Calibration regarding project assessment requirements - RIT Perspectives Vinay Deodhar, RIT Module th JCW Bonn, March 2011

New Workflow Just one opportunity to the PP/DOE and they have to get it right, else face rejection Of course more time given for preparing the appropriate response More balanced and fare process, with two “teams” conducting the review EB role graduated to a higher level of judging in case of differing reviews Reasoning of decision to reject has to be given Problems with bordering cases, i.e. where the project can be registered or issuance can be agreed with minor revisions – even such cases decision has to be rejection!

Major issues continue to be same.. Investment analysis – Input values not explained and properly validated. Critical ones being tariff, PLF, investments – WACC determination Prior consideration of CDM in the investment decision Barrier analysis Applicability of the baseline methodology Project implementation as per the design in registered PDD

Investment analysis Main issue is validation of the input values of main parameters.VVM mandates independent validation of critical parameters like – Plant load factor (EB guidance regarding this not referred to) – Tariff (EB decision for highest tariff in provinces in China also needs to be considered) – Costs of the capital equipment – Coefficient of effective electricity

Barrier analysis Barriers not validated appropriately EB guidance on objective validation of presence of barriers Latest EB decisions regarding policy changes not applied correctly

Project implementation Many times verification of project implementation as per PDD is not adequate Not clear whether DOE verified whether the values of critical parameters at the time of PDD preparation remain valid Guidance on type of changes not clearly adhered

Suggestions RIT is a resource of international experts from all over the world available to the EB on tap and should be utilized effectively, judiciously but extensively Specialization among RIT members regarding project types and countries Inputs from RIT in small group for rule changes alongside public commenting process Meetings of RIT members should be convened at least once in six months in conjunction with the EB meetings

Thank you on behalf of your RIT!