Environmental and Social Impact Assessment

Environmental and Social Impact Assessment

Executive Summary

For

URUMQI DISTRICT HEATING PROJECT

EA Center of the Xinjiang Uyghur Autonomous Region

February 2011

1

EXECUTIVE SUMMARY URUMQI DISTRICT HEATING PROJECT

TABLE OFCONTENT

1. INTRODUCTION

1.1 Project Background

1.2 Environmental Policies, Laws and Regulations

1.2.1 Laws and Regulations

1.2.2 Applicable Standards

1.3 Assessment Scope, Period and Key Issues

2. PROJECT DESCRIPTION

2.1 Project Composition

2.2 Heating Source

3. ENVIRONMENTAL BASELINE

3.1 Geographic and Climatic Condition

3.2 Surface Water Quality

3.3 Acoustic Environmental Quality

3.4 Ambient Air Quality

3.5 Current Status of Heating Service and Air Pollution Control

3.6 Respiratory Disease Status

3.7 Social and Economic Status

3.8 Key Environmentally Sensitive Receptors

4. ENVIRONMENTAL IMPACT ASSESSMENT

4.1 Impact Assessment in Construction Phase

4.2 Impact Assessment in Operation Phase

4.2.1Positive Impacts

4.2.2Negative Impacts

4.3 Indirect impacts from Closure of Small Boilers

5. DUE DELIGENCE REVIEW OF ASSOCIATED FACILITIES AND PROJECT ACTIVITIES IN 2010

5.1 Heating Sources

5.2 Emissions and Discharges of Heat Sources

5.3 Review of Project Activities Completed in 2010

6. ANALYSIS OF ALTERNATIVES

6.1 Comparison of ‘With’ and ‘Without’ project

6.2 Alternatives of Heating Technologies

6.3 Alternatives of Heating Fuels

7. PUBLIC CONSULTATION AND INFORMATION DISCLOSURE

7.1 Information Disclosure

7.2 Public Consultation

8 ENVIRONMENTAL MANAGEMENT PLAN

8.1 Institutional Arrangement and Supervision Mechanism

8.2 Mitigation Measures

8.3 Environmental Monitoring Plan

8.4Environmental training plan and reporting

9. CONCLUSIONS

1. INTRODUCTION

1.1 Project Background

The city of Urumqi, the capital of Xinjiang Uygur Autonomous Region in westernmost China, is experiencing rapid urbanization and economic growth, which poses challenges to Urumqi Municipal Government in providing adequate and efficient public services while cost-effectively controlling environmental pollution. Urumqi has been suffering serious air pollution in winter season, primarily caused byintensive use of coal in industrial sector and space heating.

In order toimprove air quality, the Urumqi Municipal Government has proposeda series of initiatives for clean air in the city. The Urban Heating Plan (the “Plan” hereafter)is one of the action plans among the initiatives, which calls for promoting expanded use of CHPsand larger district heating networks to replace those smaller heatingnetworks, and phased adoption of natural gas to replace coal. This project consists of construction and rehabilitation of district heating system supplied by CHP in two urban districts of Urumqi.This project is an integral part of the Plan and has been proposed by Urumqi Municipal Government for partial financing fromthe World Bank (WB).

This project has been classified into Category A according to the WB safeguard policy requirements.An Environment Assessment (EA) was conducted for each physical component by the EA Center of the Xinjiang Uyghur Autonomous Region. A Social Impact Assessment (SIA) has been prepared by Xinjiang Social and Science Academy Institute for this project.This document is a summary of the EAand the SIA document.

1.2 Environmental Policies, Laws and Regulations

1.2.1Laws and Regulations

The basis of the EIA Reports includesnational and localenvironmental laws, regulations, policies, and the World Bank’s environmental and social safeguard policies. The main applicable laws and regulations include:

Environmental Protection law of the People’s Republic of China, 1989

The Law on the Prevention and Control of Atmospheric Pollution, 2000

The Law on Prevention and Control of Water Pollution, 2008

The Law on Prevention and Control of Pollution From Environmental Noise, 1996

The Law on Environmental Impact Assessment, 2003

Technical Guideline for Environmental Impact Assessment; andvarious applicable standards for air, water, and noise.

1.2.2 Applicable Standards

The most important assessment criteria and environmental quality standards are the Ambient Air Quality Standard (see Table 1-1) which classifies the air quality into three classes for areas zoned for different functions, as follows:

Class I: applicable to natural reserves, sceneryspots or other sites requiring special protection;

Class II: applicable to residential areas, composite areas for residential and commercial activities, normal industrial and rural areas; and

Class III: applicable to special designated industrial zones.

Table 1-1 Ambient Air Quality Standard (GB3095-96) Unit: mg/m3

Table 1-2Other Applicable Standards

In addition, World Bank safeguard policyOP 4.01 Environmental Assessment has been triggered and applied in the EIA process and incorporated in EIA reports. As all of the proposed substations will be constructed within the site boundary of the existing boiler plants or the state-owned land, no permanent acquisition of collective-owned land is needed; the proposed pipelines will be constructed under roads, no need for temporary land occupation. The safeguard policy OP 4.12 Involuntary Resettlement is triggered because of the possibility of modification of pipeline alignment that would require land occupation and/or resettlement.

1.3 Assessment Scope, Period and Key Issues

The scope and key objects of environmental assessment are shown in Table 1-3.

Table 1-3 Assessment Scope

2. PROJECT DESCRIPTION

2.1Project Composition

The project is intended to connect consumers to district heating services with improved energy efficiency and environmental performance in two districts, Shayibake, Shuimogou and small part of Tianshan Districtin Urumqi (see Figure 1). The constituents of the project are summarized in Table 2-1 below.

Table 2-1Project Description

2.2Heating Source

Two existing CHPs will supply heat to the project networks with peak load to be satisfied by three existing heat-only boilers(HOB), all using coal-firing boilers. A Due Diligence Review was carried out for these heating sources during the EA preparation and the main conclusion is that these facilities are compliant with national and local emission standards as well as with those of the WB/IFC Environmental Health and Safety (EHS) guidelines, as described inChapter 8.

3. ENVIRONMENTAL BASELINE

3.1Geographic and Climatic Condition

Both of the two physical components of the project are located in Urumqi city, the capital of Xinjiang Uygur Autonomous Region. It is located on a plateau within the range E 86°37＇33″ to E88°58＇24″and N42°45＇32″ to 44°08＇00″. The city of Urumqicovers an area of 14,206km2 with 302.8km2 built up area. Urumqi City is surrounded by mountains on all sides except for an open alluvial plain on the north. It slopes from southeast to the northwest with an average ground elevation of 800m.

Urumqi Cityis located in the central part of Eurasia and far from the sea, where the arid continental climate dominates. The climate is characterized with distinct seasons, spring is dry and windy, summer is hot with less rainfall, autumn is mild and cool, and winter is cold with less snow. Days with calm wind and temperature inversion is prevailing in winter, leading to a very poor condition for the dispersion of the atmospheric pollutants. The annual average temperature is 6.1℃, the annual average precipitation is 277.6 mm and annual average evaporation is 2266.0 mm.

3.2Surface Water Quality

There are 5 river systems in the city of Urumqi. The Component A will cross the Shuimo River and the Component B will cross the Heping Canal. The Central Environmental Monitoring Station of Urumqi carried out a surface water quality monitoring program in August 2009 in the Heping Canal and the Shuimo River respectively. The monitoring results show that the water quality in the two streams is polluted, even in some sections exceeding the Class V of Surface Water Quality Standard, the lowest requirement for beneficial use of surface water.

3.3Acoustic Environmental Quality

The primary source for noise is the traffic as the project is located in an urban setting. Xinjiang Monitoring Station carried out an acoustic quality monitoring program in 2010 on the selected sites for construction of substation and potential sensitive receptors under the project. The monitoring results show that the current acoustic quality in the selected sites is fairly good and meet the Acoustic Quality Standard of China

3.4 Ambient Air Quality

The ambient air is seriously polluted in the city of Urumqi. The routine air quality monitoring data, provided by the Central Environmental Monitoring Station of Urumqi in 2009, indicate that the resultson annual average basis for all of the 9 regular sampling points in the city exceed the Class II of the Ambient Air Quality Standard. The monitoring data also show a variation of air pollutants concentration in different seasons, as shown in Table 3-1 below.

Table 3-1Air Pollutants Concentration in Different Seasons in 2009 Unit:mg/m3

Such seasonal variation of air pollutants concentration indicates that the air pollution in heating season is much more serious than in non-heating season. It is primarily caused by the use of coal for space heating, compounded by calm wind and temperature inversion that often occur in winter.

3.5Current Status of Heating Service and Air Pollution Control

In Urumqi, the area serviced by CHP and clean energy heating currently accounted only for 20% of the total heating area. The rest were supplied through centralized heating or small coal-fired heating boilers and small coal-fired stoves, as shown in Table 3-2 below.

Table 3-2Space Heating in Urban Area of Urumqi in 2008 (million m2)

Coal is the fundamental energy source forUrumqi, offering73% of total energy consumed in the city. In 2008, the total coal consumption was 14.72 million ton, two thirds of which were used in winter. The coal consumption per capita was 3.96 ton, ranking first in China and 4 times as high as the national average. The primary source for air pollution is industrial sector, which consumed 77% of the total coal in 2008, whereas heating consumed 20% of coal.

However, the severe air pollution in winter is recognized to be associated with coal firing for space heating. The centralized coal-fired boilers serviced 57.2% of the total heating area in the city, its share of annual SO2 load was only 10.9% and annual PM10 load was 15.2% respectively in 2008. Although the small coal-fired boilers that are often used for smaller district heating networks and small coal-fired stoves, which are seldom installed with effective flue gas control devices, serviced only 23% of the total heating area, they contributed 40% ofatmospheric concentrations of SO2, PM10 and NOx respectively in the heating season of 2008.

In order to control air pollution caused by coal combustion in winter, the city issued its local standard“Emission Standard of Air Pollutants for Coal-fired Boiler” (DB65/2154-2010) and implemented since 2010. Its standard on dust and SO2 is stricter than the national standards for Boilers (GB13271-2001) and comparable to that of the WB/IFC’s EHS Guidelines., as shown in Annex 1 (Table 1-2).

As part of the effort to improve energy supply and heating systemin Urumqi and reduce coal based air emissions, the government proposes to use centralizedheating through CHP, to develop clean energy such as gas heating and to promote energy saving strategy. The target is to enhance CHP and clean energy use to 90% by 2015.

The government also plans to replace existing coal-fired substations and small coal-fired boilers withCHP and natural gas-based heating systems. Natural gas boiler is proposed to be used forpeak balancingof the CHP system and in areas that can not be reached by CHP.

3.6Respiratory Disease Status

The typical harm of air pollution to human health is respiratory diseases and physiological dysfunction.The statistical information for respiratory disease year around in some hospitals in Urumqi is given in Table 3-3 below.

Table 3-3 Outpatients of Respiratory Disease in Some Hospitals in Urumqi (2002-2005)

The data shows that the number of outpatients of respiratory disease reached the peak in November, December and January. Except for factors like weather change, atmospheric pressure increase and sudden drop of temperature, air pollution in heating season in winter is the main cause of the increased outpatients of respiratory diseases in Urumqi. In contrast, the number of outpatients of respiratory diseasesdecreased in spring and summer when air quality improved.

3.7Social and Economic Status

Urumqi is the capital city of Xinjiang Uygur Autonomous Region covering seven districts and one county. Urumqi City has the most complex composition of ethic groups in China. There are 49 ethnic groups such as Uygur, Han, Hui, Kazak and Mongolian. The total population is 2.082 million, 24.6% of which are ethnic minorities. About 83.5% of the people are in urban area. As the capital city of Xinjiang Uygur Autonomous Region, Urumqihas the largest total industrialoutput and strongest development potential in the region. The GDP of UrumqiisRMB 109.5 billion in 2009, accounting for more than 25% of the total of Xinjiang Uygur Autonomous Region. On constant price, the increase rate of GDP is 15% in 2009.

3.8 Key Environmentally Sensitive Receptors

Environmentally sensitive receptors of the project mainly include mosques, schools, hospitals, residential communities and streams. The impact of primary concern is the noise which would disturb the daily life or work of the people in proximity.

4.ENVIRONMENTAL IMPACT ASSESSMENT

4.1 Impact Assessment inConstruction Phase

Potential adverse impacts of the projectduring constructionare summarized in Table 4-1.

Table 4-1 Impacts in Construction Phase

4.2 Impact Assessment in Operation Phase