage may result from fuel extraction, processing, liquefaction, transportation, re-gasification and
distribution of fossil fuels outside of the project boundary.
For the purpose of estimating leakage, the quantity of natural gas consumed by the project power
plant in year y is multiplied with an emission factor for upstream emissions (EFNG,upstream) from natural
gas consumption and subtract the emissions occurring from fossil fuels used in the baseline (i.e. due
to electricity supplied to the grid and/or to the electricity consuming facility(ies)), as follows:
= , ×! " , × ,#$%& '( − , , × ,#%, ,
−* ,+' , & , , × ,#%,+' , & , , -
Where:
= Leakage emissions in year y (t CO2e)
, = Quantity of natural gas combusted in the project plant in year y (m³)

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! "
Average net calorific value of the natural gas combusted during the
, =
year y (GJ/m³)
,#$%& '( = Emission factor for upstream emissions of natural gas (t CO2/GJ)
Quantity of electricity generated in the project power plant and supplied
, , =
to the grid in year y (MWh)
Emission factor for upstream emissions occurring in the baseline due to
,#%, , =
electricity supplied to the grid (t CO2/MWh)
Quantity of electricity generated in the project power plant and supplied
,+' , & , , =
to the electricity consuming facility(ies) i in year y (MWh)
Emission factor for upstream emissions occurring in the baseline due to
,#%,+' , & , , =
electricity supplied to the consuming facility (t CO2/MWh)
The emission factor for upstream emissions from natural gas (EFNG,upstream) is determined using the
latest version of the tool “Upstream leakage emissions associated with fossil fuel use” Version 02.0.
The project participant decided to include emissions occurring from fossil fuels used in the baseline
for leakage determination. Therefore, the following guidance provided in ACM00025 Version 02.0 is
used.
The emission factor for upstream emissions occurring in the baseline (EFBL,us,grid,y or EFBL,us,facility,i,y) is
calculated consistent with the baseline emission factor (i.e. EF1, EF2, EF3) selected above, as
follows:
 FF j, k, y × NCVj, k, y × EFk,upstream,CH4
EF1 EFBL,us, grid,y , orEFBL,us, facility,y = j k
× GWPCH 4
 EG
j
j, y


  FF j, k, y × NCV j, k, y × EF k, upstream, CH4   FF i, k, y × NCV i, k, y × EF k, upstream, CH4 

EF2 EF BL, us, grid, y =  0.5 × + 0.5 ×  × GWP CH 4
j k i k
  EG j, y i EG i, y 
 j 
EFk,upstream,CH4
EF3 EFBL,us, grid,y , orEFBL,us, facility,y = × 3.6 × GWPCH 4
ηBL
Where:
,#%, , = Emission factor for upstream emissions occurring in the baseline due
to electricity supplied to the grid (t CO2/MWh)
,#%,+' , & , = Emission factor for upstream emissions occurring in the baseline due
to electricity supplied to the consuming facility (t CO2/MWh)
. = Plants included in the build margin
/,0, = Quantity of fuel type k (a coal or oil type) combusted in power plant j
included in the build margin in year y (mass or volume units)
! "/,0, = Average net calorific value of fuel type k (a coal or oil type)
combusted in power plant j included in the build margin in year y
(GJ/mass or volume units)
0,#$%& '(,123 = Emission factor for upstream fugitive methane emissions from
production of the fuel type k (a coal or oil type) (tCH4/GJ)
/, = Electricity generation in the plant j included in the build margin in
year y (MWh)

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4 = Plants included in the operating margin

,0, = Quantity of fuel type k (a coal or oil type) combusted in power plant i
included in the operating margin in year y (mass or volume units)
! " ,0, = Average net calorific value of fuel type k (a coal or oil type)
combusted in power plant i included in the operating margin in year y
(GJ/mass or volume units)
, = Electricity generation in the plant i included in the operating margin in
year y (MWh)
5 = The energy efficiency of the baseline technology (ratio)
67123 = Global warming potential of methane (t CO2e/t CH4)
The determination of EFBL,us,grid,y and EFBL,us,facility,i,y is based on the source of baseline emission factor
(e.g. for EF1 - technology and fuel used by power plants included in the build margin) and is made
once at the validation stage based on an ex ante assessment and determined using the tool
“Upstream leakage emissions associated with fossil fuel use”, Version 03.0.
If the baseline emission factors EFBL,grid,CO2,y is determined as EF1 or EF2 the calculation will be
consistent with the calculation of CO2 emissions in the build margin and the combined margin, i.e.
the same cohort of plants and data on fuel combustion and electricity generation should be used,
and the values for FF and EG should be those already determined through the application of “Tool
to calculate the emission factor for an electricity system”.
Where total net leakage effects are negative (LEy<0), it will be assumed LEy=0.
Emission Reductions
Emission reductions are calculated according to the following equation:
ERy = BEy – PEy – LEy
Where:
ERy = Emissions reductions in year y (t CO2e)
BEy = Emissions in the baseline scenario in year y (t CO2e)
PEy = Emissions in the project scenario in year y (t CO2e)
LEy = Leakage in year y (t CO2e)
B.6.2. Data and parameters fixed ex ante
Data / Parameter EFBL

Unit t CO2/GJ
Description CO2 emission factor of the baseline fuel (other bituminous coal)
Source of data IPCC default values at the lower limit of the uncertainty at a 95 per cent
confidence interval as provided in table 1.4 of Chapter1 of Vol. 2
(Energy) of the 2006 IPCC Guidelines on National GHG Inventories
Value(s) applied 0.0895

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Choice of data or According to "Thermal generation: coal, key in the energetic matrix"54
Measurement more than 90% of the coal consumed in Chile is imported and is of the
methods and type bituminous coal.
procedures
Purpose of data Calculation of baseline emissions.
Additional comment -
Data / Parameter ηBL

Unit Ratio
Description The efficiency of the baseline technology (subcritical coal power plant
connected to the SING grid)
Source of data Methodological tool: Determining the baseline efficiency of thermal or
electric energy generation systems; Version 02.0; Option F: Default
value; Table 2. Default efficiency for grid connected power plants;
Subcritical coal power plant commissioned after 2012.
Value(s) applied 39%
Choice of data or Conservatively estimated according to the
Measurement Methodological tool: Determining the baseline efficiency of thermal or
methods and electric energy generation systems; Version 02.0; Option F: Default
procedures value
Data / Parameter EFNG,upstream

Unit tCO2/GJ
Description Emission factor for upstream emissions of liquified natural gas
Source of data Tool: Upstream leakage emissions associated with fossil fuel use;
version 03.0; Table 3. Default emission factors for upstream emissions
for different types of fossil fuels; Value for Liquified Natural Gas
Choice of data or As established by ACM00025, v02.0
Measurement
methods and
procedures
Purpose of data Calculation of leakage.
Data / Parameter EFcoal,upstream,CO2e

Unit tCO2e/GJ
Description Emission factor for upstream emissions of coal
54 Revista EI; 06/05/2014; http://www.revistaei.cl/reportajes/generacion-termoelectrica-carbon-clave-en-la-

matriz-energetica/,

CDM-PDD-FORM
Source of data Table 3. Default emission factors for upstream emissions for different
types of fossil fuels; Tool: Upstream leakage emissions associated with
fossil fuel use; version 03.0.; Coal/lignite (unknown mine location(s) or
coal/lignite not 100 per cent sourced from within host country); Surface
mine, or any other situation55
Choice of data or As established by ACM00025, v02.0
Measurement
methods and
procedures
Purpose of data Calculation of leakage.
B.6.3. Ex ante calculation of emission reductions
Baseline emissions
Baseline emissions are calculated as follows:
BE y = EGPJ , grid , y ⋅ EFBL, grid ,CO 2, y
EFBL,grid,CO2,y the lowest emission factor among the following three options:
- Option 1 (EF1): The build margin (EFgrid,BM,y)
As above stated, according to ACM00025 Version 02.0 EF1 shall be calculated ex post as described
in the “Tool to calculate the emission factor for an electricity system”.
Option B of step 5 of the “Tool to calculate the emission factor for an electricity system”, Version 06.0
establishes: “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.”
Thus, the calculation of the Build Margin emission factor for the SING has been carried out based
on the latest entire year for which information is available: 2016 data.56
According to the tool, no capacity additions from retrofits have been included in the calculation of the
Build Margin emission factor.
55 Selection based on "Thermal generation: coal, key in the energetic matrix", Revista EI; 06/05/2014;
http://www.revistaei.cl/reportajes/generacion-termoelectrica-carbon-clave-en-la-matriz-energetica/
56 Up today (21/03/2018) there is information available on new power units and their fuel consumption until
August-September 2017. SING power plants: http://cdec2.cdec-
sing.cl/pls/portal/cdec.pck_web_cdec_sing.sp_pagina?p_id=5187; SING fuels consumption:
https://www.cne.cl/estadisticas/electricidad/
CDM-PDD-FORM
The sample group of power units m used to calculate the Build Margin has been determined as per
the procedure established in the mentioned tool. The result has been that in 2016 the SET≥20% had
a larger production than SET5 units, so SET≥20% has been considered the sample set (SET sample).
The BM emission factor has been calculated as follows:
Where:
EF grid,BM,y Build Margin CO2 emission factor in year y (tCO2/MWh)
EG m,y Net quantity of electricity generated and delivered to the grid by power unit m in year
y (MWh)
EF EL,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.
Due to the kind of set of plants/units used for the calculation of the Build Margin emission factor of
the SING and in accordance to the Tool, only option A2 from guidance in Step 4 (a) could be used
in this calculation:
Where:
EF EL, m, y = CO2 emission factor of power unit m in year y (tCO2/MWh)
EF CO2, m, i, y = Average CO2 emission factor of fuel type i used in power unit m in year y
(tCO2/GJ)
η m, y = Average net energy conversion efficiency of power unit m in year y (%).
y = The most recent historical year for which power generation data is available.
η m,y values have been conservatively estimated ex ante in accordance to the “Tool to calculate the
emission factor for an electricity system”, Version 06.0, utilizing the default values provided in Table
2, Appendix of Tool09: ”Determining the baseline efficiency of thermal or electric energy generation
systems"; Version 02.0.
Based on 2016 data, the resulting build margin emission factor is:
EFgrid,BM,2016 (tCO2/MWh) 0.535
- Option 2 (EF2): The combined margin (EFgrid,CM,y)
Calculated according to steps established in the “Tool to calculate emission factor for an electricity
system”, Version 06.0, using a wOM = 0.5 and wBM = 0.5 weight for the crediting period.
- Step 1: Identify the relevant electricity systems
The SING is the relevant electricity system.

CDM-PDD-FORM
- Step 2: Choose whether to include off-grid power plants in the project electricity system
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.
Off-grid power generation is not significant in the SING given that it is a reliable and stable electricity
grid. Hence, only grid power plants are included in the calculation (option I).
- Step 3: Select a method to determine the operating margin (OM)
The “Tool to calculate the emission factor for an electricity system” (version 06.0) provides four
methods to calculate the Operating Margin.
The selected method to calculate the OM of the SING has been the Simple OM given that low-
cost/must-run (hydro, solar, biomass and wind) resources accounted for less than 50% of total grid
generation over the five most recent years with information available (2012-2016) as below
demonstrated:
Gross electricity generation per type of fuel in the SING (MWh) 57

2012 2013 2014 2015 2016
Coal 13.900 14.101 14.076 14.176 15.278
Oil products (diesel, fuel Oil, 236 381 234 94 161
petcoke)
Natural gas 2.513 2.551 2.860 3.707 2.716
Cogeneration 25 121 122 134 131
Hydro 82 81 96 102 80
Wind 0 0 215 232 247
Solar 0 2 72 360 850
Total 16.756 17.237 17.674 18.805 19.463
Low cost-must run / Total 0,49% 0,48% 2,17% 3,69% 6,05%
5 years average 2,58%
Regarding fossil fuel power plants dispatch in the SING, it is important to consider that all power
plants connected to this system operate according to the Economic Dispatch Center (CDEC-SING)
orders which determine daily the generation program of the grid based on the marginal costs of the
power plants.58, 59. Therefore, the dispatch ability of the power plants is related to their marginal cost,
which in the case of fossil fuel power plants is mainly related to the fossil fuel (coal, fuel-oil, natural
57National Commission of Energy (CNE); Statistics/Energy/Electricity/Production and Consumption/Gross

generation SIC - SING; http://www.cne.cl/estadisticas/energia/electricidad. Accessed on: 21/03/2018
58 CDEC-SING web page: http://cdec2.cdec-
sing.cl/pls/portal/cdec.pck_web_cdec_pages.pagina?p_id=2023. Accessed on: 21/03/2018.
59 Procedure short-term operational program; CDEC-SING; v1.0. Available at: http://cdec2.cdec-
sing.cl/pls/portal/cdec.pck_proc_dodp_pub.proced_hist_dodp_item?p_id=22&p_clasif_direcc=2&p_tipo_pr
oc=DO&p_de_donde=W. Accessed on: 21/03/2018.

CDM-PDD-FORM
gas) costs that rely exclusively on market prices60. Hence, the primary fuel cost highly impacts the
power generation costs and determines if a power plant is dispatched or not. As a result, fossil fuel
power plants connected to the SING cannot be deemed must-run. To reinforce the above mentioned,
the CDEC-SING has confirmed that in the SING none of the power plants (coal, fuel oil and natural
gas) are considered low-cost/must-run.61
In conclusion, the operating margin emission factor (EFgrid,OM,y) for the SING is calculated ex ante
according to the Simple OM method.
- Step 4: Calculate the operating margin emission factor according to the selected method
The Simple OM Emission Factor (EFOM,simple,y) is calculated as the generation-weighted average

emissions per electricity unit (tCO2/MWh) of all generating sources serving the system, not including
low-cost/must-run power plants/units.
It is calculated according to “Option B” (calculation based on total fuel consumption and electricity
generation of the system) of Step 4 of the tool, given that:
− The necessary data for Option A is not available. However, 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 are available; and
− Only 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
− Off-grid power plants have not been included in the calculation (see Option I chosen in Step 2).
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:
Where:
EF grid,OMsimple,y = Simple Operating Margin CO2 emission factor in year y (tCO2/MWh);
FC i,y = Amount of fossil fuel type i consumed in the project electricity system in year
y (mass or volume unit);
NCV i,y = Net calorific value (energy content) of fossil fuel type i in year y (GJ/mass or
volume unit);
EF CO2,i,y = CO2 emission factor of fossil fuel type i in year y (tCO2/GJ);
EG y = 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 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.
60 Procedure cost of fuels of power plants; CDEC-SING; v04. Available at: http://cdec2.cdec-
sing.cl/pls/portal/cdec.pck_proc_dodp_pub.proced_hist_dodp_item?p_id=29&p_clasif_direcc=2&p_tipo_pr
oc=DO&p_de_donde=W. Accessed on: 18/08/2016.
61 CDEC-SING communication; 07/02/2013. Provided to the DOE.

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The sources of data used to determine the Simple Operating Margin of the SING are:
FCi,y CDEC-SING data available on its webpage62

EGy CDEC-SING data available on its webpage63
NCVi,y Ministry of Energy data available on its webpage64
EFCO2,i,y IPCC default values at the lower limit of the uncertainty at a 95% confidence interval65
Based on 2016 data, the resulting operating margin emission factor is:
EFgrid,OM simple, 2016 (tCO2/MWh) 0.989
- Step 5: Calculate the build margin emission factor
It has been calculated ex ante as above illustrated.
- Step 6: Calculate the combined margin emission factor
The combined margin emissions factor is calculated as a weighted average as follows:
EF grid , CM , y = EF grid , OM , y × w OM + EF grid , BM , y × w BM
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 (%)
Based on 2016 data and wOM and wBM, equal to 0.5 each one for the first crediting period (according
to ACM00025 v02.0), the resulting build margin emission factor is:
EFgrid,CM, 2016 (tCO2/MWh) 0.762
- Option 3 (EF3): The emission factor of the technology and fuel (EFBL,Tech,CO2) identified as
the most attractive baseline scenario among alternatives P1 to P4 (refer to section B.4 above)
and calculated as follows:
62 SING Fuels consumption (2008-2016); CNE website / Statistics / Electricity / Production and Consumption
/ SING Fuels Consumption; http://www.cne.cl/estadisticas/electricidad/ Accessed on: 08/08/2016
63 Electricity Generation Annual Detail (GWh); CDEC-SING web page: Home page/ Operational data / Real
Operation / Energy Generation / Energy Generation Annual Detail 2004-2016; http://cdec2.cdec-

sing.cl/pls/portal/cdec.pck_oper_real_pub.rpt_gen_centrales_sing_x_annos Accessed on: 08/08/2016
64 National Energy Balance 2012; Ministry of Energy web page;
http://antiguo.minenergia.cl/minwww/opencms/14_portal_informacion/06_Estadisticas/Balances_Energ.ht
ml; Accessed on: 08/08/2016
65
. 2006 IPCC Guidelines on National GHG Inventories, Vol. 2 (Energy), Chapter 1, Table 1.4, Pages 1.23
and 1.24; http://www.ipcc-nggip.iges.or.jp/public/2006gl/pdf/2_Volume2/V2_1_Ch1_Introduction.pdf;
CDM-PDD-FORM
EF BL
EF BL ,Tech ,CO 2 = * 3 .6
η BL
Where:
, ,CO2 = Emission factor of the baseline technology and fuel (t CO2/MWh)

= CO2 emission factor of the baseline fuel (t CO2/GJ)
ƞ = The efficiency of the baseline technology (ratio)
3.6 = Conversion factor from GJ to MWh (GJ/MWh)
Baseline CO2 emission factor (EFBLCO2,y)
Project developer estimations according

EF1: Build margin EFgrid,BM,2016 0.535 tCO2/MWh to the Tool to calculated the EF of an
electricity system, Version 06.0

Operating margin EFgrid,OM simple, 2016 0.989 tCO2/MWh to the Tool to calculated the EF of an
OM weight wOM 0.5 - ACM00025; Version 02.0
BM weight wBM 0.5 - ACM00025; Version 02.0
EF2: Combined Margin EFgrid,CM,y 0.762 tCO2/MWh to the Tool to calculated the EF of an
IPCC default value at the lower limit of

CO2 emission factor of the uncertainty at a 95% confidence interval;
baseline fuel (Other Bituminous EFBL 0.0895 tCO2e/GJ 2006 IPCC Guidelines on National GHG
Coal)66 Inventories; Volume 2 (Energy); Chapter
1; Table 1.4.
Methodological tool: Determining the
Efficiency of the baseline
baseline efficiency of thermal or electric
technology (subcritical coal ηBL 39% %
energy generation systems, Version
power plant)
02.067
Convertion factor from GJ to
- 3.6 GJ/MWh
MWh
EF3: emission factor of the
EFBL,Tech,CO2 0.826 tCO2/MWh Calculated
baseline technology and fuel
Baseline CO2 emission factor EFBL,CO2,y 0.535 tCO2/MWh Calculated
As can be noticed, ex ante the lowest emission factor among the three options is the BM emission
factor o the SING system in 2016.
66 According to "Thermal generation: coal, key in the energetic matrix" (Revista EI; 06/05/2014;
http://www.revistaei.cl/reportajes/generacion-termoelectrica-carbon-clave-en-la-matriz-energetica/), more
than 90% of the coal consumed in Chile is imported and is of the type bituminous coal.
67
According to Kelar coal power plant EIA, page I-33, the efficiency of the power plant would be 35 – 36%.
Thus, for conservativeness, the default efficiency for coal subcritical grid connected power plants
commissioned after 2012 (39%) has been selected according to the methodological tool “Determining the
baseline efficiency of thermal or electric energy generation systems”; Version 02.0.
CDM-PDD-FORM
Therefore, this is the baseline EF to be utilized to estimate the potential emission reductions of the
project:
Description Parameter Value Unit Source / Comments

Quantity of electricity generated
in the project power plant and 10 years crediting period average.
EGPJ,grid,y 3,216,521 MWh/yr
supplied to the grid in year y Calculated
(MWh)
in the project power plant and Not applicable. All electricity generated
supplied to the electricity EGPJ,facility,i,y 0 MWh/yr by the project power plant will be
consuming facility(ies) i in supplied to the grid
year y (MWh)
Baseline CO2 emission factor EFBL,CO2,y 0.535 tCO2/MWh Calculated
Baseline emissions BEy 1,720,839 tCO2/yr Calculated
Project emissions

BOOM, Appendix L, Guaranteed Heat
Guaranteed Heat Rate - 6,331 BTU/kWh
Rate, Page 2
Net efficiency - 6,680 kJ/kWh Calculated
10 years crediting period average.
Natural gas consumption FCNG,y 21,484,941 GJ
Calculated
Weighted average Net Calorific National Energy Balance 2012, Chile;
NCVNG,y 0.0391 GJ/m3
Value of natural gas in year y Annex 2 Charts of density and NCV
IPCC default values at the higher limit
of the uncertainty at a 95% confidence
Weighted average CO2
interval. 2006 IPCC Guidelines on
emission factor of natural gas in EFNG,y 0.05830 tCO2/GJ
National GHG Inventories, Vol. 2
year y
(Energy), Chapter 1, Table 1.4, Pages
1.23 and 1.24
CO2 emission coefficient of
COEFNG,y 0.00228 tCO2/m3 Calculated
natural gas in year y
Quantity of natural gas
combusted in project power FCNG,PJ,y 549,729,582 m3/year
Calculated
plant during the year y
Project emissions PEy 1,252,573 tCO2/yr Calculated
Leakage

Quantity of natural gas
combusted in the project plant in FCNG,y 549,729,582 m3
Calculated
year y
Average Net Calorific Value of
National Energy Balance 2012, Chile;
natural gas combusted during NCVNG,y 0.0391 GJ/m3
Annex 2 Charts of density and NCV
the year y
Liquified Natural Gas; Table 3. Default
emission factors for upstream
Emission factor for upstream emissions for different types of fossil
EFNG,upstream 0.0162 tCO2/GJ
emissions of liquified natural gas fuels; Tool: Upstream leakage
emissions associated with fossil fuel
use; version 02.0
in the project power plant and
EGPJ,grid,y 3,216,521 MWh/yr Calculated
supplied to the grid in year y
(MWh)
Coal/lignite (unknown mine location(s)
or coal/lignite not 100 per cent sourced
Emission factor for upstream EFcoal,upstream,C
0.0028 tCO2e/GJ from within host country); Surface mine,
emissions of coal H4
or any other situation; Table 3. Default
emission factors for upstream
CDM-PDD-FORM
emissions for different types of fossil

fuels; Tool: Upstream leakage
emissions associated with fossil fuel
use; version 02.0.
Selection based on the news: Thermal
generation: coal, key in the energetic
matrix, 06/05/2014;
http://www.revistaei.cl/reportajes/genera
cion-termoelectrica-carbon-clave-en-la-
matriz-energetica/
Methodological tool: Determining the
baseline efficiency of thermal or electric
energy generation systems, Version
Energy efficiency of the baseline
ηBL 39% % 02.0; Option F: Default value; Table 2.
technology
Default efficiency for grid connected
power plants; Subcritical coal power
plant commissioned after 2012.
Conversion factor − 3.6 GJ/MWh -
Emission factor for upstream
emissions occurring in the
EFBL,us,grid,y 0.0258 tCO2/MWh Calculated
baseline due to electricity
supplied to the grid
Leakage upstream emissions LEUS,y 264,922 tCO2/yr Calculated
Emission reductions

Baseline emissions BEy 1,720,839 tCO2/yr
Project emissions PEy 1,252,573 tCO2/yr 10 years crediting period average.
Leakage LEy 264,922 tCO2/yr Calculated
Emission Reductions ERy 203,344 tCO2/yr
B.6.4. Summary of ex ante estimates of emission reductions

Baseline Project Emission
Leakage
Year emissions emissions reductions
(t CO2e)
(t CO2e) (t CO2e) (t CO2e)
2018 (from
1,058,344 770,353 162,932 125,059
01/04/2018)
2019 1,404,712 1,022,469 216,254 165,989
2020 1,453,150 1,057,726 223,712 171,712
2021 1,550,027 1,128,241 238,626 183,160
2022 1,678,389 1,221,674 258,387 198,328
2023 1,918,159 1,396,199 295,299 226,661
2024 1,918,159 1,396,199 295,299 226,661
2025 1,918,159 1,396,199 295,299 226,661
2026 1,918,159 1,396,199 295,299 226,661
2027 1,918,159 1,396,199 295,299 226,661
2028 (up to
472,970 344,269 72,814 55,887
31/03/2028)
Total 17,208,387 12,525,727 2,649,220 2,033,440
Total number
of crediting 10
years

CDM-PDD-FORM
Annual
average over
1,720,839 1,252,573 264,922 203,344
the crediting
period
B.7. Monitoring plan
B.7.1. Data and parameters to be monitored
Data / Parameter EGPJ,grid,y

Unit MWh
Description Quantity of electricity generated in the project power plant and supplied
to the grid in year y
Source of data Direct measurements
Value(s) applied 3,216,521
Measurement The net quantity of electricity generated by the project and supplied to
methods and the grid will be continuously measured by the main meter located at
procedures Kapatur substation (the meter used for billing purpose) and the primary
meter located at Kelar substation (used by the power plant for operation
management).
Both are bidirectional meters Class 0.2 s. according to the National
Commission of Energy requirements68
Monitoring frequency Continuous measurements with storage capacity at least every 15
minutes, according to Chilean Regulations69
QA/QC procedures Electricity meters will be verified and calibrated every 3 years according
to the CDEC-SING requirements.
Monthly aggregated monitoring data is cross checked with CDEC-SING
Monthly detail of energy generation70 that are the reference documents
to emit the electricity sale receipts.
In case of failure of Kapatur meter, Kelar primary meter readings can be
utilized multiplied by a transmission losses factor.
Purpose of data Calculation of baseline and project emissions.
Data / Parameter FCi,y

Unit m3/yr
Description Quantity of fuel type i (natural gas, diesel, etc.) combusted in the project
power plant during the year y
Source of data Onsite measurements
Value(s) applied 549,729,582 (natural gas) / 0 (diesel, etc.)
68 CNE, Exempt Resolution Nº 108, Technical Document 1 “Quality requirements for the measurement
scheme”; 28/02/2012; http://cdec2.cdec-sing.cl/pls/portal/cdec.pck_web_cdec_pages.pagina?p_id=3008

Accessed on 21/07/2016
69CNE, Exempt Resolution Nº 108, Technical Document 1 “Quality requirements for the measurement
scheme”; 28/02/2012; http://cdec2.cdec-sing.cl/pls/portal/cdec.pck_web_cdec_pages.pagina?p_id=3008
70 CDEC-SING Monthly detail of energy generation. Available at: http://cdec2.cdec-
sing.cl/pls/portal/cdec.pck_web_cdec_sing.sp_pagina?p_id=5169. Accessed on: 21/03/2018.
CDM-PDD-FORM
Measurement Volume meters. GNLM (the natural gas provider) measures natural gas
methods and at a metering station consisting of two ultrasonic flow meters and one
procedures analysis station (including a gas chromatograph, a H2S analyzer and a
H2O Analyzer).
Monitoring frequency Continuously
QA/QC procedures The consistency of metered fuel consumption quantities will be cross-
checked by an annual energy balance that is based on purchased
quantities and stock changes.
Where the purchased fuel invoices can be identified specifically for the
CDM project, the metered fuel consumption quantities will also be cross-
checked with available purchase invoices from the financial records.
Purpose of data Calculation of project emissions
Data / Parameter NCVi,y

Unit GJ/m3 / GJ/tonne
Description Weighted average net calorific value of fuel type i (natural gas, diesel,
etc.) in year y
Source of data Values provided by the fuel suppliers in invoices (or reports)
Value(s) applied 0.0391 GJ/m3 (natural gas) / 45.61 GJ/tonne (diesel)
Measurement Measurements will be undertaken in line with national or international
methods and fuel standards
procedures
Monitoring frequency The NCV will be obtained for each fuel i delivery, from which weighted
average annual values will be calculated
QA/QC procedures It will be verified if the values are within the uncertainty range of the
IPCC default values as provided in Table 1.2, Vol. 2 of the 2006 IPCC
Guidelines.
If the values fall below this range additional information from the testing
laboratory will be collected to justify the outcome or conduct additional
measurements.
The laboratories will have ISO17025 accreditation or justify that they
can comply with similar quality standards.
Additional comment The ex ante values are provided by the National Energy Balance 2015,
Chile; Table 1; Pages 32-33.71
In case of absence of values provided by the fuels suppliers during a
period, national default values or IPCC default values at the upper 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, will be utilized.
Data / Parameter EFCO2,i,y

Unit tCO2/GJ
71 Available at:
http://dataset.cne.cl/Energia_Abierta/Reportes/Minenergia/Reporte%20BNE%202015.pdf; Accessed on:
21/03/2018
CDM-PDD-FORM
Description Weighted average CO2 emission factor of fuel type i (natural gas,
diesel, etc.) in year y
Source of data IPCC default values at the higher limit of the uncertainty at a 95%
confidence interval. 2006 IPCC Guidelines on National GHG
Inventories, Vol. 2 (Energy), Chapter 1, Table 1.4, Pages 1.23 and 1.24
Value(s) applied Natural gas: 0.0583; Diesel: 0.0748
Measurement -
methods and
procedures
Monitoring frequency Annually
QA/QC procedures -
Purpose of data Calculation of project emissions.
Data / Parameter EGj,y

Unit MWh
Description Electricity generation in the plant j included in the build margin in year
y
Source of data CDEC-SING or CNE records or publications
Value(s) applied Please refer to the excel file “2016 SING Grid Emission Factor”
attached
Measurement Electricity Generation Annual Detail (GWh)72
methods and
procedures
QA/QC procedures Governmental or official publicly available data utilized.
Data / Parameter EGi,y

Unit MWh
Description Electricity generation in the plant i included in the operating margin in
year y
Source of data CDEC-SING or CNE records or publications
attached
72 Route of access: CDEC-SING web page: Home page/ Operational data / Real Operation / Energy
Generation / Energy Generation Annual Detail 2004-2016. http://cdec2.cdec-
sing.cl/pls/portal/cdec.pck_oper_real_pub.rpt_gen_centrales_sing_x_annos

CDM-PDD-FORM
Measurement Publicly available data from the Governmental or official publicly is

methods and utilized.73
procedures
Data / Parameter FFj,k,y

Unit mass or volume units
Description Quantity of fuel type k (a coal or oil type) combusted in power plant j
included in the build margin in year y
Source of data Plant records
procedures
Purpose of data Calculation of baseline emissions
Data / Parameter FFi,k,y

Unit mass or volume units
Description Quantity of fuel type k (a coal or oil type) combusted in power plant i
included in the operating margin in year y
Source of data Plant records
attached
procedures
73 Route of access: CDEC-SING web page: Home page/ Operational data / Real Operation / Energy
Generation / Energy Generation Annual Detail 2005-2017. http://cdec2.cdec-
sing.cl/pls/portal/cdec.pck_oper_real_pub.rpt_gen_centrales_sing_x_annos Accessed on: 21/03/2018
74 Route of access: CNE website / Statistics / Electricity / Production and Consumption / SING Fuels
Consumption. http://www.cne.cl/estadisticas/electricidad/ Accessed on: 21/03/2018
75 Route of access: CNE website / Statistics / Electricity / Production and Consumption / SING Fuels
Consumption. http://www.cne.cl/estadisticas/electricidad/ Accessed on: 21/03/2018
CDM-PDD-FORM
Data / Parameter NCVj,k,y

Unit GJ/mass or volume units
Description Average net calorific value of fuel type k (a coal or oil type) combusted
in power plant j included in the build margin in year y
Source of data National energy statistics/balances
attached for ex ante values.

procedures
Data / Parameter NCVi,k,y

Unit GJ/mass or volume units
Description Average net calorific value of fuel type k (a coal or oil type) combusted
in power plant i included in the operating margin in year y
Source of data National energy statistics/balances
Measurement Publicly available data from the National energy statistics/balances is
methods and utilized 77
procedures
Data / Parameter EFCO2,m,i,y

Unit tCO2/GJ
76 Ex ante values from Chile National Energy Balance 2015;

21/03/2018.
77 Ex ante values from Chile National Energy Balance 2015;

21/03/2018.
CDM-PDD-FORM
Description CO2 emission factor of fuel type i used in power unit m in year y
Source of data IPCC default values at the lower limit of the uncertainty at a 95%
confidence interval. 2006 IPCC Guidelines on National GHG
Inventories, Vol. 2 (Energy), Chapter 1, Table 1.4, Pages 1.23 and 1.24
Value(s) applied Coal: 0.0895
Diesel: 0.0726
Fuel oil: 0.0755
Natural gas: 0.0543
Measurement -
methods and
procedures
QA/QC procedures -
Data / Parameter ηm,y

Unit %
Description Average net energy conversion efficiency of power unit m in year y
Source of data Ex ante conservatively estimated based on Table 2, Appendix of
Tool09: ”Determining the baseline efficiency of thermal or electric
energy generation systems"
Measurement Not applicable.
methods and
procedures
Data / Parameter GWPCH4

Unit t CO2e/t CH4
Description Global warming potential of methane
Source of data Relevant CMP decision
Value(s) applied 25
Measurement Not applicable
methods and
procedures
Monitoring frequency Not applicable
QA/QC procedures Not applicable

CDM-PDD-FORM
B.7.2. Sampling plan
Not applicable.
B.7.3. Other elements of monitoring plan
Monitoring tasks must be implemented according to the monitoring plan in order to ensure that the
real, measurable and long-term greenhouse gas (GHG) emission reduction for the proposed project
is monitored and reported.
1. Management Structure and Responsibilities
Roles and responsibilities will be defined for the relevant staff involved in CDM monitoring. The
prospect of nominating a CDM Manager will be considered. If appointed, he will have the overall
responsibility for the monitoring system on this Project including the reviewing of project data, quality
assurance and quality control and definition of monitoring duties and responsibilities of project staff.
• Data Collection:
o The net quantity of electricity supplied by the project activity to the grid will be monitored
continuously by the main and cross-check electricity meters. The meters are bi-directional
Class 0.2 s meters with high accuracy measurements. All monitored parameters will be
recorded in the meter memory and automatically send to an internal software. Electricity
measurements will be made in accordance with national procedures and standards.
Invoices shall be collected on a monthly basis and used to cross-check the information
obtained from direct measurement.
o The natural gas consumed by the project will be monitored continuously by a volume
meter.
• Data Calibration:
o The energy meter will be calibrated annually by an external testing facility accredited under
Chilean standards.
o The natural gas meter will be calibrated annually
• Data Report: Internally, data recorded will be consolidated on a monthly basis and will be
checked for quality control purposes, by the appointed staff in the project developer’s head
office.
• Data Archives: The data recording, the data report and the invoices will be filed together with
this monitoring plan. The data archives shall be kept for 2 years after the end of the last
crediting period.
2. Quality Assurance and Quality Control
As mentioned above, the meter used for determining the energy supplied to the grid is a high
accuracy measurement device. In order to assure the quality of measurements, the meter will be
synchronized on a monthly basis with CDEC-SING time measurement equipment.
Procedures for maintenance of the monitoring equipment will be developed and recorded prior to
the start of Project’s operation.
In addition, the accuracy of electricity field measurements will be assured by a coordinated work
between CDEC-SING system operators and project’s operators. Any measurement discrepancies
CDM-PDD-FORM
can be detected by the CDEC-SING system operator who is responsible for undertaking an energy
balance in an hourly basis in each of the grid monitoring points. Energy balance allows the system
operator to identify possible erroneous measurements and define appropriate corrective actions. If
needed, all data generated by the project can be recovered by accessing the CDEC-SING’s system
(SCADA).
3. Training and Monitoring Personnel
All people that participate in the CDM monitoring process will receive proper CDM training, in order
to assure the correct application of the monitoring plan of the Project
4. Verification and Monitoring Results
The monitoring report will be prepared by the monitoring personnel. It will contain the data report,
and the results of the emissions reductions of the project for the defined verification period.
The verification of the monitoring report is a mandatory process required for all CDM projects. The
main objective of the verification is to independently verify that the project has achieved the emission
reductions as effectively generated and projected in the PDD.
1. Kelar Project Monitoring Diagram
The quantity of natural gas delivered for combustion to Kelar project is measured by a meter located
at the entrance of the project which is under the control of GNLM, the natural gas provider.
Meanwhile, the quantity of other fuels (i.e.: diesel, etc.) that could be utilized for a black-start or under
an emergency, are inside Kelar project and under the control of Kelar operator (Kospo).
Regarding electricity measurements, Kelar Natural Gas Combined Cycle Project has a bidirectional
electricity meter (cross-check meter) located at Kelar substation.
All the net electricity generated by Kelar project is dispatched to the transmission line of about 15.2
km that connects the substation with Kapatur substation - property of Tamakaya (a company of BHP
Chile) and under the control of STN – which is the SING connection point.
At Kapatur substation there is only one bidirectional meter (the main meter) that measure the net
electricity dispatched to the SING by Kelar project.
Monthly aggregated monitoring electricity data from the meters is cross-checked between them and
with CDEC-SING Monthly detail of energy generation78 that are the reference documents to emit the
electricity sale receipts.
The diagram below illustrates the measurement arrangements:
78 CDEC-SING Monthly detail of energy generation. Available at: http://cdec2.cdec-

sing.cl/pls/portal/cdec.pck_web_cdec_sing.sp_pagina?p_id=5169. Accessed on: 11/11/2016.
CDM-PDD-FORM
Kelar Kapatur
Substation Substation
Kelar Natural Gas

Combined Cycle
Transmission line SING
Fuel i Cross-check Main
meter electricity electricity
meter meter
i = natural gas, diesel, etc.
B.8. Date of completion of application of methodology and standardized baseline and

contact information of responsible persons/ entities
22/03/2018
Adriana Torchelo
Prosustentia
atorchelo@prosustentia.com
Tel.: +598 99705146
SECTION C. Duration and crediting period
C.1. Duration of project activity
C.1.1. Start date of project activity
29/11/ 2013
The date when the BOOM contract between BHP Chile and Korea Southern Power Co.
(Kospo) y Samsung C&T Corporation consortium was signed.
C.1.2. Expected operational lifetime of project activity
30 years 0 month.79
C.2. Crediting period of project activity
C.2.1. Type of crediting period
Fixed.
C.2.2. Start date of crediting period
01/04/2018
79
BOOM, Article 2. Term, Page 28 to 29.
CDM-PDD-FORM
C.2.3. Length of crediting period
10 years 0 month
SECTION D. Environmental impacts
D.1. Analysis of environmental impacts
As per the provisions established in Art. 10 of the Chilean Environmental Law Nº 19300/9480,
modified by Law Nº 20473/1081 and its Regulatory Decree 40 from 27/03/201482, all power plants
with installed capacity higher than 3 MW must submit the project to the national Environmental
Impact Assessment System (abbreviated in Spanish as SEA) to obtain the environmental approval.
Furthermore, according to the mentioned law, depending on the effects, characteristics and
circumstances of the projects, the project developer shall submit an Environmental Impact
Declaration (DIA) or an Environmental Impact Assessment (EIA) to the SEA.
Additionally, according to the SEA, each region in Chile has its own Regional Environmental
Commission (abbreviated in Spanish as COREMA) in charge of approving all new projects in the
respective region.
Due to the above and considering that the Project also includes the construction of a natural gas
pipeline to supply the fuel to the power plant, which is also subject of an environmental impact
assessment as per the provisions of the mentioned law, BHP elaborated and submitted the
Environmental Impact Assessment study (EIA) to the SEA on 20/11/201283.
For the present project, the Environmental Assessment Commission of Antofagasta Region issued
a favorable Environmental Qualification Resolution (RCA) (Nº0155/2013) on 20/06/201384.
Furthermore, on 20/08/2014 the Project submitted an Environmental Impact Declaration containing

modifications to the Project. A favorable Environmental Qualification Resolution (RCA)
(Nº0047/2015) on 10/02/201585.
The plant has been designed to comply with the thermoelectric plants emission standard
established in the DS 13/2011 of the Ministry of the Environment.
D.2. Environmental impact assessment
According to the EIA, 14 impacts were rated during the construction phase within 6 components
(air quality, noise, soil, fauna, marine environment and human environment). Of these 14 impacts,
only one resulted positive and it was associated with hiring of low hierarchy labor. For the same
period, the remaining environmental impacts were qualified as negative; being one of high rate
(loss of habitat for nesting Sterna lorata (gaviotín chico) caused by the plant construction and
access road expansion), while the remaining resulted of low rate.
For the operation stage 6 impacts were scored, resulting all of low hierarchy. They are related to
80 Law 19300/94; http://bcn.cl/1lzic Accessed on: 21/07/2016.

81Law 20473/10; http://bcn.cl/1m5gy Accessed on: 21/07/2016.
82 Regulatory Decree 40; Regulation of the SEA; 27/03/2014. http://bcn.cl/1n8uk Accessed on: 21/07/2016.
83 http://seia.sea.gob.cl/expediente/expedientesEvaluacion.php?modo=ficha&id_expediente=7547573
Accessed on 21/07/2016.
84 http://seia.sea.gob.cl/archivos/RCA_0155-2013_KELAR.pdf Accessed on: 11/10/2014.
85.

CDM-PDD-FORM
air quality and its effects on the health of people and natural resources; noise; water quality and
marine biota. Such low hierarchy is the result of considering mitigation measures incorporated into
the project design.
According to the EIA, besides the design conditions that minimize environmental impacts, the main
mitigation, restoration and compensation measures are:
 Construction Stage: considering that the most significant impact is the loss of habitat for
nesting Sterna lorata, various mitigation and compensation measures and restoration were
proposed. The development of a compensatory measure was proposed to the local authority
through the enhancement of geographical areas that have been documented as important for
this species in the Region of Antofagasta (2 sites: Buchanan Jones and Playa Grande). It was
also considered, once construction is finished, the restoration of coastal areas and areas where
the pipeline is located. Some of the mitigation measures associated to fauna are: perimeter
isolation of project site during the construction phase, active support of the Foundation for
Sustainability of Gaviotín Chico; pipeline construction outside nesting season, among others.
Other measures during the construction phase that allowed qualify impacts on a low hierarchy
are: training workers to foster and promote responsible behavior towards the local community;
under similar conditions, to prioritize the purchase of supplies and materials from local
companies; food and transport services will be recruited preferably locally; wetting the areas of
work to minimize dust emissions; etc.
 Operational Stage: regarding air quality: by design, the combined cycle plant incorporates
technology that enables compliance with the emission standard under any operating regime. In
relation to water quality and the potential impact on marine biota, the project design
incorporates a semi closed cooling system with cooling towers, making the amount of water
taken from the sea and discharged effluents to be considerably less than those required in an
open cycle.
SECTION E. Local stakeholder consultation
E.1. Solicitation of comments from local stakeholders
As requested by article 19 of the Environmental Impact Assessment Regulation System, Kelar

Project EIA was sent to the Regional Director of Environmental Assessment Service (SEA, in
Spanish) on 20/11/201286 with the aim of making it available to citizens, organizations and
individuals requesting information about this Project. Any stakeholder can consult it during the
evaluation process and remains publicly available after its approval.
 National Forestry Corporation, Antofagasta Region

 DGA (General Directorate of Water) Regional Directorate, Antofagasta Region
 DOH (Hydraulic Works Directorate) Regional, Region of Antofagasta
 SAG (Agricultural and livestock Services) Regional Directorate, Antofagasta Region
 SEC (Superintendence of Electricity and Fuels) Regional Directorate, Antofagasta Region.
 SERNAGEOMIN (National geology and mining service) Regional Directorate, Antofagasta
Region
 SERNATUR (National Tourism Service) Regional Directorate, Antofagasta Region
 National Fisheries and Aquaculture Regional Directorate, Antofagasta Region
 Marine Government of Antofagasta
 CONADI (National Corporation of Indigenous Development) Regional Office, Region of
Antofagasta
 SEREMI (Regional ministerial secretariat) of Energy, Antofagasta Region
Accessed on 21/07/2016.
CDM-PDD-FORM
 SEREMI (Regional ministerial secretariat)of Agriculture, Antofagasta Region

 SEREMI (Regional ministerial secretariat)of National Assets, Antofagasta Region
 SEREMI (Regional ministerial secretariat)of Public Works, Antofagasta Region
 SEREMI (Regional ministerial secretariat)of Health, Antofagasta Region
 SEREMI (Regional ministerial secretariat)of Transport and Telecommunications,
Antofagasta Region
 SEREMI (Regional ministerial secretariat)of Housing and Urban Development, Antofagasta
Region
 Regional Secretariat of Social Development, Antofagasta Region
 Regional Secretariat of the Environment, Antofagasta Region
 National Monuments Council
 Undersecretariat of Fisheries and Aquaculture
 Superintendence of Sanitary Services
For further information about the institutions participating in the process please refer to the
Environmental Assessment Service of the Chilean Government webpage.87
Additionally, as part of the EIA approval process, several “activities of citizen participation” (as per
its name in Spanish in the SEA webpage) were conducted from 06/12/2012 up to 05/03/2013.
These activities include the presentation of the project developer presentation of the project to the
community of Mejillones on 17th and 18th of December of 2012. The registries of all these activities,
including lists of participants, meeting minute and photographic registry, are available at the SEA
webpage. 88
It is important to mention that the EIA states that Kelar Projet is a GHG mitigation project activity
and by implementing it the company achieves its goal of ensuring the supply of electricity for its
operations in a cleaner and sustainable manner. Moreover, indirect emissions of greenhouse
gases in mining are reduced due to electricity consumption in the production of copper.
E.2. Summary of comments received
After the EIA is sent to the Environmental Assessment Service to be available to the stakeholders,
it receives all kind of comments that are consolidated by the Regional Director in a report called
Consolidated Report of Clarifications, Corrections and Additions Requirements (ICSARA, in
spanish) to the Environmental Impact Assessment of the "Kelar Natural Gas Combined Cycle
Central". This report contains the observations generated by the organizations with environmental
competence who have participated in the EIA reviewing process. The answer to this Consolidated
Report must be expressed through a document called Addendum to the EIA which must be
submitted in 4 copies, in 90 working days.
For the case of Kelar Project 2 Consolidated Reports (No. 1 and No.2) where issued in 18th
January 2013 and 3rd May 2013 respectively.
The main comments received from the participating stakeholders were related to technical and
environmental aspects and suggestions in relation to the executive project, construction and
operation phases.
87http://seia.sea.gob.cl/expediente/expedientesEvaluacion.php?modo=ficha&id_expediente=7547573
88 http://seia.sea.gob.cl/expediente/xhr_pac.php?id_expediente=7552880 Accessed on: 21/03/2017
CDM-PDD-FORM
The Consolidated Report No.1 gathered comments on 10 different topics with various subtopics
(54 in total), which in turn were subdivided in minor topics. The main topics were:
− Project Description
− Compliance Plan of Applicable Environmental Law - Environmental Regulation
− Compliance Plan of Applicable Environmental Law - Sectoral Environmental Permits
− Effects, characteristics or circumstances of Article 11 of the Law that give origin to the need
for an EIA
− Baseline
− Prediction and assessment of impacts and risk situations
− Plan of mitigation, reparation and /or compensation measures
− Measures to prevent risks and accident control, if correspond
− Monitoring plan of relevant environmental variables that give rise to EIA
− Proposition of considerations or specific requirements that the owner should meet to run
the project or activity
−
The Consolidated Report No.2 gathered comments on 5 different topics with some subtopics (8 in
total), which in turn were subdivided in minor topics. The main topics were:
− Effects, characteristics or circumstances of Article 11 of the Law that give origin to the need
for an EIA
− Prediction and assessment of impacts and risk situations
− Plan of mitigation, reparation and /or compensation measures
− Monitoring plan of relevant environmental variables that give rise to EIA
− Proposition of considerations or specific requirements that the owner should meet to run
the project or activity
E.3. Report on consideration of comments received
All questions related to the project EIA were answered in two addendums and submitted to the SEA89
on 5/04/2013 and 23/5/2013. Doubts were clarified and all relevant suggestions were considered.
SECTION F. Approval and authorization
The Letter of Approval from Chile, which authorize the voluntary participation of BHP Chile Inc. and
the present project activity in the CDM. has been issued on 01/03/2018.
-----
CDM-PDD-FORM
Appendix 1. Contact information of project participants and

responsible persons/ entities
Project participant X Project participant

and/or responsible Responsible person/ entity for application of the selected methodology
person/ entity (ies) and, where applicable, the selected standardized baselines to the
project activity
Organization name BHP Chile Inc.
Street/P.O. Box Cerro El Plomo 6000, 18th floor, Las Condes
Building
City Santiago de Chile
State/Region
Postcode
Country Chile
Telephone +56 2 2579 5654
Fax -
E-mail
Website
Contact person
Title
Salutation Ms.
Last name Mengual
Middle name
First name María Consuelo
Department
Mobile
Direct fax
Direct tel.
Personal e-mail consuelo.mc.mengual@bhpbilliton.com
Project participant Project participant

and/or responsible X Responsible person/ entity for application of the selected
person/ entity methodology (ies) and, where applicable, the selected standardized baselines
to the project activity
Organization name ProSustentia
Street/P.O. Box
Building
City Montevideo
State/Region
Postcode
Country Uruguay
Telephone +598 99705146
Fax
E-mail info@prosustentia.com
Website www.prosustentia.com
Contact person
Title

CDM-PDD-FORM
Salutation Mrs.
Last name Torchelo
Middle name
First name Adriana
Department
Mobile +598 99705146
Direct fax
Direct tel. +598 27106662
Personal e-mail atorchelo@prosustentia.com
Appendix 2. Affirmation regarding public funding
Not applicable.
Appendix 3. Applicability of methodology and standardized

baseline
Not applicable.
Appendix 4. Further background information on ex ante

calculation of emission reductions
Not applicable.
Appendix 5. Further background information on monitoring

plan
Not applicable.
Appendix 6. Summary of post registration changes
Not applicable.

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CDM-PDD-FORM

Project design document form for

PROJECT DESIGN DOCUMENT (PDD)

Version number of the PDD 06

Completion date of the PDD 22/03/2018

Project participant(s) BHP Chile Inc.

Host Party Chile

Applied methodology(ies) and,

Sectoral scope(s) linked to the

Estimated amount of annual average

Version 08.0 Page 1 of 54

SECTION A. Description of project activity

A.1. Purpose and general description of project activity

Version 08.0 Page 2 of 54

- Increasing the security of the electricity supply in the country;

- Generating jobs and contributing to the development of technical skills;

- Supporting technology and know-how transference from other regions/countries.

A.2. Location of project activity

A.2.1. Host Party

A.2.2. Region/State/Province etc.

Antofagasta Province, Antofagasta Region.

A.2.3. City/Town/Community etc.

A.2.4. Physical/Geographical location

Corners Latitudes Longitudes

The following map show the precise location of the project.

A.3. Technologies and/or measures

The main technical parameters of the CCGT are presented below:

Version 08.0 Page 4 of 54

Steam turbine generator (1)

Version 08.0 Page 5 of 54

- Project power plant load factors

- Scenario existing prior to the project implementation

Coal subcritical power plant Value/Description Reference

A.4. Parties and project participants

Version 08.0 Page 8 of 54

A.5. Public funding of project activity

There is no public funding for the proposed project.

SECTION B. Application of selected approved baseline and monitoring

B.1. Reference of methodology and standardized baseline

- ACM0025: Construction of a new natural gas power plant, Version 2.019

B.2. Applicability of methodology and standardized baseline

19 Available at: https://cdm.unfccc.int/methodologies/DB/H60BQPTHMKITC6TRSIJL567VVWS0Z0; Accessed

Version 08.0 Page 9 of 54

Version 08.0 Page 10 of 54

In addition to the above-mentioned applicability criteria, ACM0025 Version 02.0 establishes in

B.3. Project boundary

Source GHGs Included Justification/Explanation

CO2 Yes Main emission source

Fuel CO2 Yes Main emission source

33 SIC-SING Electrical Sector report, August 2012, Systep Ingeniería y Diseños

B.4. Establishment and description of baseline scenario

Sub-step 1a: Define alternatives to the project activity

Version 08.0 Page 12 of 54

34 National Commission of Energy (CNE); Statistics/Energy/Electricity/Production and Consumption/Gross

Version 08.0 Page 13 of 54

Outcome of Step 1a:

Sub-step 1b: Consistency with mandatory laws and regulations

Outcome of Step 1b: