TGF’s team at work in Alchevsk Coke Plant Waste Heat Recovery project in Ukraine

Alchevsk coke plant in Ukraine. Photo: OJSC AlchevskkoksIn the Ukrainian city of Alchevsk, a coke plant is running more efficiently and combating global climate change with support from NEFCO. The Alchevsk Coke Plant Waste Heat Recovery project was the first Ukrainian project to be contracted for the Baltic Sea Region Testing Ground Facility (TGF), a 35-million-euro carbon fund managed by NEFCO. The project is estimated to reduce over 1.1 million tonnes of carbon dioxide emissions by the end of the year 2012.

The project has been developed as a Joint Implementation (JI) project under the Kyoto Protocol, enabling the project owner to earn additional revenue against independently verified reductions in greenhouse gas emissions. Governments and EU companies can use these Emission Reduction Units (ERUs) to comply with their emission caps under the Kyoto Protocol and the EU Emissions Trading Scheme, respectively. The TGF’s investors include the Nordic and German states as well as some large private companies from these countries.

The project consists of captive cogeneration with waste heat recovery at Alchevsk Coke Plant (OJSC Alchevskkoks) to displace the use of natural gas and grid electricity. Prior to the project, a traditional method of coke wet quenching was used. The project introduces a modern coke dry quenching method, installed in October 2007, which enables the recovery of waste heat and its utilization to generate heat and electricity. The project entails installation of a waste heat recovery system, a highly efficient boiler firing coke oven gas and blast furnace gas and a 9 MW turbine generator connected to the boiler, generating up to 54 GWh per annum of net electricity. The boiler and turbine generator will be commissioned in February 2010. The project reduces greenhouse gases by displacing fossil fuel-based energy and avoiding the associated carbon dioxide emissions and as a co-benefit, reduces also local air pollutants.

The project progressed smoothly and swiftly through the required steps; the process from first contact to signed contract took less than six months. The project was first presented to NEFCO in late July 2009 by CF Partners. By mid-August, a Term Sheet was signed, NEFCO’s environmental screening was made and final approval was granted by the TGF Investors’ Committee. The TGF team conducted thorough environmental, financial, legal and technical due diligence during August and September. In October, the TGF team visited the site together with the project developer, Sumitomo Corporation. Meanwhile, Bureau Veritas performed an independent assessment - known as determination in Kyoto jargon - to confirm that the project meets international JI criteria. The determination was successfully finalised in November 2009 and host country approval was received the following month.

”The whole process has been like straight from a JI textbook. Requested information was provided promptly and communication between the different parties was seamless. Thanks to our extremely efficient and well prepared host, OJSC Alchevskkoks, the site visit was smooth and fruitful, and also very enjoyable”, recalls Hanna-Mari Ahonen, TGF’s Project Manager.

”By buying carbon credits from this project, we are leveraging financing for climate change mitigation globally and also for energy efficiency, energy security, cleaner technology and better air quality locally", she adds.