in power plants opportunities for

Powergen Asia 2002Powergen Asia 2002 11

IMTE AG IMTE AG SSWITZERLANDWITZERLAND

&&CCONNECONNEC--T ST SDNDN BBHDHD

MMALAYSIAALAYSIA

SOUTHEAST ASIA REGIONSOUTHEAST ASIA REGIONININ

POWER PLANTSPOWER PLANTSOPPORTUNITIES OPPORTUNITIES FORFOR BIOMASSBIOMASS

PPOWERGENOWERGEN AASIASIA 200220022. 2. -- 4. O4. OCTOBERCTOBER 20022002

SSINGAPOREINGAPORE

Miro R. SustaMiro R. SustaMiro R. Susta Tan Cheng HuatTan Cheng HuatTan Cheng Huat


Palm Oil ProductionPalm Oil Production


-15.42-17.60MJ/kgLow calorific value

18.3816.6820.7718.90MJ/kgGross calorific value

-9.1-9.0%Moisture

3.273.00.750.7%Ash

13.3312.121.219.3%Fixed carbon

83.475.878.0571%Volatile matter

Dry-FiberFiberDry-Shell ShellUnit

6.035.52----60

8.167.54----50

--9.18.37--40

--11.3510.78--30

--18.8417.2520

18.8417.5820.7219.6820.9320.7210

OilyPureOilyPureOilyPure( % )

Bunch stalkFiberShellMoisture

Industrial Analysis of Mill Oil Palm Waste

Moisture Content (%) and Low Calorific Value of Mill Oil Palm Waste (MJ/kg)

Oil Palm Biomass Waste Specifications


Problem??Problem??


CO ECO EMISSIONS PER MISSIONS PER CCAPITA IN APITA IN SSELECTED ELECTED CCOUNTRIESOUNTRIES

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000Year

Ton

s / C

apita

/ Ye

ar

Thailand Vietnam Malaysia Philippines Indonesia


Solution?Solution?

Yes!Yes!Please follow Please follow carefully this carefully this presentation.presentation.


EENERGY NERGY PPOTENTIAL OF OTENTIAL OF BBIOMASS IOMASS WWASTE ASTE FFUELSUELSININ SSOUTHEASTOUTHEAST AASIASIA

0

10

20

30

40

50

%

% 22 24 27 42 45

Thailand Indonesia Malaysia Philippines Vietnam


BBIOMASS IOMASS EENERGY NERGY CCONSUMPTION IN SELECTED ONSUMPTION IN SELECTED

CCOUNTRIESOUNTRIES

0

2000

4000

6000

8000

10000

12000

Mio

GJ

Mio GJ 117 315 478 605 1758 2623 3671 5196 11092

Malaysia Viet nam Phi l ippines Thai land Indonesia China IndiaRest of

AsiaAsia Tot al


PPRICERICE CCOMPARISONOMPARISON

0

100

200

300

400

500

600

700

%

% 100 130 170 330 500 650

Coal CCGT Biomass Nuclear Wind Solar


MalaysiaMalaysia


OIL PALM WASTE ENERGY POTENTIAL IN MALAYSIA

Processing of 42 Mio Tons

Fresh Fruit Bunches leave behind approximately

16 Mio Tons of Biomass Waste each Year






Possible Diesel Oil Saving :

3 Mio Tonsequivalent to

23 Mio barrelsper Year


TTYPICALYPICAL PPROJECTROJECT TTIMEIME SSCHEDULECHEDULE

3.53.53.53.500Basic engineering & main equipment selectionBasic engineering & main equipment selection

DurationDuration

(Months)(Months)

Lead Time Lead Time EndingEnding(Month)(Month)

Lead Time Lead Time StartingStarting(Month)(Month)

ActivityActivity



556622Detail engineering Detail engineering


DurationDuration

(Months)(Months)



ActivityActivity



1414151522Main equipment manufacturing & delivery to siteMain equipment manufacturing & delivery to site



DurationDuration

(Months)(Months)



ActivityActivity



1010121233BOP equipment manufacturing & delivery to siteBOP equipment manufacturing & delivery to site




DurationDuration

(Months)(Months)



ActivityActivity



1010151566Site construction & erection worksSite construction & erection works





DurationDuration

(Months)(Months)



ActivityActivity



1115151515Interconnection to TNB distribution networkInterconnection to TNB distribution network






DurationDuration

(Months)(Months)



ActivityActivity



5518181414Commissioning & testingCommissioning & testing

1115151515Interconnection to TNB distribution networkInterconnection to TNB distribution network






DurationDuration

(Months)(Months)



ActivityActivity


Estimated Quantity of Biomass Waste necessary for 10 MW Power Plant.



Fresh Fruit Bunches (FFB) contain approximately 21 % palm oil, 6-7 % palm kernel. The resulting waste together with fiber and shells amounts to 42 % ofthe FFB.



Fresh Fruit Bunches (FFB) contain approximately 21 % palm oil, 6-7 % palm kernel. The resulting waste together with fiber and shells amounts to 42 % ofthe FFB. For low-pressure systems an energy conversion rate of 2.5 kg of palm oilwaste material per kWh is assumed. 2.5 kg/kWh means 25 tons/hr for 10 MW power plant.



Fresh Fruit Bunches (FFB) contain approximately 21 % palm oil, 6-7 % palmkernel. The resulting waste together with fiber and shells amounts to 42 % ofthe FFB. For low-pressure systems an energy conversion rate of 2.5 kg of palm oilwaste material per kWh is assumed. 2.5 kg/kWh means 25 tons/hr for 10 MWpower plant.

Supporting Figures Power Plant Gross Output P = 10 MW Power Plant Gross Efficiency η = 25% Power Plant Energy Input QIN = 40 MW Fuel Low Heating Value Hu = 10’018 MJ/ton Theoretical Fuel Consumption Fth = 40/10’180 *3600= 14.14 tons/hr Safety Margin for Drying SM = 35% Expected Fuel Consumption FC = 14.14/0.65=21.75 tons/hr Palm Oil Waste (POW) from FFB POW = 30% POW from 40 tons/hr PO Mill POW1= 40*0.30=12.0 tons/hr Mill Operating Hours/Day OHM = 16 Daily POW Production DPOW = 16*12.0=192 tons/day Real Plant Consumption FCR = 0.8*25*24=480 tons/day Number of 40 ton/hr Mills/Plant NMills = 480/92=2.5


MMODULARODULAR DDESIGNESIGN CCONCEPTONCEPT


AssumptionsAssumptions

Total Investment CostsTotal Investment Costs 12.5 Mio US$12.5 Mio US$



Total Investment CostsTotal Investment Costs 12.5 Mio US$12.5 Mio US$Net CapacityNet Capacity 10 MW10 MWCapacity FactorCapacity Factor 80 %80 %Power Plant AvailabilityPower Plant Availability 87.587.5



Total Investment CostsTotal Investment Costs 12.5 Mio US$12.5 Mio US$Net CapacityNet Capacity 10 MW10 MWCapacity FactorCapacity Factor 80 %80 %Power Plant AvailabilityPower Plant Availability 87.587.5PPA PeriodPPA Period 21 years21 yearsPPA TariffPPA Tariff 0.0442 US$/kWh0.0442 US$/kWh



Total Investment CostsTotal Investment Costs 12.5 Mio US$12.5 Mio US$Net CapacityNet Capacity 10 MW10 MWCapacity FactorCapacity Factor 80 %80 %Power Plant AvailabilityPower Plant Availability 87.587.5PPA PeriodPPA Period 21 years21 yearsPPA TariffPPA Tariff 0.0442 US$/kWh0.0442 US$/kWhDebt Repayment PeriodDebt Repayment Period 12 years12 yearsDeveloper’s EquityDeveloper’s Equity 25 %25 %Interest RateInterest Rate 6.5 %6.5 %



Total Investment CostsTotal Investment Costs 12.5 Mio US$12.5 Mio US$Net CapacityNet Capacity 10 MW10 MWCapacity FactorCapacity Factor 80 %80 %Power Plant AvailabilityPower Plant Availability 87.587.5PPA PeriodPPA Period 21 years21 yearsPPA TariffPPA Tariff 0.0442 US$/kWh0.0442 US$/kWhDebt Repayment PeriodDebt Repayment Period 12 years12 yearsDeveloper’s EquityDeveloper’s Equity 25 %25 %Interest RateInterest Rate 6.5 %6.5 %Construction PeriodConstruction Period 18 Months18 MonthsFuel PriceFuel Price 0.19 US$/GJ0.19 US$/GJ


Project Net Present ValueProject Net Present ValueNet Present Value / IRR

-20.0-10.0

0.010.020.030.040.050.060.070.080.090.0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16Discount Rate (%)

Mio

RM


Project Net Present ValueProject Net Present ValueNet Present Value

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16Discount Rate / IRR (%)

NPV

Mio

US$

IRR=13.5%


MMAJORAJOR PPROJECTROJECT RRISKISK AASPECTSSPECTS

COMPLETION TIMECOMPLETION TIME DDelays in construction will result in delays in operations.elays in construction will result in delays in operations.CONSTRUCTION COSTCONSTRUCTION COST Construction cost will exceed the projections.Construction cost will exceed the projections.PERMITING & APPROVALSPERMITING & APPROVALS Delay in issuance of certain permits and approvals.Delay in issuance of certain permits and approvals.PROJECT PERFORMANCEPROJECT PERFORMANCE The completed power plant will not perform as guaranteed.The completed power plant will not perform as guaranteed.TECHNOLOGYTECHNOLOGY Applied technology will fail causing additional replacement costApplied technology will fail causing additional replacement costs. s. MARKET DEMAND & PRICEMARKET DEMAND & PRICE Increased competition in the power industry reduces power Increased competition in the power industry reduces power

demand.demand.ENERGY DISPATCHENERGY DISPATCH Power plant dispatch at a low level.Power plant dispatch at a low level.OPERATION & MAINTENANCEOPERATION & MAINTENANCE O & M costs will exceed projections.O & M costs will exceed projections.BIOMASS FUEL SUPPLYBIOMASS FUEL SUPPLY Unreliable fuel supply.Unreliable fuel supply.BIOMASS FUEL PRICEBIOMASS FUEL PRICE Increases in the price of oil palm biomass waste.Increases in the price of oil palm biomass waste.EQUIPMENT BREAKDOWNEQUIPMENT BREAKDOWN Unexpected failure of certain equipment.Unexpected failure of certain equipment.ENVIRONMENTALENVIRONMENTAL Adoption of new laws or regulations, or changes in the interAdoption of new laws or regulations, or changes in the inter--

pretationpretation or application of existing laws or regulations.or application of existing laws or regulations.INFLATIONINFLATION Revenues may not be sufficiently adjusted to compensate for Revenues may not be sufficiently adjusted to compensate for

inflation in operating costs.inflation in operating costs.EXCHANGE RATESEXCHANGE RATES Project capital and operating costs may be in foreign currenciesProject capital and operating costs may be in foreign currencies, ,

the financing and revenues for the Project are in local currencythe financing and revenues for the Project are in local currencyFORCE MAJEUREFORCE MAJEURE The Investor may be subject to certain additional costs.The Investor may be subject to certain additional costs.


SSUMMARYUMMARY && CCONCLUSIONS ONCLUSIONS –– AABBIOMASSIOMASS UUTILIZATIONTILIZATION AASPECTSSPECTS

Biomass includes all kind of wet and dry agricultural byBiomass includes all kind of wet and dry agricultural by--products, products, forestry wood waste products and also including residues;forestry wood waste products and also including residues;Biomass has the potential to Biomass has the potential to sustainablysustainably provide a major proportion of provide a major proportion of the primary global energy supply;the primary global energy supply;Biomass is a renewable source of energy; its use does not contBiomass is a renewable source of energy; its use does not contribute ribute to global warming;to global warming;Biomass fuels have negligible Biomass fuels have negligible sulphursulphur content and therefore do not content and therefore do not contribute to sulphur dioxide emissions, which cause acid rain;contribute to sulphur dioxide emissions, which cause acid rain;The combustion of biomass generally produces less ash thaThe combustion of biomass generally produces less ash than coal n coal combustion, and the ash produced can be used as a soil additive;combustion, and the ash produced can be used as a soil additive;Biomass is a domestic resource, which is not subject to worBiomass is a domestic resource, which is not subject to world price ld price fluctuations or the supply uncertainties of imported fuels;fluctuations or the supply uncertainties of imported fuels;An exciting alternative economic model promises a better lifAn exciting alternative economic model promises a better life everye every--where without destroying the earth's natural support systems;where without destroying the earth's natural support systems;The new economy will be not powered by fossil fuels, but by The new economy will be not powered by fossil fuels, but by various various sources of wind energy, solar energy (where also biomasssources of wind energy, solar energy (where also biomass energy energy belongs to) and hydrogen;belongs to) and hydrogen;


SSUMMARYUMMARY && CCONCLUSIONS ONCLUSIONS –– BBBBIOMASSIOMASS PPOWEROWER PPLANTLANT DDESIGNER’SESIGNER’S AASPECTSSPECTS..

Work closely with a few number of larger biomass suppliers Work closely with a few number of larger biomass suppliers rather than a large number of small suppliers;rather than a large number of small suppliers;Be aware that biomass waste do not "travel well,“ and Be aware that biomass waste do not "travel well,“ and require special fuel handling systems;require special fuel handling systems;Know that when purchasing biomass, the moisture content Know that when purchasing biomass, the moisture content and the calorific value must be accounted for;and the calorific value must be accounted for;Be careful in accepting resource assessment studies, which Be careful in accepting resource assessment studies, which promise huge supplies of biomass. There is a big difference promise huge supplies of biomass. There is a big difference between promised gross volumes and what is economically between promised gross volumes and what is economically viable to recover and use;viable to recover and use;Locate the new biomass waste fired power plant as much Locate the new biomass waste fired power plant as much as possible near by the biomass waste source and close to as possible near by the biomass waste source and close to the power distribution network.the power distribution network.


SSUMMARYUMMARY && CCONCLUSIONS ONCLUSIONS –– CCEEXPECTATIONSXPECTATIONS FROMFROM GGOVERNMENTALOVERNMENTAL AAUTHORITIESUTHORITIES

Grant full support to new biomass based power generation Grant full support to new biomass based power generation projects; projects; A forwardA forward--looking and committed national power distribution looking and committed national power distribution companies management;companies management;Ensure guaranteed access for electricity generated in biomass Ensure guaranteed access for electricity generated in biomass fueled power plant to the national power distribution network;fueled power plant to the national power distribution network;To streamline and simplify administrative procedures for thTo streamline and simplify administrative procedures for the e installation of biomass fueled power plants;installation of biomass fueled power plants;Ensure that the calculation of tariffs for connecting biomEnsure that the calculation of tariffs for connecting biomass ass waste fueled power plants to the national grid are fair and nonwaste fueled power plants to the national grid are fair and non--discriminatory;discriminatory;Introduce a bonus system for surplus production;Introduce a bonus system for surplus production;Provide clear and concise information to the general public and Provide clear and concise information to the general public and producers about the environmental and economic costs and producers about the environmental and economic costs and benefits of new biomass based power generation technology.benefits of new biomass based power generation technology.

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