Development of Small Scale Biomass Based Distributed Power Generation in Rural Areas

By

Dr G C Datta Roy

Presented at Seminar on

“Policy Incentives for IPPs and Investors for Wind and Biomass Power Generation”

Organized by IPPAI

N Delhi

17th Dec, 2009

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About Ourselves

10 Year old BEE rated grade 1 ESCO working globally in the area of energy efficiency & renewable energy

Consulted & engineered over 200 biomass energy projects globally with aggregate capacity over 500 MW

Proud to announce that from 14th Dec, 2009, we have become part of global energy services major, Dalkia Group

Roadmap of Presentation

Sustaining biomass IPP business-critical success factors

Competitive use of biomass & fuel security

Tariff & impact

Plant technology & heat rate

Operating PLF

Brief review-economics of biomass IPP

Last mile DG system-options & issues

Technology options

Challenges-small scale biomass IPP

Some policy recommendations

Conclusions

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Sustaining Biomass IPPs-CSF

Biomass sources & security Agro-industrial by-product Agro-waste Forest waste Competitive use Price at source Logistics

Technology Capital Cost Tariff Operating PLF Despatch PLF

Surplus availability for IPP would bemainly from agro & forest waste in futurecompetitive use of biomass would be criticalFactor driving sustainability

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Competitive use of biomass -Rajasthan

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Competitive use of biomass -Maharashtra

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Competitive use of biomass -Chhattisgarh

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Competitive use of biomass- Punjab

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Summary- Competitive use of biomass

States Rajasthan Maharashtra Chhattisgarh Punjab

Different Uses of Biomass % % % %

Fodder 59.88 44.15 64.27 56.51

Domestic Fuel 11.43 8.64 0 3.68

Biomass Based Power Plant 3.2 8.42 18.41 5.64

Brick Kilns 3.04 1.79 1.24 0

Mulching 5 0.41 4.2 1.79

Thatching 2.35 0.28 3.5 0.89

Cement 0 1.25 1.06 0

Oil Mills 6.86 20.02 0 0

Export to other Power Plants outside catchment area 1.37 0 0.53 0

Export outside catchment area 2.29 10.4 0 17.03

Import from outside area 0 0 5.08 0

Left in Field 4.57 0 0 12.5

Other local industries using biomass 4.64 0 1.72 1.96

The drawl by power plant in Chhattisgarh is around 18% and is facing problems of biomass shortage.

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Competitive PressureCaptive use

FiberIndustrial fuel

Fuel for IPP

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Summary- Economic Analysis of Competitive use of biomass

Next to captive, highest value as fiber

Both brick kilns and cement mills can offer higher price by as much as 25% considering coal price parity

However, drawl by these industries is not significant and as such do not appear to be competitive threat to biomass based power plants

Oil mills can offer much higher price-in fact here they have opportunity of higher value realization by installing mini cogeneration power plants and export small quantity of power to the grid-this would provide the highest value realization from biomass

Finally price parity would be governed by coal price parity

However, at tail end competitive pressure would be lot less

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Summarizing

Highest value realization from captive consumption for fodder-this is likely to remain at the present level in the foreseeable future

There can be some reduction in captive consumption as fuel with increased access to commercial fuel

Under all conditions, available fuel for power generation is likely to range from 10 to 12%

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Tariff & Impact

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Plant Technology & Heat Rate

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Gaps in CERC Regulations on Biomass Based Power Generation

State Regulatory Commissions order no and date Station Heat rate (kCal/Unit)

CERC Order Dated 16.9.2009 3800

Andhra Pradesh ERC Order Dated 31.03.2009 3700

Tamilnadu ERC Order 2009 Dated 27.04.2009 3840

Maharashtra ERC Order 2009 Dated 25.03.2009 3650

Uttar Pradesh ERC Order Dated 18th July 2005 4350

Chhattisgarh ERC Order Dated 15.1.2008 4047 given in 11.11.2005 reduced to

3800

Gujarat ERC Order 2009 Dated 17.08.2007 4290

Bihar ERC Order 2009 Dated 21.05.2009 3650

No standardized station heat rate for biomass based power plant Station heat rate not defined at different power generation capacities as defined in case of coal. Station heat rate for biomass based power plant is a function of type of biomass and type of technology.

Corresponding thermal efficiency-20 to 25%Only possible with bagasse & husk fuels & not agro-residue

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Capital Cost

CERC order dated 17th Sept 2009 Rs.4.50 Cr/MW

Rajasthan Order 2009- Dated 17.08.2009 Rs.5.40 Cr. Per MW-WCC

Rs.5.85 Cr. Per MW- ACC

MPERC Order Dated 07.08.2007 Rs. 4.25 Crs. per MW

Andhra Pradesh ERC Order 2009 Dated 31.03.2009 Rs. 4.00 Crs. per MW

Haryana ERC Order Dated 15.05.2007 Rs. 4.29 Crs. per MW

Tamilnadu ERC Order 2009 Dated 27.04.2009 Rs. 4.87 Crs. per MW

Maharashtra ERC Order 2009 Dated 25.03.2009 Rs. 4.00 Crs. per MW

Karnataka ERC Order Dated 18.01.2005 Rs. 4.00 Crs. per MW

Uttar Pradesh ERC Order Dated 9th Sept 2009 Rs. 4.13 Crs. per MW

Chhattisgarh ERC Order Dated 15.1.2008 Rs. 4.00 Crs. per MW

Gujarat ERC Order 2009 Dated 17.08.2007 Rs. 3.50 Crs. per MW

Bihar ERC Order 2009 Dated 21.05.2009 Rs. 4.25 Crs. Per MW

For difficult to handle biomasses like straw and stalks,

cost would be 15 to 20% higher

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Financial and Economic Viability of a typical biomass power project

The power plants are operating in a very constrained environment. Any unpredictable variations will make the project unviable.

Increase in capital cost of project can be reduced by faster financial closure of project and getting statutory approvals in time

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Appropriate sizing of power plant for sustainability

Analysis of operation of the eight power plants makes the following interesting revelations:

All the plants, which are using fuel upto 10% of the overall available biomass are operating at over 80% PLF

Plants in Chhattisgarh using over 15% available biomass are facing problems

From delivered cost perspective too, if the collection distance is maintained at less than 15 KM, overall financial performance would be good.

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Different Plant configuration-Capacity Wise

S.NoTransportation

CostUnits Value Fuel Cost

% Contribution

Total Biomass

Requirement (MT) at 80%

PLF

Power potential in rich states

(MW)

Power potential in lean states (MW)

1 Upto 15 KM Rs./MT 96 1200 8%

13500-18000 (Rich States)9000-11700

(Lean States)

1.5-2 1-1.3

2 Upto 35 KM Rs./MT 156 1200 13%

72000-108000

(Rich States)45000-63000(Lean States)

8-12 5-7

3Upto 50 KM &

aboveRs./MT 216 1200 18%

144000-216000

(Rich States)90000-126000

(Lean States)

16-24 10-14

Keeping in consideration the long term fuel scenario and maintaining the transportation cost less than 10%,

the optimal power plant capacity is in the range1-2 MW

Case for mini IPPs as DG system

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Last Mile DG Model-Issues

Technology

Project capital cost

Specific fuel consumption

Operational PLF

Energy tariff

Open access charges

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Technology Evaluation

Combustion Technology

Advantages: Least expensive

(Rs. 4.5 – 5.0 Crs./MW) for larger plant

Most straightforward & most commonly applied

Higher PLF

Disadvantages: Less fuel flexibility More requirement of pollution

control measures Technology for small scale plant to

be developed-higher development cost

Gasification TechnologyAdvantages: Micro model (30 KW to MW)

possible

Operation relatively simple

Disadvantages: Higher capital cost Lower efficiency Under development

technology Difficult to achieve PLF above

50% Grid connectivity

Better grid connectivity & possibility of using learning from existing larger plants for scaling down offernew opportunity for development of 1-2 MW

small IPP as last mile DG plants

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Capital cost

Technology Configuration Cost (Rs Crs/MW)

Combustion-normal IPP > 5 MW 4-4.5

Combustion-DG IPP 1-2 MW 6-6.5

Gasification 30 KW to 1 MW 3.5-4.5

Highest cost for small DG IPP

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Pressure & Temperature Configuration

For 1-2 MW biomass based power plant, the possible steam-temperature configurations are :

45 ata, 440 ºC

67 ata, 440 ºC

Capital cost tends to increase sharply over 45 ata

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Smaller Plant-Inherently Lower Efficiency

0.35 kg/kg of steam

2.9 kg/kg of fuel

Fuel Consumption per hour 2.38 TPH

Fuel Consumption per day 57.08 TPD

Fuel cost of steam generatiom 626.93 Rs./Ton

Specific fuel Consumption 1.89 kg/kwh

Vent Loses @ 0.5 % of I/L steam 3.1 kg/hr Steam to Ejector

& Gland Sealing

1.2 105

0.003 641 45.0 440

0.3 789

DP

5.0 35 D/A op. press. 1.1 bar(a) DT

0.231 35

Hin 726 45.0 440

Hout 726 6.8 789

1.3 105

6.90 105

48.0 105

6.90 106

47.0 259

0.068 668

1.0 %

6.0 49

6.06 49

7.0 44

5.86 44

99.0

Blow down

Condensate recovery

Fuel Consumption

Steam raising ratio

Cost of Generation

HMBD (WITH CLOSED COOLING WATER CIRCUIT)

Boiler

Deaerator

CEP

Ejector Condensorr/GVC etc

FWP

Overall thermal efficiency <15%

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Operational PLF

Technology impact

Multi fuel technology to be developed

Grid interface system to be developed

No standby equipments to keep capital cost low

System operation impact

Rostering of rural feeders

Regulatory impact

Despatch priority

Whereas technology risk has to be borne by the developer,

support required for other areas

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Energy tariff

Energy feed to villages

To panchayat-small part at concessional rate to get cooperation

Agriculture-at ? rate

Rural household at utility rate

Rural commercial at commercial rate

Export

PPA rate

Traded rate

Policy development necessaryfor determination

of remunerative feed in tariff

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Open access charges

What components Transmission

Distribution

Losses

Despatch

Cross subsidy

Others

Should tail end DG systembe subjected to payment of

OA charges ?

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Last Mile DG System-Opportunity for Reducing T&D Losses

States Transmission loss-%

Distribution loss-%

Total T&D loss

%

Andhra Pradesh 4.27 15.48-18.3 20-25

Bihar - 41.4 41

Chattisgarh 5.01 29.37 34

Gujarat 3.85 15.45-32.8 20-35

Karnataka NA 15-32.07 20-35

Madhya Pradesh 3.79-5.09 27.4-32.84 31-38

Maharashtra NA 29 34

Rajasthan 4.5 33-38 37-42

Last mile DG can make significantImpact on reducing T&D loss

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Summarizing

Strong case for development of last mile grid connected biomass DG system (1-2 MW)

Requires policy support during the development phase

Financial subsidy Capital or

Generation based

Different tariff structure & rate considering partnership with rural community

Preferential Despatch

Liberal grid connectivity-utility investment support Freedom from rostering

Liberal open access-capacity & charges Exemption from distribution charges & cross-subsidy

Thank You