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RETScreen® Software Online User Manual
required can range between 10 and 100. As a rule-of-thumb, the cost of the preliminary design
should be about 0.3% of the total project cost.
Detailed cost estimate
The detailed cost estimate for the proposed small hydro project is based on the results of the
preliminary design and other investigations carried out during the feasibility study. The cost of
preparing the detailed cost estimate is calculated based on an estimate of the time required by
experts to complete the necessary work.
Engineering services for completing a detailed small hydro cost estimate will range between $200
and $800 per person-day. The number of person-days required to complete the cost estimate will
range between 5 and 50 depending on the size of the project and acceptable level of risk. As a
rule-of-thumb, the cost of the cost estimate should be about 0.3% of the total project cost.
GHG baseline study and monitoring plan
In order for the greenhouse gas (GHG) emissions reductions generated from a project to be
recognised and sold on domestic or international carbon markets, several project documents need
to be developed, the key elements of which are a GHG baseline study and a Monitoring Plan
(MP). A GHG baseline study identifies and justifies a credible project baseline based on the
review of relevant information such as grid expansion plans, dispatch models, fuel use on the
margin, current fuel consumption patterns and emissions factors. The GHG baseline study sets a
project boundary and identifies all sources of GHG emissions that would have occurred under the
baseline scenario, i.e. the scenario most likely to have occurred if the project were not
implemented. A Monitoring Plan identifies the data that needs to be collected in order to monitor
and verify the emissions reductions resulting from the project and describes a methodology for
quantifying these reductions as measured against the project baseline.
An outside consultant or team is often called in to develop the baseline study and monitoring
plan. However, as more project examples become available and standardised methodologies are
accepted, these studies may be more easily carried out by project proponents. Costs will depend
on the complexity of the baseline, the size of the project and the availability of sectoral or
regional baselines and standardised monitoring methodologies. Costs for developing baseline
studies and monitoring plans for large projects have ranged from $US 30,000- $US 40,000
according to analysis by the Prototype Carbon Fund (PCF).
Requirements for Clean Development Mechanism (CDM) projects are generally more stringent
than for Joint Implementation (JI) or other projects. For example, CDM projects must also be
monitored for their contribution to sustainable development of the host country. The rules
governing baselines and monitoring for CDM can be found at UNFCCC's CDM Website. Note
that for small-scale projects (renewable energy electricity projects with a capacity of 15 MW or
less), it might not be necessary to carry out a full baseline study as simplified baselines and
monitoring methodologies are available.
Note: The optional GHG Analysis worksheet in RETScreen can be used to help prepare the
baseline study.
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