The Project Entity plans to recover the waste heat from the cement kilns of Chifeng Yuanhang Cement Co., Ltd. and build waste heat recovery (WHR) power station to supply electricity for cement production, which can further reduce cost and the environmental pollution of cement furnace flue gas. Whilst the installation of waste heat-based generation facilities at cement plants is strongly encouraged in national policies and regulations, there are no laws requiring installation as such. Chifeng Yuanhang Cement Co., Ltd was established in 2000 after transferred from the Chifeng First Cement Factory. According to the Chinese industrial policy and cement industry distribution programme of Inner Mongolia Autonomous Region, the Project Entity built a 2,500 t/d NSP clinker production line in the first phase, and it put into trail operation in September, 2004. With the development of the company, the second 2,500 t/d NSP clinker production line has begun to build. The waste heat carrying gas has been directly vented to the atmosphere prior to the implementation of this project. The baseline scenario is the same as the scenario existing prior to the start of implementation of the project activity. The Project recovers the low temperature waste heat from the existing 2,500 t/d NSP clinker production line and the 2,500 t/d NSP clinker production line under construction to generate electricity. Waste heat contained in the waste gas from the coolers at kiln-heads and the preheaters at kiln end of both 2,500 t/d NSP clinker production lines is recovered by waste boilers to produce super-heated steam at low pressure to generate electricity; the installed capacity of each generator is 4.5 MW for a total installed capacity of 9 MW, and the generation power for each generator is 4,317 KW. The power generation of the project activity is connected to the grid but cannot be exported to the grid, and is used for own demand. It displaces the same amount of the electricity purchased from Northern China Grid, thus avoiding greenhouse gas emissions from the business-as-usual scenario electricity generation of those fossil fuel fired power plants connected into Northern China Grid. The Project Boundary includes the two kilns generating the waste heat, the heat recovery boilers, the electricity generator units and their associated auxiliary facilities, and all power plants connected to the Northern China Power Grid. The feasibility study of the first phase project was executed at April 2007 and the feasibility study of the second phase was finished at July 2008. The construction of the two waste heat recovery power stations was started simultaneously at March 2009, and they will be put into operation by January 2010. The estimated annual power generation of WHR power stations is 60,438 MWh; the estimated annual energy output of WHR power station is 55,603 MWh. The electricity self-sufficiency rate of the factory will increase to over 30%. It is estimated that the project activity will generate an annual GHG emission reduction of 49,684 tones CO2 equivalent by displacing the same amount of the electricity purchased from Northern China Grid, about 496,840 tCO2e over the 10-year crediting period. The Project will contribute to sustainable development in the following ways:

1. The power generation of the project activity will displace the same amount of the electricity purchased from Northern China Grid which mostly uses fossil fuel sources for it, which can increase the channel of power supply, and relieve the pressure on power supply and demand; the project also reduce the consumption of electrical coal, and decrease reliance on imported fossil fuels, which will

contribute to increasing China’s energy security.

2. The project activity will also improve local air quality as it will reduce the emissions of SO2 and NOx associated with fossil fuel use, reduce the thermal pollution in atmosphere through recovering the heat by lowering the temperature of the waste flue gas, and will lead to a reduction in the amount of dust in the stack gas from the cement plant. It will greatly improve the quality of local environment.
3. The Project Activity will lead to the creation of new job opportunities for local people during the construction and operation period of the Project, and many workers will receive the professional technician training in cement WHR power generation.
4. The Project Activity will reduce energy consumption and energy cost, create more economic benefits to enterprises, as well as reduce environmental pollution, accord with the demands of the sustainable development of the cement plant. Construction of the project, therefore, it conforms to national industrial policies for energy saving and clean production, and meets the circular economy development concept outlined by the Chinese government.