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Environmental classification and rationale
The project was screened B/1, requiring an Environmental Audit and
Environmental Analysis in line with the Bank's Environmental Policy and Public
Information Policy. The modernization of existing power units focusing mainly
on improvising energy efficiency and operational control is associated with a
number of environmental issues, which can be readily identified, assessed and
mitigated as part of an Environmental Analysis.
An Environmental Audit and Analysis was undertaken by an independent
consultant.
Key environmental issues and mitigation
The key environmental
issues are air emissions (i.e. NOx) from the mainly gas fired units (92% of
used fuel is gas). As a result of ongoing investment programmes the Company
has achieved significant NOx emission reductions with emission down from 151
kT in 1993 to 67 kT in 2004. The investment programme will further reduce
emissions by 2010. It should be noted that the share of the power utilities is
approximately 5% of all emission in the atmosphere of the Moscow area.
Overall emissions from the plant are not judged as a having a significant
adverse impact due to the nature of fuel mix, a lot of environmental measures
and sites location. The planned modernization will also upgrade existing
boilers inclusive of the existing primary NOx control systems and the
installation of low NOx burners.
The plants are subject to regulatory control and all plants have valid
permits. Russian air quality standards, notably for SO2 and NOx are
substantially more stringent than comparable European Union standards. The
investment programme is aimed at ensuring compliance with Russian air quality
standards and is structured to meet EU environmental standards. The Company
will undertake a Best Available Techniques (BAT) assessment of operations in
the future to further assess investment needs.
Greenhouse gas (GHG) emissions are currently around 50 mln t/yr. A GHG
strategy will be developed in the future as part of the EMS to take account of
the planned increase in the demand of electricity in the Moscow region.
Water use is a significant aspect of the plants operations. The planned
investment programme aims to improve quality and reduce quantity of sewage
from the plants.
The operations are not associated with significant waste disposal problems due
to the nature of the fuel used. However, some hazardous and non hazardous
waste needs to be located and utilized in licensed landfills. As part of
developing a formalised environmental management system this will be addressed
to reduce environmental and human risk.
Contaminated land control regularly take place according to the schedule by
means of observations and analysis of groundwater from the net of piezometric
stations at the CHPs.
Asbestos containing materials are not used at the plants now, but exist at
some non-refurbished equipment and the investment programme will include the
development of an asbestos management plan to address this issue.
Part of the investment programme is aimed at introduced a formalised
environmental, health and safety management system and continuous monitoring
at all 17 plants is to be undertaken by 2012. This will allow for further
strengthening of the current environmental, health and safety management
system at the Company in line with best international practice.
Environmental opportunities
The proposed project is expected to
bring significant environmental benefits as the upgraded plant will have a
higher overall efficiency and substantial improvement will be made to the
environmental management and operation of the plant. Future investments may
result in the potential for JI and CDM projects.
Summary of Environmental Action Plan
The company will be required to adhere to Russian environmental, health and
safety regulations and EU environmental standards. All relevant permits will
need to be obtained during the modernization period.
An Environmental Action Plan (EAP) has been developed and agreed with the
Company based on the results of due diligence. The EAP will address, inter
alia, air emission control; need for continuous air monitoring systems;
asbestos management; house keeping, and the overall management of the
environment, health and safety issues at the power plant and associated
auxiliary operations. An environmental management system incorporating all
operational units will be developed by 2012.
The following upgrades are planned:
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Upgrade of boilers including installation of low NOx burners;
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Upgrade of wastewater treatment facilities;
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Noise reduction measures, and
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Improvements in cooling tower operation in order to reduce vapour emissions.
Disclosure of information and consultation
In the context of
the EBRD's participation in the project, the Company has released locally a
summary of relevant environmental issues associated with the project and
summarise mitigation measures, action plans and other initiatives agreed.
Monitoring and reporting
The Company will continue to monitor
the environmental impact of its operations in accordance with national law and
regulations. The Bank will evaluate the project's compliance with the
applicable environmental and social requirements during the lifetime of the
project by reviewing annual environmental reports prepared for the project.
This will include:
(i) ongoing performance of project-specific environmental, health and safety
activities as reflected in the results of periodic and quantitative sampling
and measuring programmes, and
(ii) the status of implementation of environmental mitigation and improvement
measures. The Bank's representatives will also conduct periodic site
supervision visits when deemed appropriate.
If required, the Bank will carry out monitoring visits to the Company.
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