Transcript PHILIPPINE NAPIER BIOMASS PROJECT

GIANT KING GRASS
Biomass
Project
“The Philippines should now move towards a low-carbon economy. That
another delay in the implementation of the Renewable Energy
Law, is a backward trend in the battle against Climate Change.
There is a need to speed up green technological change towards
clean energy”
Ruth P. Briones
www.environmentalexpert.com
September 2011
Greenergy Solutions Inc.
Greenergy Solutions Inc (GSI) had
entered into with partnerships with
leading technology and engineering
companies worldwide which enable it
to engage its customers requirements
and needs in tune with industry trends
and market needs.
Greenergy Solutions Inc. (GSI) is a renewable energy company,
registered in the Philippines, organized by professionals with more
than 100 years combined experience in technology, operations,
financial and policy development in environment and power
utility sectors.
The company’s founders and management seek to utilize their
professional experiences, relationships and unique skills to originate
environment and renewable energy project(s) and collaborate with
foreign partners and investors experienced with development of
renewable energy projects.
The company envisions to be a total renewable energy
project development and technology provider, and to be a
long-term reliable partner offering an integrated range of
expertise on renewable energy project development.
www.greenergyph.com
ALL RIGHTS RESERVED
With rising energy costs for fossil
fuels, new efforts are required to
more fully develop biomass as an
energy source for process heat and
renewable energy power production
in the Philippine sugar cane industry.
Biomass energy plays an important
role in reducing oil imports,
particularly since oil prices have
risen. Approximately 80% of the coal
and 100% of the oil used in the
Philippines
is
imported.
Oil
intensifies the detrimental impacts on
the trade balance of the Philippines
as 125 million barrels of fossil fuels
are imported each year, representing
more than 3.5 billion dollars. The use
of imported coal for power generation
is also increasing, and currently
represents about 10% of imported oil
energy.
The potential of three biomass
resources (sugarcane trash, napier
grass and fast growing trees) were
examined as �green power� energy
feedstock alternatives. The positive
socio-economic impacts of a Biofuel
harvest included the provision of
4000 seasonal jobs and the
elimination of up to 14 million dollars
in oil imports. Harvesting biofuels for
process energy can also help
develop the expertise necessary to
create �green power� from cogeneration
in
the
future
if
investments are made in new boiler
technology. In this application, napier
grass appears to be a promising new
incremental source of biomass.
Its cost of production was projected
to be only 7% higher than the cost of
cane trash harvesting, mainly due to
land lease costs for the crop.� The
main concerns with fast growing
trees are the long period farmers
have to wait prior to receiving an
economic return, and that wood fuel
prices may rise significantly due to
competing end use applications in
the densely populated Philippines. �
�Like any developing country, the
Philippines is facing a formidable
challenge of fostering sustainable
energy options to support the energy
requirements of its economic and
social development goals with
minimal adverse effects on the
environment. In the Philippines,
renewable energy sources contribute
43 percent to the country’s primary
energy mix, one of the highest in
Southeast Asia.
overview
The Philippines has an existing
capacity of 5,500 MW of renewable
energy power. Out of which, 61
percent is hydropower while 37
percent is geothermal power.
Biomass energy application accounts
for around 15 percent of the primary
energy use in the country. The
resources available in the Philippines
can generate biomass projects with a
potential capacity of around 200 MW.
The country has abundant supplies
of biomass resources, offering much
potential
for
clean
energy
generation.
These
include
agricultural crop residues, forest
residues, animal wastes, agroindustrial wastes, municipal solid
wastes and aquatic biomass.
The most common agricultural
wastes are rice hull, bagasse,
coconut shell/husk and coconut coir.
The use of crop residues as biofuels
is increasing in the Philippines as
fossil fuel prices continue to rise.
Rice hull is perhaps the most
important, underdeveloped biomass
resource that could be fully utilized in
a sustainable manner.
Giant King Grass
Highest Yield=Lowest Cost
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Very high yield
– 100 dry mt/ha/year (44 US t/acre)
Sustainably grown, not a food crop, grows on
marginal land
Perennial grass, harvest 2x/year
Not genetically modified
Not an invasive species
Needs sunshine, warm weather & rain or
irrigation-no freezing
Fertilizer use is modest
No pesticide
Extensive bioenergy test data
5
Giant King
Grass
Test plot
6 ½ months
after planting
Cutting,
measuring &
propagating
6
Giant King Grass Has Been Extensively
Tested With Consistent Results
Unit
Sun Dried
As Received
Giant King Grass
Bone Dry
Total Moisture
%
14
0
Volatile Matter
%
65.68
76.37
Ash
%
3.59
4.17
Fixed Carbon
%
16.74
19.46
Total Sulfur
%
0.11
0.13
HHV
MJ/Kg
15.85
18.43
LHV
MJ/Kg
14.52
-
Proximate Analysis
7
Giant King Grass & Waste
Straws Have Same Properties
8
GREENERGY SOLUTIONS’
POWER AND BIOMASS
BUSINESS
MODEL
VERTICALLY
INTEGRATED
PLATFORM
Strategies for
land tenurial security as sites
for the napier grass plantation
 Entering into collaborative arrangements involving peoples’ organization who
were awarded tenurial instruments by the Philippine Government the terms
would include benefit-sharing arrangements, and aim to engage these local
communities in productive activities that generate positive social, economic and
environmental outcomes for local communities.
This scheme strengthens private sector investment in peoples’ forest initiatives at
same time provide opportunity to manage carbon and energy strategies.
The proposed project - the establishment of energy grass plantation
for Biomass power plant establishment and pellet mills will spur development
in the uplands.
Napier
Grass
 Napier grass (Pennisetum purpureum) is a very tall grass similar to sugar
cane and energy cane
 Well suited to tropical environments.
 Grown in fertile soils and adequately fertilized, it can produce a large
amount of biomass
 Easily planted from stem cuttings. Like sugarcane, it can be ratooned after
harvesting.
 Adapted cultivars can be maintained for 5-10 year production cycles.
 High productivity
 Good water use efficiency, low P and K requirements, potential for use of
Biological Nitrogen Fixing (BNF) varieties,
 Stand longevity and better adaptation to marginal and erodible soils than
sugar cane.
• PANGASINAN 1
• AREA- 6,000
• 30 MW
• Pellet Mill
Greenergy Solutions’
Biomass Project
Sites
• PANGASINAN 2
• 10,000 hectares
• 30 MW
• Pellet Mill
• ZAMBALES
• 10,000 hectares
• 30 MW
• Pellet Mill
PROJECT
DETAILS
Zambales and
Pangasinan, Luzon,
Philippines Energy
Crop Plantation/Power
Plant/Pellet Mill;
26,000 ha giant Napier
grass plantation in the
Philippines, with co-located
90 MW biomass power
project and biomass pellet
mill development company;
Electricity will be sold
under long-term Power
Purchase Agreement to
the Rural Electricity
Cooperatives;
Credit enhancement for
power purchaser likely
to be procured;
Concessionary power
purchase tariff (approx.
US$0.12 cents/kWh);
Pellet mill will export
biomass pellets to
customers in Asia
and/or Europe;
Power plant – approx.
US$55 million
generating 30 MWe
Pellet mill – approx.
US$33 million
Power plant and pellet
mill to be organized as
separate projects;
Locations :
Pangasinan, and Zambales, Philippines
Accessible to port
Interconnection with main Luzon grid – multiple options for
power sales
Site availability – 26, 000.00 ha site leased from government by
local NGOs or under contract farming
Sustainable development model – local NGOs will form JVs
with the Project under Contract Farming scheme
Company in a social enterprise model to manage land leases,
generating jobs for local villagers
GREENERGY SOLUTIONS’ POWER AND BIOMASS
NAPIER GRASS
PLANTATION
PELLET MILL
BIOPELLETS
GREENERGY’ Power and Biomass is developing napier grass plantations in the Philippines;
Objective to be the low cost producer of sustainable biomass for sale into international markets
Giant napier grass to be supplied directly to power plants under development Pellet mills will
also process napier grass into bio-pellets
Bio-pellets will be sold to European and Asia customers for co-firing in coal-fired power plants
Strong sustainability; no displacement of food crops; job creation/electricity for local community
Markets---Customers
50 to 100 million tons/year of projected demand,.
Why ?
DEMAND/SUPPLY IN EUROPE
 Well established, rapidly growing
market
 Market is currently 12 million tons/year
 Additional 40 million tons per year
projected to be required for electricity
generation by 2020,
 Another 50 million tons per year
required for heating and cooling by
2020, in order to meet national targets
 Pellets used for co-firing in coal plants
and as fuel in biomass power projects
 Demand projected to grow 1525%/year thru at least
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EU commitment to reduce greenhouse gas,
expand green power options
German commitment to take offline nuclear
generation
As well, with coal prices at near record
highs, alternatives become more attractive
Unlike wind and solar, biomass power is
continuously available
RESULT: Biomass plants in
construction/planning and increase in cofiring
Additional supply must be provided by North
American/Asian producers
Europe does not produce enough wood biomass to
meet demand
Pellet Mills being built in SE USA; British Columbia,
Canada
Relatively high cost base; little vertical integration
Controversy over whether sustainable forestry
practices followed
Recent price quotes of approximately $180/MT
(CIF Rotterdam
Markets--Customers
DEMAND IN ASIA
•
Just beginning, but huge potential
PRIMARY REASONS FOR POTENTIAL GROWTH:
 Competitive with coal
 Access/availability of biomass
 Biomass is easier and sometimes cheaper option than gas-fired generation
 Regional focus on reducing carbon/green energy part of generation mix
China
 Co-firing coal power plants located along coast/rivers
 10GW coal power plants along coast in Shandong Province alone
 10% co-firing would require approximately 6 million tons of biopellets
 Potential for large-scale coastal biomass power plants (300 MW each)
Japan
o 60GW coal plants; Co-firing; Nuclear becoming less of an option; ability to meet
o Kyoto commitments relies on non-nuclear solution to generation options
o Potential for large-scale coastal biomass power projects (300 MW each)
DEMAND IN ASIA
(CONTINUED)
Korea
 14GW coal plants. Committed to biomass. Co-firing and stand-alone biomass
plants
 South Korean governments estimates that demand for biomass pellets will
increase from 20,000 tons/year in 2010 to 5 million tons/year in 2020
 Potential for large-scale coastal biomass power plants (300 MW each)
India
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Inability to set up domestic energy crop plantations due to land use constraints
Need for 100,000 MW of new capacity to meet demand over next few years
Constraints on developing coal and gas-fired power
No security of supply for agricultural waste biomass
Significant potential for coastal biomass power projects (300 MW)
Markets--Customers
SUPPLY IN ASIA

Biomass supply has been limited to agricultural waste

Rice husks; palm kernel shells; empty fruit bunches

No security of supply – farmers raise prices on agricultural waste, causing financial loss for
power plants

Limited supply of pellets; larger-scale biomass power plants have not been possible because
of limited biomass supply

NO COMPANY IS FOCUSED SOLELY ON SUPPLYING THIS MARKET

OPPORTUNITY EXISTS TO ESTABLISH A DOMINANT MARKET

POSITION THROUGH COMBINING ENERGY CROP

SUSTAINABLE FORESTRY OPERATIONS IN SIBERIA AND SE ASIA
The Philippine Government
Requirements
for Biomass
 In the Philippines, renewable energy sources contribute 43 percent
to the country’s primary energy mix, one of the highest in Southeast
Asia.
 The Philippines has an existing capacity of 5,500 MW of renewable
energy power. Out of which, 61 percent is hydropower while 37
percent is geothermal power.
 Biomass energy application accounts for around 15 percent of the
primary energy use in the country.
 The resources available in the Philippines can generate biomass
projects with a potential capacity of around 200 MW.
ONE BIOMASS POWER PLANT30 MW BIOMASS POWER
PROJECT AND ENERGY CROP PLANTATION (1500 ha)
TOTAL PROJECT COST FOR ONE PLANT: $ 55.0 M
FUNDING ARRANGEMENT: 30% Equity 70% Debt
PROJECT
OVERVIEW
 90 MW biomass power project
 Co-located with 26,000 has king grass plantation in Pangasinan and
Zambales
 For each site 1500 ha dedicated to power project; the remaining area will
be dedicated to a pellet mill (separate special purpose project companies)
 Biomass pellets to be exported to utility customers in China, Korea and
Japan
 Europe and Japan (used for co-firing in coal-fired power plants)
 Feedstock - giant napier grass
 2-3 harvests/year
 18 kj/kg energy yield approx. equivalent to Grade “C¨ coal
 Build-Own-Operate basis
 Power Purchase Agreement with Rural Electric Cooperatives
PROJECT
ADVANTAGES
• Secure biomass fuel supply and pricing – solves key risk
factor for biomass power plants.
• Ability to increase scale as needed to meet baseload power
demand.
• Lower cost than diesel and oil-fired power.
• Fuel diversification for Luzon grid; baseload capability helps
balance intermittent hydroelectric power.
• Reliable power supply – no fuel delivery interruptions.
• Renewable energy source – clean energy eligible for carbon
credits.
• Approx. 250 jobs created per 1000 ha at plantation.
• Furnishes reliable power supply and creates major export
industry (biomass pellets)
Napier Grass
Feedstock
• 30 MW power plant requires 1500 ha co-located
napier grass plantation
• Power plant utilizes 600 metric tons/day
• King grass yield – 100-135 metric tons/ha
• Energy yield – 18.4 Mj/Kg (equivalent to lowrank coal)
• Energy yield in Gj/ha – 1840-2484
• (Foregoing figures provided by prospective Supplier.
• Estimated total project cost is US $ 55.0 M
• Development timeline : 24 months
Napier Grass
Plantation
Napier Grass
Feedstock
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Fast-growing;
Giant napier grass produces in first year
Other crops only produce 2-3 years after harvest
Best suited for tropical/sub-tropical areas
Napier grass can be grown in acidic or mildly
saline soil (no displacement of food agriculture)
• Requires at least 100 days sunshine, at least 800
mm rain or irrigation
Napier Grass
Feedstock
• 30 MW power plant requires
1500 ha co-located napier
grass plantation .
• Power plant utilizes 600
metric tons/day
• King grass yield – 100-135
metric tons/ha
• Energy yield – 18.4 Mj/Kg
(equivalent to lowrank coal)
• Energy yield in Gj/ha – 18402484
Napier Grass as
Biomass Power
Plant Feedstocks
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30 MW grass-fired electricity generating plant needs 460 tonnes of grass
every day
Average household in Asia uses 1200 kWh/year or average power of
0.14 kWAverage household in US uses 11,200 kWh/year—1.3 kW
30 MW plant can supply 214,000 Asian households
30 MW power plant requires 1000-2200 hectares of land (using Giant
King grass with yield of 350 tons/hectare wet and 75-175 dry)
One hectare can provide electricity for 98-214 households
Cost Estimates for establishment, protection and maintenance of One-hectare Napier
Grass Plantation
Activities
Cost per hectare
A. Nursery Operations (seeds/seedlings procurement and handling, nursery site
preparation, sowing of seeds, gathering & preparation of soils, bagging of soil, potting of
seedlings, preparation of potbeds and arranging pots, maintenance of seedlings, cost of
plastic bags, cost of fertilizer)
PHP 9,544.0
B. Plantation Establishment ( Detailed survey & mapping, site preparation, transport of
seedlings, planting)
PHP 14,756.0
C. Maintenance & Operation ( Plantation Maintenance, green break construction,
replanting, patrol work, fertilizer requirements)
PHP 9,074.0
D. Capital Outlay/Infrastructure ( variable road construction, bunkhouse, look-out tower)
PHP 8,000.00
E. Supervision & administration
PHP 8,000.0
F. Infrastructure Maintenance
PHP 8,600
Total Cost Per Hectare
PHP 49,984
USD 1,162.42
Total cost per 100 Hectare
PHP 4,998,400.00
USD 116,241.86
Napier Grass
Feedstock
 Fast-growing; giant napier grass produces in first
year
 Other crops only produce 2-3 years after harvest
 Best suited for tropical/sub-tropical areas
 Napier grass can be grown in acidic or mildly saline
soil (no displacement of food agriculture)
 Requires at least 100 days sunshine, at least 800
mm rain or irrigation
Project Site –
Social Enterprise
Initiative
 26, 000 has sites has been awarded to local POs/NGOs from
Philippine government
 Leases will be assigned to JVs to be formed with Peoples
Organization – under a contract farming scheme employment to be
provided to local villagers together with lease income stream
 Potential to develop a complementary export industry with hard
currency earning potential
 Significant demand for sustainable fish farms as a response to
over-fishing in open ocean
 Site is in an area which is prone to flooding
 Port access by road for export of biomass pellets
Project Impact in
the Philippine
Market
 Important demonstration project for vertically integrated biomass (follow-on
projects in the Philippines and other Asia markets) involving electricity
cooperatives:
- Social enterprise precedent through partnerships with local NGOs
- New precedent in Asia for large-scale biomass projects
 Most biomass power projects in Asia do not exceed 20 MW due to limited
agricultural waste feedstock supply
 Biomass projects are being planned in Europe at a scale of up to 300 MW
 New renewable green energy source for the Philippines
 Scalable up to much larger capacity
 Reliable baseload electricity source
 Alternative to diesel and HFO for island markets outside Luzon
BIOMASS PELLET MILLS
PROJECT AND ENERGY CROP PLANTATION
Pellet Mill
Project Structure
Project to be undertaken in parallel with 30 MW
biomass power project.
Pellet Mill and 4500 ha plantation to be owned by
separate special purpose company for Giant Napier
Grass pellets
Already tested by major European utilities for co-firing in
coal-fired power plants
Discussions under way with potential customers
US$33 million indicative estimate for pellet
mill/plantation capital costs
Biomass
Pellet Mill
Pellet Mill
Project Status
IMPLEMENTATION
CROP:
Agreement reached with vendor to provide
Giant Napier grass
TECHNOLOGY:
Discussions ongoing with Chinese pellet mill
equipment vendors
Equipment selection based on technical
and financial analysis
CUSTOMERS:
European utility customers identified with
preliminary discussions
Chinese customers identified;
Huge demand noted with preliminary
discussions
POTENTIAL PELLET
MILL PROJECT
STRUCTURE
Special Purpose Company to be
established to develop, own and manage
plantation and pellet mill
Capital Cost Investment: $33,000,000
Investment Funded in 2012 -2013
Conservative Scenario Equity Finance followed by
5 year debt take-out on 70/30 debt-to-equity ratio
Cash Flow beginning in 2013
Payback period----Approximately 2 years
Development Budget funded commencing
in 2011/12
Financials (Pellet
Mill/Plantation)
PROJECTED ECONOMICS/PELLET MILL AND PLANTATION
 Projected Plantation size 285,000 tons/year
 Sufficient size to allow for one “Handy Size” vessel every other month
 Approximately 50 tons/hour pellet mill and 5MW captive power plant
 Covering 4,500 hectares
Total Investment
 Plantation & Crop: $9,000,000
 Pellet Mill: $6,500,000
 Power Plant: $3,800,000
 Port Facilities: $3,800,000
 Trucks/Harvesters: $5,400,000
 IDC & Working Capital: $4,500,000
 TOTAL: $33,000,000
Anticipated Construction Period: Nine Months
Philippine Government
Incentives and Supports
The incentives
include under the
Renewable
Energy law
•
A seven-year tax holiday;
•
No tax on the sale of carbon credits generated from renewable
energy sources ;
•
A 10-percent corporate income tax thereafter;
•
Custom duties are zero rated on equipment and facilities to be used
in the Renewable Energy Projects;
•
The law also prioritizes the purchase, grid connection and
transmission of electricity generated by companies from renewable
sources, and exempts power generated from these sources from
value- added tax, and custom duties, these measures will ultimately
ensure a market for renewable energy, and provide a system that will
allow consumers to choose green sources of energy in the long
term.
•
The Philippine Renewable Energy Act of 2008 provides “Pioneer”
and “Priority Investment” status to the proposed gasification
projects of Greenergy as Renewable Energy projects and is
designed to spur investments in the renewable energy sector with
incentives.
Non-Fiscal Incentives of Biomass
Power Plant Facilities Under the
Renewable Energy Law (R.A. 9513)
Priority
purchase of
electricity
generated
Priority grid
connection
Priority
transmission
of electricity
Priority
investment
area
Green
option
Please Contact us
RUTH P. BRIONES
Greenergy Solutions Inc.
Rms 401 &402 Verde Oro Bldg., Commonwealth Ave.
Diliman, Quezon City, Philippines
Phone No. +632 497 9452 ; Telefax No. +632 456 2293
Email Address: [email protected]
Website: www.greenergy-solutions.com