JCM Project Planning Study (PS) 2014 – Final Report

MOEJ/GEC JCM Project Planning Study (PS) 2014
Summary of the Final Report“Energy Saving at Phnom Penh Water Supply Authority (Cambodia)
by Improving Efficiency of Water Treatment Plants”(Implementing Entity: METAWATER Co., Ltd.)
1．Overview of the Proposed JCM Project

Project site

Matsuo Consultants Co., Ltd: Joint implementer in charge of review of mechanicaltechnologies and evaluation of environmental integrity
Deloitte Touche Tohmatsu LLC: Subcontractor in charge of preparation of the MRV
methodology form for greenhouse gas (GHG) reduction
Phnom Penh Water Supply Authority: Project implementing body, counterpart andlocal survey cooperator
Phnom Penh Municipality, the Kingdom of Cambodia (Cambodia)

Category of project

Energy Saving

Description ofproject

The Phum Prek Water Treatment Plant (WTP) and the Chamkar Mon WTP of thePhnom Penh Water Supply Authority (PPWSA), Cambodia’s largest water supplier,
were constructed in the 1990s. Pump facilities are aging and the specifications of thepumps and the plants’ power receiving and transforming remain as they were at thetime the facilities were built. The efficiency of their equipment is low compared withequipment available in Japan. Electricity charges in the Phnom Penh Municipality
are as high as US$0.18/kWh, which is equivalent to those in Japan. There is great
demand for a reducing these charges. This project is intended to improve efficiency
at these water treatment plants and reduce greenhouse gas emissions by introducing
energy-saving equipment from Japan.

Study partners

Expected project
implementer

Initial investment
Annualmaintenance cost
Willingness toinvestment

Financial plan ofprojectJapan

METAWATER Co., Ltd

Host country

PPWSA

US$ 1,243,700

Date ofgroundbreaking

US$ 5,300 Construction period
Under deliberation

Date of projectcommencement

March, 2016 (scheduled)
14 months
April, 2017 (scheduled)

PPWSA is the first enterprise listed in the Cambodian Securities Exchange. The
company’s operating revenue increased from US$ 7.7 million in 2001 to about
US$ 28.5 million in 2011. Faced with aging facilities, PPWSA has established arenewal plan and has raised funds to replace and upgrade equipment. The economic
feasibility and profitability of this study has been indicated, and the initialinvestment cost can be covered by the capital that has been raised. Equipment
maintenance costs are handled as normal operating expenses.

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JCM Project Planning Study (PS) 2014 – Final Report

GHG emission
reductions

485 tCO2/year*① Energy saving achieved by introducing inverter-control system topumps. : 440 tCO2/year*2② Reduction of electricity transmission loss between water treatment
plants and water intake plants. : 40 tCO2/ year
③ Energy Saving by introducing high efficiency electric transformers. :5 tCO2/ year
* Rounded half off to the nearest whole number.

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JCM Project Planning Study (PS) 2014 – Final Report

2. Study Contents(1) Project development and implementation
1) Project planning
Project Implementation System
The international consortium will have METAWATER act as administrative agent and be responsible for deliveryof energy-saving equipment and management of electrical engineering. Local contractors will be among themembers of the consortium. Candidates to be considered will be local contractors with proven records ofhigh-quality work in construction and mechanical and electrical work. The target implementation system will
include Matsuo Consultants Co., Ltd who will provide technology used in the management of pumps and motors,
and Deloitte Touche Tohmatsu LLC will assist capacity building of the PPWSA, the project implementing body,in such areas as implementation of MRV. This is the first time a Joint Crediting Mechanism will be applied in a
project involving a water utility that is expected to utilize Japanese water-supply technology and know-how. It
should be noted here that, currently most water services, including management and maintenance, in Japan areprovided by public utility corporations, and private enterprises have not accumulated a great deal of experience inmanaging water supply businesses. In this context, the Water and Sewer Bureau of Kitakyushu City, which has
substantially contributed to the development of Cambodia’s water supply enterprises, will participate and provide
assistance with the utilization of Japanese water supply technology.

Construction and Operation Schedules
Among the water treatment plants managed by the PPWSA, the Phum Prek Water Treatment Plant (WTP)
supplies water mainly to the center of Phnom Penh Municipality. To cope with increasing water demand the plantis promoting a plan to upgrade its distribution pumps, using pumps that will be larger in scale. The PPWSA has
already purchased a 520kW and a 272kW pump, to replace a 320kW and a 180kW pump. The motors to bepurchased allow introduction of an inverter-control system. This study identified introduction of theinverter-control system as a target for the project because using this system is considered to be a very effective
way to reduce GHG emissions.
For the Chamkar MonWTP, a plan is under way to have it specialize in water supply to newly
constructed commercial facilities and newly developed areas. Day-and-night water demand is expected tofluctuate greatly when this plan is implemented, and the introduction of an inverter-control system is considered to
be an efficient option to deal with this. This study assumes that an inverter-control system will be used for one
pump.
Electricity transmission on lines from WTPs is how power is received at both the Phum Prek Water Intake Plant(WIP) and the Chamkar MonWIP. The PPWSA has expressed concern over not only transmission loss, butalso disconnection risk. Actually, a disconnection accident occurred in the past in the line from the Phum Prek
WTP to the WIP. This study indicates that changing the way electricity is received to direct reception has
advantage in that it will reduce transmission loss and greatly reduce the risk of disconnection. Accordingly, thischange has been made a target of this project.
The transformer used to transform 3.3kV at the Phum Prek WTP to 380-220V is supplying power to low-voltage
power utilities. This transformer has been used since plant operation began in 1995 and is increasingly showing
signs of aging. The study indicates that upgrading the transformer to a high-efficiency unit will enable significant
improvement of energy efficiency. Accordingly, this change has been made a target of this project. The upgrades
and improvements described above require partial or total electric power outage. The PPWSA estimates that amaximum of 2 hours of outage in the nighttime is acceptable, and the work will be done within this time period tominimize adverse effects on plant operations.

Management System and Achievements of the Project Implementing Body
The PPWSA was established in 1954. Its shares were listed on the Cambodian Securities Exchange in April 2012.
As of 2014, the PPWSA was capitalized at about US$21 million, and it had 727 employees. Operating profit has
steadily grown, increasing from about US$2.2 million in 2001 to about US$9.1 million in 2011, and about
US$12.8 million in 2013.
The PPWSA’s board of Directors consists of a total of 7 directors, 1 from the Ministry of Industry andHandicraft (MIH), 1 from the Ministry of Economy and Finance (MEF), 1 from the Phnom Penh Municipality

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JCM Project Planning Study (PS) 2014 – Final Report

Council, 1 outside director, one public investor, and 2 from the PPWSA. The Board sets the annual budget andmakes investment decisions. It has quarterly meetings, and special meetings are held on an as-needed basis.
Included among the executives working under the Board of Directors are 1 Director General and 6 Deputy
Director Generals.

Evaluation of Business Profitability(1) Assumptions used in evaluation of business profitability
1) Project implementation system
It is assumed that the PPWSA has completed facilities as a part of its own water-supply facilities and willcontinue operations. The possibility of separating this project from the PPWSA’s business and establishingan SPC is low. The source of funds for facility maintenance (including investment costs) not covered by theJCM financial program will be determined on the basis of the PPWSA budget. The evaluation assumes that a
portion of the earned surplus in the operating budget can be used as a source of investment funds.
2) Project period
The PPWSA is a going business, but the achievements of the project must be evaluated within a certain
period of time. The standard lifecycle of energy-saving equipment is around 20 years, during whichinvestment must be recovered, and profit appropriate to the invested capital must be secured.
3) Currency used in evaluation
All of amounts is evaluated on a US$ basis.
4) Effect of reducing electricity charges
The advantages of reducing electricity charges are evaluated on the basis of the current mean purchase priceof US$0.18/kWh. The comparison is discussed using the reduction of electric power consumption in the
proposed JCM reference.
5) Price fluctuation
All of costs including maintenance expenses are based on US dollars because the inflation rate in Cambodia
is low and stable for a developing country. The annual average inflation rate for the past 15 years (1998 –2013) is 4.2%. It remains stable at a maximum of 8%, with the exception of an abnormal 25% in 2008. Thiscan be averaged at 2.8% annually, excluding 2008.
6) Discount Rate
An annual discount rate of 3% is used in the present worth evaluation and was employed during discussions
with the PPWSA.
(2) Applicable evaluation indices:
The business profitability evaluation indices to be used to ensure multilateral evaluation are “pay-backperiod,” “net present worth” and “internal rate of return.”
1) Pay-Back Period method
The pay-back period is an index playing an important role in investment decision-making. In this evaluation,
the PPWSA considers 6 years is used as a rough standard offering certainty of investment recovery.
2) Net Present Worth (NPW) method
This is based on Discounted Cash Flow (DCF), which means the setting of the discount rate and the project
lifecycle must be rational. In this study, a general standard service life of 20 years is used, while a 10-yearplan for early confirmation of the results and a 30-year plan based on the concept of using the quality
material for long period were also considered. In the discussion, a plan with a 3% discount rate is used
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JCM Project Planning Study (PS) 2014 – Final Reportbecause there is no specific standard value.

3) Internal rate of return (IRR) method
As in the case of the NPW method, 20-year is used. Investment decisions are made on the basis ofcomparison with capital cost. Since capital cost is based on the capital policy of the individual enterprise inquestion, final decisions depend on the PPWSA. The PPWSA’s return on net assets, which is approximately
6%, is presented as a reference. When Japanese private enterprises engage in a PPP project overseas, they set
forth higher profitability, which includes accounting for business risk. This project involves a public
enterprise that essentially does not seek profitability, which indicates that a return on net assets of 6% or lessshould be sufficient.
(3) Evaluation results
Table 1 shows the results of the evaluation of the contents of the proposals (options) for the Phum Prek
WTP and Chamkar Mon WTP (PP WTP and CM WTP in this table). The discount rate is set at 40% of
the total initial investment cost. Among the individual options, specifically, the proposed introduction of
an inverter-control system for PP WTP (Option 1) and the proposed reduction of transmission loss for CM
WTP (Option 5) are evaluated as offering sufficient return effects on investment because the Pay-Backperiod is around 6 years that is a target value of the PPWSA, the NPW in a project lifecycle of 20 years
exceeds the investment amount (with a DCF return 2 times or more greater than the investment), and the
IRR for 20 years exceeds 10%. The evaluation also indicates that other options could not independently
achieve such a return on investment. When all options are employed, however, the return is evaluated tobe sufficient with the Pay-Back period within 6 years, the NPW larger than the initial investment value,
and the IRR with nearly 18%, so that efforts is being made to encourage the PPWSA to employ all of
options.
Table 1. Business profitability evaluation result
After JCM financial program
Initialinvestment

Electricity
savingPay-back
periodNPW for
20 years

IRR for
20 years(US$)(MWh/year)(Year)(US$)(%/year)

Option 1 (PP WTP)
Inverter

560,200667

2.9

1,374,195

34.1%

Option 2 (PP WTP)
Transmission loss

327,900

40

27.3-89,622-2.8%

Option 3 (PP WTP)
High eff. Transformer

109,300

18

20.2-17,377-0.1%

Total(PP WTP)

997,400725

4.8

1,267,195

20.4%

Option 4 (CM WTP)
Inverter

164,400

37

15.2-2,085

2.8%

Option 5 (CM WTP)
Transmission loss

81,90038

7.2

52,622

12.6%

Total(CM WTP)

246,300

75

11.1

50,537

6.4%

Total

1,243,700

800

5.4

1,317,732

17.9%

Financial Plan for the initial investment/maintenance and MRV
The PPWSA has established a plan and raised funds for upgrades and improvements to cope with ageing
equipment. When economic feasibility and profitability of this study are identified, these funds can be used tocontribute to the initial investment. After indicating the initial investment for this project, a hearing was conductedwith PPWSA officials to obtain their opinions. They said that an initial investment from the PPWSA’s own funds
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JCM Project Planning Study (PS) 2014 – Final Report

would be considered provided that a JCM financial program is offered to a maximum extent while the scale of theinitial investment for the project is maintained. The PPWSA has high expectations of the project not only becauseof the opportunity it provides to reduce electricity charges, but also because of its potential business profitability
and GHG reduction. In order to realize the project, discussions are under way concerning PPWSA budgetarymeasures, explanation of this project to the Board of Directors, and procurement methods. The PPWSA officials
also said that, in this scale of the project maintenance expenses, the equipment maintenance expenses and MRV
may be accommodated within the normal budget for operating costs.

Risk Analysis(1) External environmental factors
General external environmental factors are the PESTEL (Politics, Economy, Society, Technology, Environment,
Law) elements. Although their impacts are limited, in this project, the risk of economy, technology, and law isconsidered as follows:① Among economic risk factors, the one affecting the feasibility of business most is the changes in the valueof the country’s currency. Cambodia, the target country of this project, has its own currency, the riel, but
the Cambodian market is operated on a US$ base. The currency risk of this project that is subject tobusiness evaluation on a US$ base is limited to the cost of equipment supplied from Japan.
② The technology risk factor is a risk that the project facilities may have to be upgraded with the newtechnology before completion. In other words, further technology upgrades in the future may make theproject facilities outdated halfway through the project cycle. The target Pay-Back period is set at around 6
years so that the investment recovery can at least be completed even if further upgrades are needed
halfway into the project.
③ Legal risk includes the possibility that the application of Japanese superior environmental technologies
targeted by JCM might be contracted to a third-country enterprise as a result of compliance with theprocurement requirements of the public enterprise. To cope with this type of risk, discussions will be heldwith the PPWSA and other Cambodian agencies concerning ordering methods. One is a method ofordering while increasing the necessity of utilizing Japanese products. For this purpose, a cost-related
disadvantage can be minimized by means of the effect of weak yen, and the JCM financial program and aperformance requirement for procurement can also be set as a tendering requirement. Another method
would involve ordering according to a comprehensive evaluation method being established in Japan.
(2) Internal environmental factors
Decision making for investment in the project requires the PPWSA to take certain budgetary steps
beforehand. The budgetary year of the PPWSA is the calendar year (January to December). Many adjustments
will have to be made to achieve implementation in 2015. Some confusion may result from adjusting theschedule in Cambodia and the JCM procedural schedule in Japan, and this could possibly hinder concluding acontract. This issue may be overcome by taking steps to prevent misunderstanding through closer ties between
our study team and the relevant organizations such as Japanese Government, the PPWSA, and otherCambodian agencies.
Other Items related to Business Feasibility(1) Tax system① Taxability and operating conditions of permanent establishment (PE)Except for some ministerial ordinances containing descriptions related to PE, no ministerial ordinance deals
with PE in detail. Confirmation could not be made regarding taxes on enterprises equivalent to PE or whether
or not PE taxation has occurred in the course of practical operation.
② Tax incentives / Impeditive tax system
Currently, we do not see anything equivalent to a special tax incentive or impeditive tax system. Cambodia has
increased its minimum wage and faces requests for various preferential tax measures from foreign enterprises.
But no specific measures have been identified yet.
③ Customs / VAT

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JCM Project Planning Study (PS) 2014 – Final Report

A hearing was held with the General Department of Customs and Excise (GDCE), but no significant reply
could be obtained due to a lack of experience in importing of products utilizing the Joint Crediting Mechanism.
Generally, tax benefits can be received by applying for such benefits with an approval letter on tax benefits
from the PPWSA to the GDCE.

2) Permits and Licenses for project development and implementation
The urban water supply business in Cambodia is under the jurisdiction of the MIH. The PPWSA engages in
the water supply business in the Phnom Penh Municipality under a license from the MIH. No new license has
to be acquired. This project is to upgrade part of aged equipment by installing new equipment that will
provide higher efficiency. Initially it was thought that an environmental assessment would be needed to obtaina permit and license, but the hearing with the PPWSA confirmed that this was not necessary. Actually, oncethe project investment details have become clear, normal procedures will be followed after discussions with
the MIH Water Supply Department.

3) Advantage of Japanese technologya) Superiority of Japanese technology
Distribution pumps
Distribution pumps used at water supply facilities works must be manufactured according to use conditions
and are required to be superior in performance and to have toughness and durability to endure long-time use.
The WTPs in the host country have pumps made in Japan, Europe, the US, China, and Korea. In the case of
the Phum Prek WTP and the Chamkar Mon WTP, the target WTPs in the project, most of operating pumps
are made by Kubota (a few by Ebara). Operation with these pumps has been successful for more than 10
years. It is believed that their efficiency and durability are favorably evaluated on the basis of these operating
results. According to hearings with end users, there are cases in which pumps made in Europe and the US
break down in a little more than ten years, and that those made in China break down within a few years.
When they are evaluated in terms of lifecycle costs and when consideration is given to their useful life span,
although their initial purchase price may be higher, selection of the long-life pumps made in Japan can beconsidered to offer greater benefit.
Inverters
Japan is actively engaged in developing inverter technology. A major manufacturer succeeded incommercialization of a transistor inverter, the world first, in 1974. Currently, this manufacturer has
developed such innovative technologies as zero-speed high torque even without encoder. The manufacturer
is leading the world in the field of efficiency and energy saving with high-voltage inverters developed byintegrating a series of multiplex high-voltage inverters with low-voltage inverters. This technology has
achieved power conversion efficiency as high as 97% and a power factor of 0.95 (at rated load) over a wide
rotation range. This inverter is provided with an interface for user support during maintenance andadjustment, which leads to access to high technology for maintenance. When compared with inverters madeby Chinese enterprises, the inverters made by Japanese manufacturers are generally superior in durability.
Evaluation based on a balance between the performance and price will show the advantages of selecting
Japanese inverters.
Transformers
As a part of global warming prevention policies in Japan, the country’s Law on the Rational Use of Energy(Energy Saving Law) has made it compulsory to achieve a standard value through a “top-runner method” toimprove the transformer efficiency. This standard value is attained by using what is called the “top-runner

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JCM Project Planning Study (PS) 2014 – Final Reporttransformer.”
In March 2012, a “Second Criteria for Determination” was issued. This was followed by a review of thetarget standard value and a revision of JIS in 2014. This led to the start of a changeover to the “Top-RunnerTransformer 2014” that achieved the “Second Criteria for Determination” in April 2014. Japan’s top-runnerreference value is ranked top among leading countries in this field. The introduction of Japanese products
contributes to GHG reduction so that its selection brings significant benefits.
b) Current market conditions, competitive products, etc. in host country
Pumps
The study was conducted on the pumps used at 4 WTPs operated by the PPWSA. It was discovered that mostof the pumps were made by Kubota (Japan). Some of the others were made by Ebara Corporation (Japan)
and Peme Gourdin (Algeria). A hearing with the local suppliers confirmed that pumps made by Tsurumi
Manufacturing (Japan) and Grundfos (Denmark) are used in WTPs other than the PPWSA’s described above.
Statistical data on market share, etc. could not be confirmed.
Inverters
Inverters are designed to control the speed of pumps to achieve energy saving by reducing pressure loss.
They are advantageous because water service tower equipment becomes unnecessary when inverters are used.
Most inverters for large pumps in WTPs are made by manufacturers other than pump manufacturers. Among
the WTPs operated by the PPWSA, the Niroth and Chroy Changwar WTPs have introduced inverter-control
systems. Systems at both WTPs were built with ODA assistance from the Japanese and French Governments,
and the inverters were produced by ABB (Switzerland). Almost none of the other Cambodian WTPs havemade the switch to inverter-control systems with their pumps.
In the future, demand for inverter-controlled pumps is expected to increase for water supply in the buildings
with the recent construction boom in the Phnom Penh Municipality.
Transformers
The transformers installed at 3 WTPs operated by the PPWSA were studied. It was learned that the highest
number of transformers were made by ABB (Switzerland), followed by those made by Takaoka Electric Mfg(Japan), Thibidi (Vietnam), Alstom (France), and Minel-Trafo Mladenovac (Yugoslavia). In a hearing
conducted with the suppliers, it was learned that transformers made by Tira Thai and Precise (both Thailand)
and Thibidi were introduced in most cases because they are inexpensive. It was not confirmed whether or notthere is any statistical data on market shares of transformer manufacturers.
In Cambodia, introducing extra-high voltage transformers connected to the grid requires the approval of EDC(Electricité du Cambodge). The EDC’s transformer procurement specification designates transformers madeby ABB, Schneider Electric (France), GE (US), and Thibidi. A hearing with EDC confirmed that ABB-madetransformer has been introduced most among the EDC-approved transformers.
4) MRV structure
The study on MRV structure was performed for the project target WTPs operated by the PPWSA: the Phum
Prek WTP and the Chamkar Mon WTP. At present, the person in charge of monitoring is undertaking
measurement and recording of electric power consumption, current values, distribution pump flow rates andtransformers, which are necessary to calculate GHG emission reductions. Both the measurements and thecalculation results are checked and approved by both the monitoring manager and JCM Project General

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JCM Project Planning Study (PS) 2014 – Final ReportManager (see figure below). When this project is implemented, a part of monitoring items necessary forcalculation of GHG emission reduction and the calculation of GHG emission reduction will be added to theexisting monitoring work. It was confirmed that the existing structure may be applied as it is for
implementation of the project.
The CO2 emission factor of a grid is necessary for the calculation of GHG emission reductions. The factor
released by the Ministry of Environment (MOE) of Cambodia for the Phnom Penh area is used. The latest
version, which was released in 2010, is scheduled to be updated in early 2015. The factor is updated every 3
or 4 years, and the person in charge of monitoring must collect the latest data as required.
As for the present state of recording and storage of collected data, the person in charge on site writes it byhand and stores it in a paper-based control table. Some of the data is entered in a PC for electronization. Thisis confirmed by superiors. There are problems with, this procedure, however. For example, the data in thecontrol table is written in the Khmer language and could not be checked by the study team, who does notunderstand the Khmer. Essential portions will be translated into English when the project is implemented.
The MRV structure is shown in Figure 1 below.

Figure 1. The MRV Implementation System
5) Environmental integrity and Sustainable development in host country
This project, whose implementing body is the PPWSA, is intended to save electricity by improving
efficiency in the operation of water supply equipment at the Phum Prek WTP and the Chamkar Mon WTP in
the Phnom Penh Municipality of Cambodia. This will result in reductions of GHG emissions. The targetedwater-supply equipment is mainly the electricity receiving equipment and pumps. Most of them, particularly
those planned and built in the 1990s, are aging. Upgrading the equipment will result in improvement of theperformance.
Principal environment-related laws and regulations of Cambodia include the Law on Environmental
Protection and Natural Resources Management promulgated in 1996. Other more specific laws include the
Sub-Decree on Management of Solid Waste (1999), Sub-Decree on the Water Pollution Control (1999), and

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JCM Project Planning Study (PS) 2014 – Final Report

Sub-Decree on the Control of Air Pokkution and Noise Disturbance (2000). For evaluation of environmental
impact, the Sub-Decree on the Implementation of the Environmental Impact Assessment Process was
enforced in 1999, which specifies the type, contents, and scale of projects requiring an environmental impact
evaluation. As it pertains to the water supply business, this ordinance covers water-supply development
projects for 10,000 persons or more per day.
This project is intended to achieve energy saving and GHG emission reduction through upgrading andimprovement of the equipment in the current PPWSA water supply business. It is not a project requiring a
study of the environmental impact. Therefore, there is no need to obtain a license or permission for anenvironmental impact evaluation in the course of project implementation. A local hearing confirmed that
implementation of a new environmental-impact study was not necessary.
This project will demonstrate positive benefits in terms of the environment, such as GHG emission reduction.
The measures to secure favorable environmental effects and to avoid adverse effects during implementationof this project are as follows:
Securing favorable effects
This project will contribute to the promotion of Cambodia’s basic policies on water supply and healthannounced by the Government in 2003: “To ensure that all citizens are able to receive safe water, to havesanitary facilities, and to enjoy a safe and healthy living environment well adapted to the naturalenvironment.” Energy saving will also contribute to reducing city water production costs, which in turn will
help improve civil life by supplying city water at a lower cost.
Avoiding adverse effects
This project will involve upgrading equipment at WIPs and WTPs. Since the major part of the work will bedone on the sites of the WIPs and WTPs, negative effects accompanying the work, such as noise andvibration, will be restricted to the plant areas. It is also possible to minimize waste generation in the form ofold pieces of equipment being replaced by taking such measures as storing and utilizing them throughrefurbishing as reserve equipment. When their disposal becomes necessary, they should be disposed of as
industrial waste under control of the Department of Public Works and Transport (DPWT).
6) Toward project realization (planned schedule and possible obstacles to be overcome)(2) JCM methodology development
In this study, the JCM methodology was reviewed in terms of 3 energy-saving approaches as outlined below.
A

Energy Saving by Introducing Inverter-control
Systems to Pumps

Controlling motor speeds by adding inverters

B

Reduction of Electricity Transmission Lossbetween WTPs and WIPs

Changing power reception system at WIPs todirect reception from the grid

C

Energy Saving by Introducing High-Efficiency
Electric Transformers

Upgrading transformers to high-efficiency type1) Eligibility criteria
A. Energy saving by introducing inverter-control systems to pumps
It is assumed that the methodology related to energy-saving through introducing inverter-control systems
to pumps, as developed in this study, is applied to the project that meet all of criteria below.

Criterion 1

A project which introduces an inverter-control system to pumps without
an inverter-control system.
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JCM Project Planning Study (PS) 2014 – Final Report

Criterion 2

The capacity of project pump motors is more than 100 kW.

Criterion 3

The rated electricity conversion efficiency is more than 97% and rated
power factor is more than 95% of a high-voltage inverter.

Criterion 4

Periodical check is planned to perform more than 2 times annually.

Reason for Criterion 1:
This criterion was set by taking into account the following situation. Substantial energy-saving is expectedfrom introducing the inverter-control systems to pumps without the system, thereby controlling the motor
speed depending on the supply flow. On the other hand, if pumps already have an inverter-control system,
replacing such system with a new one can achieve limited energy savings.
Reason for Criterion 2:
Pump performance characteristics vary depending on the capacity of the pump and its motor (pump’s
source of motive power). Generally, efficiency increases with equipment size. The numerical value was set
by selecting the project pump on the basis of a study on the pump capacity at the 4 WTPs operated by the
PPWSA.
Reason for Criterion 3:
Japan is in a leading position in technological development of inverters. This numerical value was set forthe purpose of enhancing the GHG emission reduction effect by introducing higher-efficiency Japan-madeequipment. Currently, there is no standard to prescribe how to calculate the efficiency and power factor.
Reason for Criterion 4:
Regular inspections are essential to sustain GHG emission reduction effects through the introduction of
inverter-control systems to pumps. This numerical value was set after confirming the frequency of regularinspections with the inverter manufacturer.
B.

Reduction of electricity transmission loss between WTPs and WIPs
It is assumed that the methodology related to reducing electricity transmission loss between WTPs andWIPs, as developed in this study, is applied to the project that meets all of the criteria outlined below.

Criterion 1

A project which changes the electricity receiving system which transmits
electricity from water treatment plants to water intake plants via privatetransmission cables to individual electricity receiving system.

Reason for Criterion 1:
This methodology is applicable to WIPs that receive electricity from WTPs via an independenttransmission system provided between these plants. This type of transmission system has been employedbecause, in case of power failure, it is necessary to transmit to WIP the electricity generated by a captive
power generator provided in the WTP. However, in recent years, the frequency of operating the captive
power generator (mainly a diesel generator) has decreased because the frequency of power failure has
decreased due to stabilization of the grid and a steep rise in fuel costs. In other words, the necessity of theexisting transmission system is decreasing.
This project is designed to reduce GHG emissions by reducing transmission loss by changing the power

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JCM Project Planning Study (PS) 2014 – Final Report

reception method to direct reception from the grid. Therefore, the criterion of this methodology wasdescribed as “a project which changes the electricity receiving system to individual electricity receiving
system.”C. Energy saving by introducing high-efficiency transformers
It is assumed that the methodology related to the introduction of high-efficiency transformers, asdeveloped in this study, is applied to the project. It meets all of the criteria indicated below.

Criterion 1

Capacity of project transformers is between 500kVA and 1,000kVA.

Criterion 2

The rated efficiency of project transformers is at least 98.5%.

Reason for Criterion 1:
Generally, transformer efficiency is higher when the equipment is larger. The transformers covered by thisproject were selected and the numerical values were set with reference to the transformers the PPWSA has
for its WTPs.
Reason for Criterion 2:
A study was made of the transformers at 3 WTPs operated by the PPWSA and the transformer efficiencyof manufacturers as recommended by the electric power company, EDC, of Cambodia. A relationship wasestablished between transformer capacity and efficiency. Then, the reference efficiency was determinedwithin the range of transformer capacity to be upgraded in this project. The transformers to be connectedto the Cambodia grid must be those made by manufacturers recommended by EDC, and they must comply
with the specifications designated by EDC.
After studying the Japan-made transformers planned to be introduced in this project, numerical values
superior to the reference efficiency was set. Thanks to the transformer top-runner system, the efficiency ofJapan-made transformers is at the world’s highest level. This numerical value was set to further increase
GHG emission reductions through the introduction of transformers made by Japanese companies. The
methodology to calculate the efficiency is prescribed in JIS C 4306.

2) Calculation of GHG emissions (including reference and project emissions)

A. Energy saving by introducing inverter-control system to pumps
In this methodology, the difference between the reference and project emissions is assumed to be the GHG
emission reduction achieved by implementing this project. It is calculated as follows:
ERp ＝ REp – PEp
ERp: Emission reduction [tCO2/p]
REp: Reference emissions during a given period p [tCO2/p]
PEp: Project emissions during a given period p [tCO2/p]
In Cambodia, inverter-control systems have been introduced to only a few pumps in the WTPs operated by
the PPWSA. Since these pumps were installed with Japanese and French ODA, the BAU scenario in
Cambodia in which pumps without the inverter control system is appropriate.
The reference emission is calculated as the product of the electricity consumption of project pump

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JCM Project Planning Study (PS) 2014 – Final Reportmultiplied by the proportion of electricity consumption of the reference pump relative to that of project
pump and the emission factor of electricity consumed by the pump.
To calculate the reference emission, the reference pump was set as one whose electricity consumption ismore conservative than the case of using the pump without an inverter-control system in the BAU scenario.
Specifically, the pumps of 4 PPWSA WTPs were studied and the PREF,LF,p of the following equation comeson the conservative side relative to BAU. The PPWSA is an agency with the most efficient WTPs in
Cambodia, so that they are considered adequate as the reference target.
REp = {ECPJ, p * (PREF,LF,p / PPJ,LF,p)}* EFgrid
REp: Reference emissions during a given period p [tCO2/p]
ECPJ, p: Amount of electricity consumed by project pumps during a given period p [MWh/p]
LF: Operation load factor (flow rate) of project pumps [-]PREF,LF,p: Electricity consumption ratio of reference pumps at LF [-]PPJ,LF,p: Electricity consumption ratio of project pumps at LF[-]

EFgrid: CO2 emission factor of a grid [tCO2/MWh]
The project emission is calculated as the product of the electricity consumption of project pump multipliedby the emission factor electricity consumed by the pump.

PEp = ECPJ, p * EFgrid
PEp: Project emissions during a given period p [tCO2/p]
ECPJ, p: Amount of electricity consumed by project pumps during a given period p [MWh/p]

B.

Reduction of electricity transmission loss between WTPs and WIPs
In this methodology, the difference between reference and project emissions is assumed to be the GHG
emission reduction achieved by implementing this project. It is calculated as follows:
ERp ＝ REp – PEp
ERp: Emission reduction [tCO2/p]
REp: Reference emissions during a given period p [tCO2/p]
PEp: Project emissions during a given period p [tCO2/p]
A hearing with the responsible persons at WTPs in Cambodia and confirmation of the drawings showedthat there was no case of reducing transmission loss by changing to an individual electricity reception
method as dealt with in this methodology. Accordingly, the adequate scenario to be used as the BAU
scenario in Cambodia is to continue the use of the existing transmission system with an independent line
to WIPs.
The reference emission is calculated as the product of the power loss at the transformer and transmissionline, which are part of equipment put out of use because of change of the existing reference electricity
receiving system to the project system of an individual receiving type, multiplied by the grid emission

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JCM Project Planning Study (PS) 2014 – Final Reportfactor. Note that this methodology sets, as a reference, systems unique to the Phum Prek WTP and the
Chamkar Mon WTP.
[PP WTP]REp = (ELREF,1,p + ELREF,2,p) * EFgrid[CC WTP]REp = (ELREF,3,p + ELREF,4,p + ELREF,5,p) * EFgrid
REp: Reference emissions during a given period p [tCO2/p]
ELREF,1,p, ELREF,2,p, ELREF,3,p, ELREF,4,p, ELREF,5,p:

Amount of electricity transmission loss of parts of reference electricity receiving system
during a given period p [MWh/p]
EFgrid: CO2 emission factor of a grid [tCO2/MWh]In this methodology, the project emission is set to zero so that the GHG emission reduction due to project
implementation is calculated from the transmission loss at a part of the reference electricity receiving
system that is put out of use after the project.

PEp = ELPJ, p * EFgrid
PEp: Project emissions during a given period p [tCO2/p]
ELPJ, p: 0 MWh/p
EFgrid: CO2 emission factor of a grid [tCO2/MWh]

C. Energy saving by introducing high-efficiency transformers
In this methodology, the difference between reference and project emissions is assumed to be the GHG
emission reduction achieved by implementing this project. It is calculated as follows:
ERp ＝ REp – PEp
ERp: Emission reduction [tCO2/p]
REp: Reference emissions during a given period p [tCO2/p]
PEp: Project emissions during a given period p [tCO2/p]
As the transformers are not replaced very often in Cambodia as in the case of Japan, the adequate BAU
scenario to be employed is one in which the existing transformer continues to be used during theequipment upgrade process. A transformer which has one of the largest market shares is introduced in thecase of a new introduction project. The reference emission is kept conservative by assuming the
introduction of a transformer with efficiency higher than BAU. The reference emission is calculated asfollows:
REp = {ETPJ, 2, p * (1 /ηREF – 1)} * EFgrid
REp: Reference emissions during a given period p [tCO2/p]
ETPJ, 2, p: Amount of transformed electricity at the secondary side of project transformers

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JCM Project Planning Study (PS) 2014 – Final Reportduring a given period p [MWh/p]
ηREF: Electricity transformation efficiency of reference transformers [-]EFgrid: CO2 emission factor of a grid [tCO2/MWh]
The project emission is calculated as the product of the transformation loss with the introduced projecttransformer multiplied by the emission factor of electricity to be transformed. The transformation loss ofproject transformer is calculated as a difference of electric energy between primary and secondary sides.
PEp = (ETPJ,1,p – ETPJ,2,p ) * EFgrid
PEp: Project emissions during a given period p [tCO2/p]
ETPJ,1,p: Amount of transformed electricity at the primary side of project transformers

during a given period p [MWh/p]
ETPJ,2,p: Amount of transformed electricity at the secondary side of project transformers

during a given period p [MWh/p]3) Data and parameters fixed ex ante

A. Energy saving by introducing inverter-control system to pumps
In this methodology, either preset or default values are used for the following:
1. Performance curve of reference pump
2. Performance curve of project pump
3. Rated electricity consumption of project pumps per hour
4. CO2 emission factor of a grid
1. After reviewing the test data of six types of pumps introduced at 4 PPWSA WTPs the performance
curve of the reference pump was set in such a manner as to ensure that GHG emission is kept on theconservative side.
2. Manufacturers’ test data will be used for the performance of project pump.
3. Manufacturers’ designated value will be used for the rated electricity consumption of project pumps perhour.
4. For the grid emission factor, the factor at the Phnom Penh grid is made public by the Climate Change
Department, the MOE, and renewed every few years. (At the time this report was submitted, the 2010
edition was the latest one.) The numerical value of this factor is determined by calculating the weighted
average of the output (made public by EDC in its annual report for each type of power structure (heavy oil,gas oil, hydraulic power, woody biomass, coal, import) of the grid located in Cambodia) and the electricity
emission factor by fuel in OECD countries as made public by the International Energy Agency (IEA).
B.

Reduction of transmission loss between WTP and WIP
In this methodology, either preset or default values are used for the following:
1. Transmission loss at the transformers and transmission lines provided in the reference electricity
receiving system between WTPs and WIPs that are put out of use due to implementation of the

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JCM Project Planning Study (PS) 2014 – Final Reportproject
2. CO2 emission factor of a grid
1. In regard to the transmission loss at the transformers and transmission lines put out of use due to
implementation of the project, the Phum Prek WTP and the Chamkar Mon WTP covered by the project
were checked to identify such transformer and transmission lines and the transmission loss determined forthem was set as default. Specifically, the measured values at the Phum Prek WTP were used as a basis todetermine the transmission loss at the Phum Prek WTP. Similarly, the measured values at the Phum Prek
WTP were used to estimate the transmission loss at Chamkar Mon WTP. The transmission loss oftransformers at the Chamker Mon WTP was estimated based on monitored data of the existing transformer
at Phum Prek WTP.
2. The CO2 emission factor of a grid is the same as in Methodology A.
C. Energy saving by introducing high-efficiency transformers
In this methodology, either preset or default values are used for the following:
1. Transformation efficiency of reference transformer
2. CO2 emission factor of a grid
1. The transformation efficiency of the reference transformer was determined in such a manner that the
GHG emission reduction could be kept on the conservative side of the BAU scenario. For this purpose, astudy was made of the transformers introduced at 3 PPWSA WTPs and the transformer efficiency
information provided by manufacturers recommended by EDC.
2. The CO2 emission factor of a grid is the same as in Methodology A.
(3) Development of JCM Project Design Document (PDD)
1) Environmental impact assessment
The PPWSA is undertaking planned upgrading of equipment by maintenance so as to ensure a stable watersupply.
This project can be categorized as a normal equipment upgrading project when viewed in terms of its scale.
In the hearing with PPWSA responsible persons, it was confirmed that no environmental impact assessment
had been performed in line with the work and that no guidance had been provided by the competentauthorities.
It is concluded that this project does not require an environmental impact assessment because it is intended tosave energy and reduce GHG emissions by upgrading and improving equipment in the PPWSA’s watersupply business.
Though the negative effects due to the work are restricted, planned management should be conducted withcare and any generated wastes must be minimized, including reuse and recycling.
2) Local stakeholder consultation
The activities to be undertaken in this project are replacement of existing equipment or installation of new
equipment within the sites of the PPWSA plants. There appears to be no legal regulations demanding
explanation or exchange of opinions to/with the surrounding residents.
For this project, a committee meeting was held in October and December 2014, in which project members

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JCM Project Planning Study (PS) 2014 – Final Reportprovided an outline of the project and explanations on the progress and results of the study. The MOE, theMIH, and the PPWSA expressed their expectations of the GHG emission reduction project and raisedquestions on how Cambodia would benefit from it. They also asked for explanations of reference concepts
related to the MRV methodology. An active exchange of opinions focusing on these issues took place. Someof the comments presented are shown below. It is evident that Cambodia has great expectations for GHG
reduction.

Stakeholders

RelationshipComments received

Ministry

Government

We understand that successful completion of JCM projectsofagencies withcould lead to lower electricity consumption and related costs,

Environment,

jurisdiction overand reduced CO2 emissions. From the viewpoint of reducing

Cambodiaenvironmental

CO2, it is expected that the PPWSA will participate in this(MOE)

policies

project.

Ministry

Government

It is understood that this project offers return effect onof Industry andagencies withinvestment and also GHG emission reduction effects. As GHG

Handicraft,

jurisdiction overemission reduction is in line with the policy of Cambodia, we

Cambodiawater supply

would like to support the realization of the project.

(MIH)

projects

Phnom PenhCounterpart

The fact that this will lead to lower electricity charges andWater Supply

reduced GHG emissions is extremely important. We appreciate

Authority

the efforts to reduce GHG emissions in Cambodia. The(PPWSA)

contents of the proposal are promising from the viewpoint ofproject profitability.

3) Monitoring plan
In this project, the monitoring items proposed for the WTPs are as follows:

A. Energy saving by introducing inverter-control systems for pumps
1. Amount of electricity consumed by project pumps or the electric current of those pumps.

(at the primary side of inverter)

B. Reduction of transmission loss between WTPs and WIPs
None

C. Energy savings achieved by introducing high-efficiency transformers
1. Amount of transformed electricity at the primary side of electric transformers.
(Measured at the nearest circuit breaker to the primary side)
2. Amount of transformed electricity at the secondary side of electric transformers.
(Measured at the nearest circuit breaker to the secondary side)

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JCM Project Planning Study (PS) 2014 – Final Report

At present, in WTPs current values, discharge pressure, and discharge flow rates are measured every hourand entered manually in a log book. This is a daily check related to the pumps. On the other hand,measurement is made daily on the primary side of extra-high voltage transformers (power received from thegrid). However, no measurement is made on the secondary side. Also, only some of the data thus obtained
are converted to electronic form. Confirmation was made with the PPWSA that, during implementation of
the project, additional measuring equipment related to monitoring items needed to calculate GHG emission
reductions should be installed, and that, after development of the rules and procedures, all of the monitoring
items should be converted to electronic form.
Once these monitoring items are prepared, GHG emission reductions can be calculated according to theapproved methodology. A system allowing automatic calculation by entering monitoring items in a
spreadsheet will be established after implementation of the project. Lectures on the GHG emission reduction
calculation method were provided to the PPWSA in the course of a second and third field study.
4) Calibration of measuring instruments
A hearing with the PPWSA was held to determine whether or not calibration exists for the measuring
equipment needed for all monitoring items. It was found out no calibration has been performed at all and its
necessity has not been recognized. Besides, legal regulations stipulating calibration of measuring equipment
could not be confirmed. EDC is said to undertake calibration of the equipment used to measure the powerreceived on the primary-side of extra-high voltage transformers connected to the grid, which is in thepossession of the EDC. It should be noted that the accuracy of EDC’s measuring equipment complies with
the IEC (International Electro-technical Commission) standards.

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