Transcript Case study on Bagasse Energy Cogeneration in Mauritius by

Case study on Bagasse Energy
Cogeneration in Mauritius
by
Dr. Kassiap Deepchand
Technical Manager
Mauritius Sugar Authority
Content of presentation
• Mauritius Sugar industry background
• Bagasse Energy Development policy issues
- Sugar Sector Action Plan
- Sugar Industry Efficiency Act
- Bagasse Energy Investments
- Institutional set up
- Constraints to development
 Bagasse Energy projects
Content of presentation (ii)
 Electricity export
 Participation of stakeholders
 Project implementation experience
 Technology transfer options/lessons learnt
 Concluding remarks
Mauritius: Selected Indicators
• Population (million): 1.1 (2000)
• Area (km2): 1,865
• Capital City: Port Louis
• GDP Growth Rate (%): 7 (2000)
• GNP per Capita (US$): 3,600 (2000)
• Official Exchange Rate: MRs. 29.5 = 1 US$ (Dec,
2001)
Mauritius: Selected Indicators (ii)
• Economic Activities: Agriculture, commerce,
financial services, construction, textile
manufacture, tourism
• Energy sources: Hydro, Bagasse, Solar,
imported petroleum, imported coal.
• Installed capacity (MW): 498
• Electricity consuption per Capita (kWh): 1,156
(2001)
• Electricity generation (GWh): 1,424 (1999)
• System Losses (%): 10.8 (1999)
Mauritian Cane Sugar Industry
•Introduced by Dutch - 17th Century
•Production reached - 650,000 tonnes
•Major net foreign exchange earner
•Provided industrial base for emergence of
Mauritius as a semi-industrial society
•Ensured economic growth and social stability
Sugar Production/Exports
Target: 650,000 tonnes
Export:
•Sugar Protocol (ACP/EU) - 506,000 t
•Special Preferential Sugar Agreement (1995) 40,000 t
•USA - 12,000 t
•Other Market - 8,000 t
•Local Market - 38,000 t
Cane Land Area/Ownership
Total area - 186,000 ha
Area under cane - 75,000 ha
Miller Planter - 55% or .. Ha
•Number - 21
•Size of holdings - 700 to 5,500 ha
Small Growers - 45% or .. Ha
•Number - 35,000
•Size of holding - 0.1 to 10 ha
Cane Sugar Industry Background
Small Planters (<5 ha)
Large Planters
Miller Planters
Miller
Total
100
CROP 1998
Area under
Cane
Ha
%
20274 28
15620 21
37375 51
73269 100
Tonnage of
Sugar
T
11487718
95754
270325
149024
629980
%
15
43
24
Sharing of Sugar /By-products
Growers
Millers
%
%
Sugar
78
22
Molasses
100
0
Filter Mud
100
0
Bagasse*
38
12
*Out of a Bagasse Transfer Price Fund for
bagasse @ Rs100/t used for electricity export
Energy Status - Mauritius
•No oil, gas or coal reserves
•Renewable energy - hydro and sugar
cane
•Hydro - 10 MW (fully exploited)
•Sugar Cane - 5.8 million tonnes
•Imported diesel, coal and gas
Evolution in Energy Demand
Sharp level of increase due to:
•Expansion in EPZ and tourism;
•Quality of life improvement.
Annual increase:
•Over 11% in consumption;
•9.5% in maximum demand.
Sugar Sector Action Plan (1985)
Reason:
•Rising demand in Preferential Market
•Rapid price increase as from 1975
•Subsequent fall in price
•Profitability threatened
•Export duty increase
•Climatic conditions (cyclone/drought)
Sugar Sector Action Plan (ii)
Objective:
•Restructure to maintain viability
•Modernise production both at field/factory
•Export duty relief
•Centralisation
•Energy from bagasse
Action Taken
•Add. Prod. speciality sugar
•Improve irrigation techniques
•Adoption of derocking/mechanisation
•Intensity research (variety/efficiency in field
operations)
•Value added products, e.g. electricity
Sugar Industry Efficiency
Act(1988)
Objective:
•To provide for an efficient and viable sugar
industry
•To promote agricultural diversification and
diversification within sugar
Sugar Industry Efficiency Act (ii)
•Introduction of performance linked export duty
rebate related to:
(a) Improved sugar recovery
(b) Enhanced use of bagasse for energy
(c) Use of cane interline/rotational land for
foodcrops
•Income tax
Incentives for speciality sugars, investment in
energy saving and investment in bagasse electricity
Investment Options
(i)
(ii)
Utility to add 2 x 24 MW (fuel oil)
Utility to invest in 40-50 MW coal
plant
(iii) IPP for 2 x 22 MW bagasse/coal plant
Option (iii) was adopted in that:
•It would displace public sector investment
•It was economically more attractive
Definition of Cogeneration
• Energy
system sequentially generating
electrical power and thermal energy
• System common in cane sugar industry
for a very long time
Bagasse Energy and Sugar Production
Sugar Sector Action Plan:
•Emphasis on bagasse energy
•Active collaboration between Government and
Private Sector
•Formulation of appropriate enactments (SIE Act)
•Industry presented a programme of investment
US$130M for factory
modernisation/irrigation/diversification inc.
US$27M w.r.t bagasse energy
Bagasse Energy Development Objectives
•Optimise bagasse electricity for
export with increase from 70 to 120
GWh implying a 22 MW bagasse/coal
plant
•Use of cane field residues for
additional electricity from cane
biomass
Bagasse Energy Development Benefits
•Maintain long-term viability of sugar sector
•Increased investment in
rehabilitation/modernisation
•Ensure continued viability of sugar sector
•sustained commitment for Sugar Protocol
•Saving on fossil fuel import
•Saving on boiler/turboalternator investment
equivalent of 50% investment in sugar
factories
Bagasse Energy - Investments
(US$80M)
•2 bagasse/coal plant at 2 regional
factories
•Energy conservation in cane
processing
•Bagasse saving and transport to central
power plants
•Investment in transmission lines
Projected Capital Investment
US$55M
•22 MW power - US$24M
•Bagasse Saving - US$18M
•Studies on Cane Field Residues US$1.6M
•Bagasse Transport Studies US$1.3M
•GEF Grant of US$3.3M
Institutional Set-Up
(i)
Regulatory framework:
- to promote private sector investment in
power production and factory modernisation
- to encourage efficient bagasse market
- to attend to energy pricing/contracting
(ii) Setting up of an ad-hoc technical committee
comprising of MSA/Ministries of Public
Utilities/Finance/and Economic Planning
(iii) Setting up of a BEDP Coordination Unit at
MSA
Constraints to Bagasse Energy
1.
2.
Price of bagasse (based on coal kWh at
condensing mode)
- Consolidation of milling activities
excluding transport of bagasse
Funding and fiscal framework (huge
capital required)
- Enactments to induce investments
e.g. tax free debentures, segregation of
growing/milling activities w.r.t bagasse
energy
Constraints to Bagasse Energy (ii)
3.
4.
Centralisation of cane milling activities
Reduction in number of mills
closing of small ones in favour of
higher capacity
kWh price - based on avoided costs
(Technical Committee)
Table 1 -Bagasse based Power Plants in Mauritius up to year 2000
Factory
Tonne
Power
cane per
hour
FUEL
Deep River/
Beau Champ
Belle Vue
Médine
Mon Tresor/
Mon Desert
Union St Aubin
Riche en Eau
Savannah
Mon Loisir
Mon Desert Alma
Total
270
F
Start Date Units from Units from Total Units
Bagasse Coal
from Bagasse
& Coal
(GWh)
(GWh)
(GWh)
Oct 1998 60
115
175
270
210
190
F
F
C
April 1998 70
April 2000 105
1980
20
105
150
130
135
165
170
C
C
C
C
C
C
3F
7C
July 1998
July 1997
July 1998
July 1998
July 1998
Nov 1997
85
220
-
14
16
17
20
20
18
360 GWh 420 GWh
235 GWh F
125 GWh C
F = Firm or Bagasse during crop and Coal during intercrop
C = Continuous or Bagasse during crop season only
155
325
20
14
16
17
20
20
18
780 GWh
Table 2 -
Evolution of Bagasse (in tonnes)
saved and sold to firm power plant
Factory
1988
1992
1998
DRBC
Beau Plan
Belle Vue
Constance
MDA
Mon Loisir
Britannia
Riche en Eau
6844
0
90
8506
897
0
0
0
13650
0
7688
14980
7992
8749
0
3995
0
6106
28524
0
0
0
1239
0
Evolution of sugar industry
electricity export (1989 – 2002)
Year
Bagasse
GWh
Coal
1989
1995
2002
56
84
299
68
41
447
Island
589
1047
1715
S.Ind.%Is
land
21.0
11.9
43.5
Bagasse Transfer Price Fund
(BTPF)
Comprises of 2 elements:
• Sale of electricity to the grid
• Sale of bagasse for purposes other
than sugar manufacture
Bagasse Transfer Price Fund
(BTPF)
Accruals to BTPF
• Electricity
kWh exported x Rs100/t bagasse = A
Conversion Factor
for continuous, factor was 360 kWh/tonne
bagasse up to year 1995 and subsequently 400
kWt/tb
for firm, factor is 440 kWh/t bagasse
- Other uses – weight of bagasse x Rs100 = B
BTPF = A + B
Sugar Investment Trust (SIT)
Instituted in 1994
Shareholders
• Employees of sugar industry and
institutions
• Cane growers
Sugar Investment Trust
Share Ownership of:
• 20% in all milling companies
• 14% in 70 MW CTBV power plant
• 20% in 38 MW plant at FUEL
• 10% in 24.5 MW at DRBC
Dividend paid
• 1999
4%
• 1998
6%
Sharing of Revenue
For cogenerator
60% income tax free
50% of BTPF in proportion
to share of electricity
exported
For non miller-planters 38% of BTPF prorata on
sugar production
For miller-planters
12% of BTPF prorata on
sugar production
For SIT shareholders
Share of dividend
Project Implementation Stages
1.
2.
3.
4.
5.
6.
Government policy definition on
bagasse energy
Energy conservation measures and use in
sugar factories
Public utility to establish energy demand
forecast
MoU between utility/sugar company
Conduct of feasibility study
Signing of PPA
Project Implementation Stages (ii)
7.
8.
9.
10.
11.
12.
13.
Raising of funds (PPA as bank
guarantee)
Detailed design
Tendering for supply of equipment
Evaluation of tenders
Award of contract
Erection/Commissioning
Operation
Technology Transfer Opportunities
Mauritius has acquired an indigenous
experience on bagasse energy
10 power plants of which 3 export
firm power (coal and bagasse) and 7
export continuous power (bagasse
only)
All plants located within 1,860 km2
and are easily accessible
Can share the experience inc. visits
Cane Sugar Industry
Mauritius/Fiji
Mauritius
Land area (km2)
1,860
Arable area (ha)
95,000
Area under cane
75,000
Cane production (x106) 5.8
Land ownership
Private
Mill ownership
Private
No of mills
11
Crushing capacity (daily)1,600-7,000
Bagasse energy
10 plants
Fiji
16,000
200,000
100,000
4.0
Tenant
Government
4
N/A
2 plants
Lessons Learnt/Recommendations
-
-
Bagasse based electricity linked with
sugar as well as with power sector
Government support and clearly
defined policy on bagasse as a
substitute to fossil fuel
Full participation of all stakeholders
right from conception to
implementation with World Bank
acting as “honest broker”
Lessons Learnt/Recommendations
(ii)
-
-
-
Detailed feasibility with proper cost
estimate to avoid delay in
implementation
Bagasse/coal power plant associated
with environmental advantages and
benefit the sugar industry and the
country at large
Bagasse saving and transport to
central power plant is not advisable rather cane milling operations should
be centralised
Concluding Remarks
Mauritius
• successfully implemented bagasse
energy cogeneration on a commercial
basis
• attributable to be the various
entrepreneurs operating in an
environment with clearly defined
Government policy
Concluding Remarks
But this success could have been jeopardised
• were it not the participation and involvement
of all the stakeholders in the sugar industry
especially the most vulnerable partners like the
employees and the small cane growers.
• Government, through legislation and
establishment of the Investment Trust coupled
with the collaboration of the entrepreneurs has
created the necessary environment which has
led to the success of bagasse energy
cogeneration.