Transcript Production of Thermoelectric Power from the Solid Waste of
PRODUCTION OF THERMOELECTRIC POWER FROM THE SOLID WASTE OF URBAN LAHORE
Mohammad Rafiq Khan and Harris Tanveer Lahore School of Economics, 19 Km Burki Road, Lahore Pakistan
INTRODUCTION
Appropriate Technology
Sustainable Development and Agenda 21
Solid Waste Disposal with Resource Recovery: Europe, America, Japan and some developing countries
BACKGROUND STUDIES
[1] Kyritsis, S. 2000. Proceedings of the 1st World Conference on Biomass for Energy and Industry held in Seville in June 2000 [2]
Riffat, SB. 2003. Thermo-electrics: a review of present and potential applications. Applied Thermal Engineering, 23(8): 913-935
[3] Dubois, M., Gonzalez, A.M.M., and Knadel, M.. 2004. Municipal Solid Waste Treatment in the EU, Publisher: Centre for Environmental Studies University Of Aarhus Finlandsgade ,Denmark [4]
Donelly, C., and Parkman, M.
, 2006, Leicestershire Municipal Waste Management Strategy, Best Environmental Option , Strategic Assessment., An Environmental Report produced for Lancashire County Council [Online], Retrieved January 21, 2009
. from
http://www.lancashire.gov.uk/environment/lmwlp/pdf/bpeo161104.pdf
[5] Hogg, Leicestershire Municipal Waste Management Strategy Environmental Report LMWMS 2006 Document 14 (May 2006) [6] Skovgaard M, Hedal N, Villanueva A, Andersen FM, Larsen H. Municipal waste management and greenhouse gases. Copenhagen, Denmark. European Topic Centre on Resource and Waste Management, 2008
System approach is very popular these days and waste is being modeled for its management and optimal use for energy in future Waste is being modeled for optimization of its use in projections of Denmark and other Scandinavian countries for 2025. These systems also model investment to be made on waste incineration based projects but the studies are on the way
WORK AT LSE
Start 2006 Pakistan is also suffering from the problems highlighted above. Along with the food and energy crises, it is also facing the environmental impact of dangerous pollutants. A group of researchers at LSE have undertaken some work to solve these national problems. These researchers framed a pilot scheme to carry out research in three phases. They studied in detail the production of thermo electric power from solid waste of four educational institutions of Lahore: Lahore School of Economics (LSE), Lahore University of Management Sciences (LUMS), Government College University Lahore (GCUL) and Kinnaird College (KC). Khan and Sheikh assessed the solid waste of LSE and studied the economic viability and technical soundness of the project based on it. Similarly Khan and Kamal appraised a project based on waste of LUMS , Khan and Pervez on that of KC and finally Khan and Abbas on that of GCUL . The results were significant and thus the spectrum of study was extended to schedule a model village, two urban colonies of Lahore and finally the City of Lahore as a whole ; the piece of work being presented today that marked the end of Phase 2 of the Scheme. In Phase 3, the spectrum of activity will be extended to other major cities of Pakistan. The information gathered about different cities and towns will be finally integrated to assess overall potential of Pakistan to produce thermoelectric power. From this source .
THE MAJOR OBJECTIVES OF THE RESEARCH WORK REPORTED HERE WERE AS FOLLOWS:
To standardize a method for safe and techno-economic disposal of Lahore’s solid waste.
To study the feasibility of production of thermo-electric power from the biomass of solid waste.
The project if not feasible, to study how to pull it towards feasibility.
Recommendations to the concerned agencies for effective solid waste management.
APPRECIATION OF RESULTS
Results of Phase 1 Khan, MR and Sheikh, S. (2010). Production of Thermoelectric Power from Solid Waste: A Case of Lahore School of Economics, International Energy Journal, 11: 51-64 Khan, MR and Kamal, M. (2007). .Production of Thermo-electric Power from the Solid Wastes of Lahore University of Management Sciences. Presented in International Conference on Environment held by Monash University in Malaysia in December, Proceedings in Process. Available on Website of Monash Khan MR and Pervez, F. (2009). Production of Thermoelectric Power from the Solid Wastes of Kinnaird College, Environ Monitor, IX (9&10): 14-28 Abbas, S. (2007). Production of Thermoelectric Power from Solid Waste of Kinnaird College; B. Sc, (Honors) Thesis Available in Resource Centre 2, Lahore School of Economics Lahore.
Phase 2 Publications in process) Ahmad, M. Production of Thermoelectric Power from the Solid Waste of Canal View Cooperative Housing Society Lahore. 2008. B. Sc. Honors Thesis Available in Resource Center 2 of Lahore School of Economics.
Zia, M. 2008 .Production of Thermoelectric Power from the Solid Waste of Gulberg, Lahore. 2008. B. Sc. Honors Thesis Available in Resource Center 2 of Lahore School of Economics Burhan, M. 2008. Production of Thermoelectric Power from the Solid Waste of Bhengali (Union) Council, Lahore. 2008. B. Sc. Honors Thesis Available in Resource Center 2 of Lahore School of Economics Tanveer, H. 2008.Production of Thermoelectric Power from the Solid Waste of Urban Lahore. B. Sc. Honors Thesis Available in Resource Center 2 of Lahore School of Economics. Research paper written out of this thesis is Under review by Energy-Elsevier for Publication Ali, Z. 2008. Ali, Z. 2008.Production of Thermoelectric Power from the Solid Waste of Infectious Hospital Waste of Lahore. B. Sc. Honors Thesis Available in Resource Center 2 of Lahore School of Economics Phase 3 1. Khan, MR. 2010. Potential of Production of Thermoelectric Power by Sugar Mills of Pakistan, Presented in Conference on Energy and Sustainable Development 2010 held by Asian Institute of Technology in Chiang Mei on June 2 to 4. 2. Khan, MR. 2010. Production of Thermoelectric Power by Some Educational Institutions of Pakistan: Presented in Conference on Energy and Sustainable Development 2010 held by Asian Institute of Technology in Chiang Mei on June 2 to 4. Khan also presented this article in capacity of a specially invited speaker in a seminar on May 05, 2010 organized by Pakistan Institute of Development Economics (One of the Weekly Seminar Series) to take feedback of teachers, scholars and students. Significant positive comments were made which were helpful in presentation in Conference. Available at AIT and PID EWebsites
METHODOLOGY OF RESEARCH
Secondary Data: The projection is based on primary data Collected from Punjab Urban Unit The primary data about production and mode of disposal of solid waste were collected from different offices of LMC, PUU, LDA, EPD and others by interviewing concerned officials. The total electricity consumed by the people of Lahore from WAPDA and Local Production from Generators was calculated from data collected from LESCO as shown in Table 3(Number of connections, revenue collected from the monthly bills) . Questionnaire Data Analysis The data collected from different respondents was sorted in terms of reports. The basic and alternative project were cost designed and subsequently appraised by the application of discounted cash flow techniques standardized by Asian Development Bank (ADB 2001 and 2002). The details of cost design and analysis of projects are compiled later.
Interpretation of Results
TABLE 1: THE DETAILS OF THE SOLID WASTE PRODUCED AND DISPOSED AT DIFFERENT SITES Sites
Ravi Shalimar Wahga Aziz Bhatti Data Gunj Buksh Samanabad Gulberg Allama Iqbal Nishtar Total Miscellaneous Areas Grand Total
S Solid Waste Produced per Solid Waste Produced per Day (Tons)
731
Month (Tons)
731× =21,930
Solid Waste Produced per Annum (Tons)
21,930×= 263,160 591 460 470 719 748 554 720 686 5679 21 591×30= 17,730 460×30= 13,800 470×30= 14,100 719×30= 21,570 748×30= 22,440 554×= 16,620 720×30= 21,600 686 × 30= 20,580 5679 x30= 170,370 21 × 30 = 630 17,730×12= 212,760 13,800×12= 165,600 14,100×12= 169,200 21,570×12= 258,840 22,440×12= 269,280 16,620×12= 199,440 21,600×12= 259,200 20,580×12= 246,960 170,370x12= 2,044,440 630 × 12 = 7,560 5700 171,000 2,052,000
TABLE 2: PHYSICAL COMPOSITION OF SOLID WASTE
Series No.
1 2 6 7 3 4 5 8 9 10 11 12 Description Vegetables & Fruit Residuals Paper % Weight 30.72
2.70
Plastic & Rubber 5.63
Leaves, Grass, Straws 20.02
Rags 7.45
Wood Bones 1.24
1.03
Animal Waste Glass Metals Dust, air, ashes. Stones. Bricks. Etc Unclassified Total 2.53
0.70
0.32
27.65
0.01
100 Tons Per Day 1744.5
153.3
319.7
1136.9
423 70.4
58.4
143.6
39.7
18.1
1570.2
0.56
5700
TABLE3: POWER CONSUMPTION IN LAHORE OVER THE LAST FOUR YEARS
Sr. Year and Point of Time No.
1 2 3 4 June 2003 June 2004 June 2005 June 2006 Power Consumption Million-Rs.
41,302 47,102 49,334 55,742
Cost Analysis Initial Fixed Investment It includes the cost of land, building, machinery, equipment ( Table 4), and preproduction expenditure . The total initial fixed investment with land was Rs 1,756,340,000 while that without land was Rs. 1,656,340,000 Operating Cost The operating cost is computed in Table 6. The operating cost for year 1 came out to be Rs 471,752,000.
Expenditure in the Base Year Initial fixed Investment = Rs 1,756,340,000 Operating Cost = Nil Total Expenditure = Rs 1,756,340,000 Expenditure in Future Years The assumptions and computations are given in Appendix 1. The computation is displayed in Table 6. The total operating cost discounted to the base year turned out to be Rs. 2,367,132,214.
TABLE 4: COST OF PLANT MACHINERY & EQUIPMENT
Plant Machinery and Equipment Steam Boiler Water Treatment Plant Feed Water Storage Tank Multi Stage Turbine Electric Pumps Distribution Panel Transformer Vehicle (Truck, Bucket Loader) Cranes Total Capacity 225 Ton/Hour 50 Ton/Hour 300 Tons 50 MW/Hour 120 MVA Total Cost of Plant Machinery and Equipment = 1,607,500,000 Quantity 2 1 2 2 10 1 1 50 10 Cost Rs. 500,000,000 Rs.1,000,000 Rs. 10,000,000 Rs.850,000,000 Rs.1,500,000 Rs. 20,000,000 Rs.50,000,000 Rs.75,000,000 Rs.100,000,000 Rs 1,607,500,000
TABLE 5: BREAK DOWN OF LABOR AND LABOR COST
Labor Number Project Manager Power House in Charge Manager Accounts Accounts Assistants Manager HR Assistant HR Medical Officer Medical Assistants Turbine Foreman Boiler Engineers Boiler/Turbine attendant Boiler/Turbine Helper Water Treatment Plant Labor Telephone Operator Electrician Vehicles Drivers Crane Operators Security Guards Office Boys 1 1 4 3 1 5 1 4 6 3 12 9 10 3 10 150 30 10 10 Salary Employee 150,000 per Salary per Month 150,000 80,000 40,000 12,000 40,000 12,000 240,000 40,000 60,000 40,000 48,000 40,000 10,000 30,000 60,000 10,000 7,000 7,000 10,000 15,000 15,000 15,000 6,000 6,000 30,000 40,000 180,000 180,000 120,000 63,000 70,000 30,000 150,000 2,250,000 450,000 60,000 60,000
TABLE 6: TOTAL OPERATING COST
Years 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 Calculations (Rupees) Operating Cost = Cost of (Labor +Utilities & Chemicals + Maintenance & Depreciation) 0 0 63,852,000+86,400,000+321,500,000 70,237,200+103,680,000+321,500,000 77,260,920+124,416,000+321,500,000 84,987,012+149,299,200+321,500,000 93,485,713+179,159,040+321,500,000 102,834,285+214,990,848+321,500,000 113,117,714+257,989,018+321,500,000 124,429,485+309,586,821+321,500,000 136,872,434+371,504,185+321,500,000 150,559,677+445,805,022+321,500,000 Operating Cost (Rupees) 0 0 471,752,000 495,417,200 523,176,920 555,786,212 594,144,753 639,325,133 692,606,732 755,516,306 829,876,619 917,864,699
TABLE 7: TOTAL OPERATING COSTS DISCOUNTED AT 10% TO THE BASE YEAR
Years Calculations (Rupees) 2008-2009 2009-2010 0 0 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 471,752,000*0.826446
495,417,200*0.751315
523,176,920*0.683013
555,786,212*0.620921
594,144,753*0.564474
639,325,133*0.513158
2016-2017 2017-2018 2018-2019 692,606,732*0.466507
755,516,306*0.424098
829,876,619*0.385543
2019-2020 917,864,699*0.350494
Present Value of Total Operating Cost Operating Cost (Rupees) 0 0 389,877,553 372,214,374 357,336,638 345,099,331 335,379,265 328,074,807 323,105,889 320,412,954 319,953,121 321,706,070 3,413,160,200
BENEFITS
Revenue Return per Annum = Rs 4,801,680,000 Gross Profit = Total Revenue Return per Annum Operating Cost Year 1 = Rs 4,801,680,000 - Rs 471,752,000 = Rs. 4,329.928,000 Present Value of Benefits = Rs 29,504,258,878
B/C Ratios, NPV and PBP
These values are computed. The BCR for the project came out to be 5.71 while NPV was Rs. 24,396,734,715. The PBP for this reference alternative turned out to be 0.40 implying that the investment can be recovered in less than half year.
ALTERNATIVE PROJECTS
Major factors that rendered the projects non-feasible were less tonnage of solid waste and cost of land [ ]. Here there was no problem of tonnage deficiency but cost of land was still an important factor. Thus alternative projects were designed with and without cost of land.
There are two norms to accommodate the impact of inflation on project appraisal. The first is based on the assumption that if the cost components undergoes an increase in price with the passage of time, the revenues also increase proportionately due to the proportionate increase in prices of the products. Thus the impact of inflation is nullified. It need not be studied. That is why alternatives were also designed by calculating operating cost with and without increase in salaries.
Finally, the price at which the power production companies sell to the government and distributing companies and the price that the end customer may be different. The enquiry revealed that it was almost half of the price per unit (Rs 3.25). Thus projects based on this sale price were designed and appraised. Similarly, the prices in 2010 are now almost double of the prices in 2008, the year in which study was carried out
TABLE 8: BASES AND REQUISITES OF DIFFERENT ALTERNATIVE PROJECTS
Alternative 1 s 237.500 Solid Waste /hr (m.ton) Cost of Included Land Future Salaries Price / kw Increased Rs. 6.50/ 2 237.500
Excluded Not Rs. 6.50
3 237.500
Excluded Rs. 6.50
4 237.500
Excluded Increased Not Rs. 6.50
5 237.500
Included Increased Increased Increased Increased Rs. 4.00
6 237.500
Excluded Rs. 4.00
7 237.500
Included Rs 12 8 237.500
Excluded Rs. 12
TABLE 9: COMPUTATION OF RESULTS OF EVALUATION OF ALTERNATIVES
Alt PV of Benefits Rs.
PV of Costs Rs.
B/C 1 29,566,234,915 5,169,500,200 5.71
2 29,566,234,915 4,655,053,187 6.35
3 29,566,234,915 5,069,500,200 5.83
4 29,566,,234,915 4,555,713,187 6.48
5 18,218,443,038 5,169,500,200 3.52
NPV (Rs.) Initial Investment-Rs Gross Profit (Rs) PBP (Years) 24,396,734,7151,756,340,000 24,911,181,728 1,756,340,000 24,496,734,7151,656,340,000 25,010,521,7281,656,340,000 13,048,943,8381,756,340,000
6
18,218,443,038 5,069,500,200 3.59
13,148,943,8381,656,340,000 7 54,531,377,042 5,169,500,200 10.54
49,361,876,8421,756,340,000 8 54,531,377,042 5,069,500,200 10.75
49,461,876,8421,656,340,000 4,329,928,000 0.41
4,329,928,000 0.41
4,329,928,000 0.38
4,329,928,000 0.38
2,483,128,000 0.70
2,483,128,000 0.66
8,392,888,000 0.20
8,392,888,000 0.19
RESULTS
Results are reported in two parts: the general information gathered from interviewees about Lahore waste and its disposal is reported in part 1 as descriptive research and the results of cost analysis are reported in part 2.
RESULTS OF THE COST ANALYSIS
Benefit to Cost Ratio is one of the important criteria for grading a project as non-profitable, profitable or socially acceptable. The decision rule is that if it is more than 1, the project is profitable and thus acceptable and if it is less than 1, it is non profitable and thus not acceptable. Similarly for Net Present Value or NPV of the Project the decision rule is that the project is acceptable if NPV is positive and if negative, then project is rejected. In both cases, the project is rejected if it does not fall in the category of some social obligation. If so, entrepreneur has to accept it on expectation of subsidy from a sponsoring agency such as government or a social welfare organization.
Payback period (PBP) tells the time in which initial investment will recover: shorter the time period, quicker is the recovery of investment in a project. A long payback period is not desirable.
Alternative 1 (With Land): The BCR in Alternative 1 is 5.71, the NPV is Rs. 24,396,734,715 while Payback Period is 0.41 Years, Thus, the Benefit Cost Ratio (BCR) is far above 1 and the Net Present Value (NPV) is also highly positive along with a very shorter payback period. This means that this alternative is fully feasible.
Alternative 2 (With Land but Without Increase in Salaries): The BCR in this alternative is 6.35; NPV is Rs 24,911,181,728 and payback period: 0.41 Years. As the values of deciding factors don’t differ significantly from Alternative 1, the increase in salaries over future years has a minor effect. The BCR still comes out to be above 1 and the NPV is also positive. The PBP remains the same as that in Alternative 1. Thus this alternative is also feasible. Alternative 3 (Without Land): The BCR in Alternative 3 is 5.83, NPV Rs 24,496,734,715 and the PBP is 0.38 Years. The BCR and NPV have undergone a small increase by exclusion of cost of land from initial fixed investment. The results of this alternative are also similar to those in Alternatives 1 and 2. The PBP is also shorter and thus this alternative is little better than Alternative 1. Less difference may be due very high cost of machinery and equipment as compared to land and also inclusion of high cost and cost of fuel used to run fifty trucks around the year.
Alternative 4 (Without Land and Without Increase in Salaries): The BCR in Alternative 4 is 6.48, the NPV Rs 25,010,521,728 where as the PBP is 0.38 Years. The BCR is still above 1 and NPV is also positive. The PBP is same as in Alternative 3. So after excluding the cost of land from expenditure stream of project and without increasing salaries of the labor this project becomes more profitable than a similarly evaluated with land and without increase in salaries Alternative 2.
Alternative 5 (Decrease in Price of Electricity to Rs. 4/Kw and With Increase in Salaries): This alternative was designed to check the feasibility in case the producer of electricity has to supply to WAPDA the power distributor in Pakistan at lower price (Rs 4 in 2008) for onward supply to the consumer at higher price than was Rs 6.50. The revenue will reduce accordingly to a little more than half of that collected in the Alternative 1. The values will also reduce and thus the BCR in this alternative is 3.52; the NPV is Rs. 13,048,943,838 whereas PBP is 0.70 years. The Benefit /Cost is still very good and it’s above 1 and the Net Present Value (NPV) is also positive. So even after decreasing the price of electricity to Rs. 4 /KW, the project is still profitable.
Alternative 6 (Decrease in Price of Electricity to Rs. 4/kW Without Increase in Salaries): This alternative is similar to Alternative 5 with the difference that salaries were not increased as done in Alternative 3 and 4, The BCR in Alternative 6 is 3,89. the NPV is Rs. 13,148,943,838 while PBP is 0.66 Years, This alternative is slightly better than Alternative 5.
Alternative 7 (Decrease in Price of Electricity to Rs. 12/kW and With Increase in Salaries): This alternative was designed to fit the project in the current market scenario of electricity. The prices have almost doubled as compared to those in 2008. That is why the revenue return has been calculated at the cost of Rs.12/kW as compared to Rs 6.50/kW. The revenue will increase accordingly and will be almost double of that collected in Alternative 1. The values will also reduce and thus the BCR in this alternative is 10.54; the NPV is Rs. 49,361,876,842 whereas PBP is 0.20 years. The Benefit /Cost is very good and ils doubled 1 and the Net Present Value (NPV) is also positive. So much so after increasing the price of electricity to Rs.12 /kW, the the project is highly feasible with profit almost double that in Alternative 1. An excellent display of the evaluation of this project is that the investment is fully recovered within two three months Alternative 8 (Increase in Price of Electricity to Rs. 12/kW Without Increase in Salaries): This alternative is similar to Alternative 7 with the difference that salaries were not increased as done in Alternative 3,4 and 6. The BCR in Alternative 6 is 10.75, the NPV is Rs. 49,461,876,842, while PBP is 0.19 Years, This alternative is slightly better than Alternative 7.
DISCUSSION
The main objective of work reported here was safe and techno-economic disposal of Lahore’s solid waste and study of feasibility of production of thermo-electric power from its biomass content. To that end, basically a primary project was planned and appraised. The results of this appraisal were highly promising. The BCR in Alternative 1 was 5.71, the NPV was Rs. 24,396,734,715 while PBP was s 0.41 Years, The BCR was far above 1 and NPV) was also highly positive along with a very short PBP. This means that the feasibility of project was beyond any doubt. This result is very different and highly distinguished from the recently reported results of the studies on different educational institutions of Lahore [3]-[4], [32]-[33]. Out 4, production of thermoelectric power in all was not feasible if the cost of land was included in the expenditure stream. If the cost of land was excluded, it turned out to be non-feasible in three LSE, KC and LUMS and marginally feasible in GCUL. Major factors that rendered the projects non-feasible were the high cost of land due to institutions being located in expensive area such as posh colonies or near commercial centers and tonnage of the solid waste produced per annum. That is why alternative projects based on cost exclusion and increase in tonnage were constructed and subsequently appraised to pull the projects towards feasibility. The changes qualified the alternatives but generally on marginal basis. Here the results are distinguished in the sense that the primary project designed on the basis of large tonnage of waste produced in Lahore which was 5,700 m ton per annum or 435.5 m ton/hr. Thus, the projection based on such a large quantity of solid waste was free from the tonnage constraint. The constraint due second major factor the cost of land was also eliminated due selected location being out of Urban Lahore such as Rai Wind Road where some agriculture land could be purchased at cheaper price (Rs 20 million for 4 Acre) which for GCUL as an example may be the price 0.12 Acre. That is why BCR turned out to be manifold in case of Urban Lahore and NPV very high between 20 t0 25 million rupees. The most attractive facet of this evaluation is very small PBP even less than half year which in some previously reported cases was even infinite which means that investment cannot be recovered at all.