Hainan Gezhen Hydropower Project

Audit Analysis

The Hainan Gezhen Hydropower Project is a small-scale CDM hydro project with VVB-confirmed additionality via an investment test, but the validation process surfaced nine material findings including IRR sensitivity near the benchmark and baseline calculation errors. Multiple contradictions between the PDD, validation report, and monitoring report (baseline method, leakage justification, ERR figures, and crediting period dates) reduce confidence in the data record. The project is a straightforward grid-displacement hydro scheme with reasonable leakage treatment, but the CDM-era documentation and sensitivity of the additionality case limit overall quality.

Project Description

Red Flags

• ⚠IRR sensitivity analysis showed the project's internal rate of return approaching the benchmark with only a 10% variation in tariff or investment, weakening the additionality case (validation report, 2011).
• ⚠Nine material findings were raised at validation, including an ecological flow value in the PDD inconsistent with the EIA, an unexplained decrease in annual power generation in the IRR calculation, and missing descriptions of meter installation, corrective action procedures, and data archiving.
• ⚠The baseline method is described as 'project-specific' in the monitoring report but 'jurisdictional' in the PDD — an unresolved contradiction that affects the credibility of the baseline calculation.
• ⚠The grid emission factor is from 2008 and no baseline reassessment date is recorded in the available documents.

Credit Vintages