Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
Executive Summary The study on biomass resources management for alternative energy aims to evaluate the existing potential of biomass resources, investigate all opportunities and capabilities in collecting biomass for both electricity and heat generation, and assess the viability of biomass project investment as well as its economic, social, and environmental benefits. In order to enhance biomass market in the future, the study also provides policy recommendations on managing biomass resources, and explores all technologies for biomass conversion. All outcomes of the study are summarized as follows.
1. Biomass Status in Thailand
1.1 Rice Rice is the crop with the maximum cultivated areas covering every region of Thailand. The agricultural residues or biomass left after harvesting are husk, straw, and stalk. Rice husk shares 21% of the total rice production. Rice husk is normally used as a fuel in milling process, while some is sold to biomass power plant. Its cheap price leads to rising demand in other industries. Therefore, only 0.57% of rice husk is non-utilized. Straw shares 49% of the total rice production. Its use for electricity generation is only 0.12% while no use in other industries and about 50% is utilized for agricultural purpose. It is estimated that the 29% of rice straw is left, which can be converted to 57,210.10 TJ or 1,366.18 ktoe. 1.2 Sugarcane There are 6.3 million-rai cultivated areas of sugarcane in Year 2006/07. These areas are in the Central, the Northeast, and the North, while no cultivated areas of sugarcane in the South. Its wastes convertible to energy are bagasse, sugarcane tops and leaves. Bagasses are the residues from milling process. Currently, almost 100% of bagasse is used as a fuel necesssary for sugar production. The excess are sold to paper industry, particle board manufactures, or power plants. This implies all bagasse are used up. Sugarcane leaves and tops are agricultural wastes left on the farm after harvesting. Sugarcane leaves and tops are partly used as animal feed, fertilizer, and ground covering material, accounting for 10-30%, whereas the rest of 70-90% is left in the farm before being burnt and cut down. If there are good management and collection systems suitable for cultivated areas, leaves and tops can add 2,225.89 ktoe to biomass potential. 1.3 Cassava rhizome Cultivated areas of cassava are scattering. The key area is in Nakhon Ratchasima. Biomass from cassava is its rhizome, stalk, tops, and leaves. Almost 100% of rhizome is not utilized, but left in the plantation before burnt or ploughed up and over. The survey found that 0.9% of rhizome is used as fuel in the East. It is estimated that 66% of rhizome can be converted into fuels, accounting for 19,508.39
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level TJ or 465.86 ktoe. About 14% of stalks, tops and leaves are collected by the crop growers for replanting, about 43% are left in the farm or burnt, and the rest are ploughed up and over for fertilizer. The burnt or left portion can be converted to energy about 2,241.7 ktoe. 1.4 Corn Biomass from corn is corncob, corn stalks, tops, and leaves. Corncob is used as fuel, raw material for producing alcohol, and ingredient of animal feed. The remaining can be converted to energy, accounting for 5,568.83 TJ or 132.98 ktoe. Only 10% of stalks, tops, and leaves are utilized as fertilizer, fuel, and animal feed. Small amounts are used as fuel because of difficulties in storage and collection. To apply them for energy use, appropriate collection method must be found. 1.5 Oil Palm Key cultivated areas of oil palm are in the South. Its residues convertible to energy are empty fruit bunch (EFB), shell, and fiber. All are left from extraction process. The shares of EFB, shell, and fiber are 32%, 4%, and 19%, respectively. At present, all fiber are used as fuel for both heat and electricity generation in palm mill and fertilizer, while shell are sold for fuel in other industries, or raw material for activated carbon, and only 20 – 30% are left. It is found that 5% of EFB is used as fuel in the palm mill and 37% in biomass power plant. Some are used for agricultural purpose, i.e. fertilizer and mushroom cultivation. The remaining, accounting for 38%, can be converted to 134.34 ktoe. All palm leaves are not utilized, but left to decay in the East. In the South, however, small amounts are used for animal feed, while most are left to decay for fertilizer. It is about 5% of palm leaves are utilized, while the left, accounting for 95% can be converted to energy. 1.6 Rubber Rubber trees are brought to lumber process the most. 80% of their cultivated areas are in the South. The residues from cutting down the rubber trees are roots, twigs, and stems, left in the plantation, while the residues from the sawmill and furniture are sawdust and woodchip. Roots and small branches, left in the plantation, are less than 40% of the total rubber trees. It is difficult to collect them for using as fuel in thermal process; hence, the agricultural workers prefer to burn them or use the small twigs that can be easily bundled to use as raw material in the charcoal process. It is estimated that the energy potential of slabs and chips equals to 6,710.77 TJ or 160.25 ktoe. For the residue in the sawmill process, either slab, or saw dust or wood shavings are used as fuel in the mill itself and some are sold as fuel or as for plywood and charcoal process. Such residues from the furniture factory are all used up so that their potential for energy generation is almost impossible. However, there is, in some areas, trade of rubber roots, accounting for 5% of total roots, for using as fuel in industrial sector. These roots are needed to be cleaned up before trading. The potential energy extracted from roots is equivalent to 6478.90 TJ or 154.72 ktoe.
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level Table 1: Assessment of Biomass Potential in 2007 No.
1.
2.
3.
Crops
Rice
Sugarcane
Cassava
4. Corn
5.
6.
Oil palm
Rubber
Annual Production (1)
Biomass
RPR
Biomass Q’ty
/production
Tons/Rai
(2)
(3)
(Million Tons)
LHV
Moisture (3)
(MJ/kg) (3)
(%)
Non-exploited Ratio (4)
Non-exploited Biomass Q’ty
Energy Potential
(Million Tons)
(TJ)
(ktoe)
Husk
0.21
6.74
13.52
12
0.0057
0.038
519.47
12.40
Straw
0.49
15.73
12.33
10
0.295
4.640
57,210.10
1366.18
Bagasse
0.58
37.35
7.37
50.73
0
0.000
-
-
Leaves & Tops
0.17
10.95
15.48
9.20
0.55
6.021
93,211.27
2225.89
Stalks
0.09
2.42
15.59
59.40
0.407
6.021
93,873.63
2241.7
Rhizomes
0.20
5.38
5.49
59.40
0.660
3.553
19,508.39
465.86
Corncob
0.24
0.86
9.62
40
0.67
0.579
5,568.83
132.98
Stalks
0.82
2.95
9.83
42
0.61
1.801
17,701.08
422.70
6.39
Fiber
0.19
1.21
11.40
38.50
0
0.000
0.00
-
million tons
Shell
0.04
0.26
16.90
12.00
0
0.000
0.00
-
Empty Fruit Bunch
0.32
2.04
7.24
58.60
0.38
0.777
5,625.65
134.34
32.099 million tons
64.4 million tons
26.92 million tons
3.60 million tons
207,607 Rai
Sawdust
3
0.62
6.57
55
0
0.000
0.00
-
Slabs / Chips
12
2.49
6.57
55
0.41
1.021
6,710.77
160.25
Roots
5
1.04
6.57
55
0.95
0.986
6,478.90
154.72
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
2. Cost Analysis for Biomass Fuel 2.1 Cost of Biomass The study on cost of biomass in this paper will cover 5 biomass types, whose data are collected monthly and kept in the Biomass Clearinghouse’s database, i.e. rice husk, rice straw, rubber slab, palm shell, and palm empty fruit bunch. •
Rice husk: There has been the rising trend of rice husk price since 2007, jumping from 688 Baht/ton in Dec 06 to 1,025 in Apr 08, and slightly decreasing to 950 Baht/ton in late May.
•
Rice straw: Its price is about 18 Baht/bale. Straw from 1 Rai of rice cultivation can be compacted into 24-25 bales. The interview from the farmers in Ayudhaya reveals that the current price of straw (2008) increased from 1819 Baht/bale to 23 Baht/bale or 1,210 Baht/ton.
•
Rubber wood chip: Its price tended to decrease from 873 Baht/ton in Sep 06 to 658 Baht/ton in May 08. Apparently, the price of rubber wood chip changes inversely against the price of latex.
•
Palm shell: It has been used for substituting fuel oil in many factories for their energy cost savings; therefore, its demand is high. Its price is also getting higher from 1,300 Baht/ton in Sep 06 to 2,100 Baht/ton in Oct 07. Expanding palm cultivation has increased palm shell yields in the market. Hence, the price of palm shells tended to decrease from late of Year 2007, at the average price of 1,500 Baht/ton in May 2008.
•
Palm empty fruit bunch: Since it has been used slightly for fuel, its price is quite stable at 50 Baht/ton. However, it rose to 110 Baht/ton in August 07, and tended to drop to 25 Baht/ton after that.
Table 2 shows the data of biomass price obtained by field survey in each region during May to September 2008.
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
Table 2 Biomass prices obtained by field survey
Biomass prices obtained by field survey
Rice Husk Rice Straw Bagasse Cassava Rhizome Corncob Palm Shell Palm Empty Fruit Bunch Sawdust Rubber Slabs
North
NE
East
Central
South
Average
460 800 450
950 200
925 325 450
1,175 1,750
1,000
902.00 768.75 450.00
700
180
1,100
300 250 1,000 250 1,000 1,500
700 1,700 45 1,200 700
5
850
300.00 687.50 1,350.00 147.50 793.33 1,016.67
Adjusted Prices from 12month EforE data
Prices excluding handling and collecting process
894.17
898.08 768.75 450.00
1,779.17 59.17 704.79
300.00 687.50 1,564.58 103.33 793.33 860.73
Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
2.2 Cost of Transportation Biomass is conventionally transported by several types of trucks. General types are 1) small trucks, transporting within 50-km distance with the cost of 80 – 100 Baht, 2) 10-wheel truck with 3 axles with 25 ton gross weight and 15 ton truckload, 3) 18wheel trailer with double truck units and 47 ton gross weight, and 4) 18-wheel semitrailer with 45 ton gross weight. By assuming that the maximum weight of truckload is about 15 tons per trip and the unit cost of transportation is 2.5 Baht/ton/km, the costs of transporation by 10wheel truck within 20, 50, 100, and 200 km distances are 750, 1,875, 3,750 and 7,500 Baht, respectively. 2.3 Comparison between the cost of biomass and coal From all fuels, coal has the highest heating value followed by that of palm shells which has the highest heating value among other types of biomass. However, coal is the most expensive and palm shell is the cheapest. The comparison of cost per unit of heating value shows that palm empty fruit bunch has the minimum figure, i.e. 0.014 Baht/MJ, while the highest is coal at 0.15 Baht/MJ. It can be concluded from the initial analysis of 9 biomass types and coal prices that cost of coal is higher than any other biomass especially the palm empty fruit bunch, which costs the minimum among other biomass types -- rice husk, rice straw, palm shell, and rubber slab – which tends to cost higher. The utilization of biomass from nearby resources is necessary for reducing transportation cost.
Table 3 Comparison between the costs per heating value of biomass and coal in May 08 Comparison between the costs per heating value of biomass and coal Rice Husk
Rice Straw
Palm Shell
Palm Empty Fruit Bunch
Rubber Slab
Bagasse
Cassava Rhizome
Corncob
Sawdust
Coal
Heating Value (MJ/kg)
13.52
12.33
16.90
7.24
6.57
7.37
5.49
9.62
6.57
26
Prices (Baht/ton)
898.08
768.75
1,564.58
103.33
860.73
450.00
300.00
687.50
793.33
3,888.53
0.90
0.77
1.56
0.10
0.86
0.45
0.30
0.69
0.79
3.89
0.066
0.062
0.093
0.014
0.131
0.061
0.055
0.071
0.121
0.150
Prices (Baht/kg) Costs per unit of heating value (Baht/MJ)
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
3. Cost Analysis on Power Generation from Biomass 3.1 Review on Biomass Power Generation Technologies Heat and electricity generation from biomass are widely used. The systems applied vary from small scale to power plant scale. There are 4 main systems converting biomass to energy by thermo-chemical process, i.e. 1. Direct-Fired Combustion 2. Co-firing Combustion 3. Gasification 4. Pyrolysis Directed-fired combustion systems are mostly used in converting biomass to energy. Biomass will be directly combusted in boiler, and the steam produced will flow through the turbine which connects to the generator to produce electricity. The condensing turbine can be designed to extract the thermal use of steam during or after passing the turbine, known as extraction or back pressure turbine. Many industries, such as sugar mill, paper mill, utilize steam in their process. The system generation both heat and electricity is called “Cogeneration”, whose efficiency is considered high. Co-firing between biomass and coal is applied in many coal-fired power plant to reduce air pollution especially sulfur dioxide emission. Although heating value of biomass is lower than that of coal, biomass price available near the power plant is much cheaper. Gasification technology has been developed for using biomass. Biomass is converted to fuel gas for internal combustion engine (ICE), both simple and combined cycle gas turbine, and fuel cell production, whereas feeding to Stirling engine and micro turbines in small scale. Pyrolysis and gasification are the process of partial oxidation between oxygen, steam, or carbon dioxide. Both are converting biomass in the solid state which is predominantly the compound of carbon, hydrogen and oxygen into combustible gas, i.e. carbon monoxide, hydrogen, and methane, all of which are eventually burnt to generate heat. 3.2 Assessment of Technology Efficiencies 3.2.1 Technology Efficiencies •
Efficiencies of heat generation technologies Primary equipment in heat generation system is boiler. The efficiency of boiler is measured by the ratio of the net heat used to generate steam to the heat generated from burning the fuel, which typically ranges from 65 – 70%. In order to achieve the maximum efficiency, the heat loss in the boiler must be minimized. •
Efficiencies of electricity generation technologies Thermodynamic efficiency of biomass power plant depends upon temperature and pressure of working fluid flowing through the turbine, i.e. the thermodynamic
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
efficiency of the system is high when working fluid with high temperature and high pressure flows through the turbine. Condensing boiler and turbine technology allows steam flowing from boiler through condensing turbine, rotating it and generating electricity. The low pressure steam flowing from turbine will be turned into liquid via condenser and cooling tower, and pumping to boiler, and circulating throughout the cycle perpetually. The efficiency of this technology is about 5-15%, while 85-95% is the losses of steam. •
Efficiencies of cogeneration technologies For back pressure boiler and turbine technology, there are no condenser and cooling tower in the system, and the steam from the turbine is high pressure for utilizing in the process. The back pressure turbine will control the amount of steam produced to match with the process demand, while less electricity will be produced. The efficiency of electricity generation is about 5 – 10%, while 50 – 60% of heat generation is used in the process. Vertical boiler and steam engine technology is under the same principle as back pressure turbine, but replacing steam turbine with steam engine, the very old technology. Energy produced will directly drive the belt connecting to the rotating machine. It is slightly used due to its low efficiency. Sample applications are for steam locomotive and steam rice mill. Recently, the efficiency of steam engine has been improved by changing from horizontal piston to vertical piston so as to utilize the exhausted gas. This is suitable for small business using both steam and electricity in the process. This system has capability to respond to the fluctuating load, with the power less than 1.5 MW, and the electricity efficiency of 5-12%, whereas the waste heat from exhausted gas can be recovered for use by 50-60%. For gasifier and gas engine technology, biomass gas can be fed into both gas turbine and gas engine; however, the produced gas must be so clean that neither sulfur nor chlorine compounds are blended to protect the gas turbine from abrasion. Spark ignition engine can be run directly by biomass gas, while diesel engine needs small amount of diesel for igniting during start-up. The engine that uses biomass gas as the fuel, however, has the efficiency decrease by 45-50%, depending on the Stoichimetric Gas/Air Mixture ratio. Gasifier technology is the technology without steam. Its electricity generation efficiency varies upon the technology and the efficiency of individual equipment. The electricity generation efficiency ranges from 10% to 20%, and 30 – 50% of energy from exhausted gas if it can be utilized. 3.2.2 Appropriateness of Technology •
Direct-fired and Gasification Technology Each combustion technology can be applied for any biomass type, but at the different levels of advantages and disadvantages. Most widely-used technology is stoker boiler; however, it is not the best one. For example, rice husk is well combusted in fluidized bed because low temperature prevents ash from melting.
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
Stoker and suspension firing are applicable, but it is necessary to optimize ash melting. Typically, fluidized bed is the most appropriate alternative since it can be used with fuel with high moisture content, various sizes are available, and it can be used with many biomass types, hence; high flexibility. Suspension firing is not appropriate for biomass since the fuel needs to chipped, while gasification is the interesting choice, but there are still the technology acceptance and commercial problems.
Table 4 Comparison of appropriateness of individual technology for individual type of biomass Level of Appropriateness Biomass Stoker
Fluidized Bed
Suspension Firing
Rice Husk
Medium
High
Medium
Palm wastes
Small
Medium
Small
Bagasse
Medium
High
Small
Wood chip
High
High
Small
Palm shell and Corncob
Medium
Medium
Small
•
Cogeneration Technology It is found that the efficiency of co-generation system is higher than the separate generation system, i.e. the overall efficiency of most electricity generation from steam turbine is lower than 40%, meaning that below 40% of energy value is converted to energy, while the left is heat loss. Although heat loss is considerable, its temperature is not high enough to produce electricity. But, the heat with low temperature can be utilized in many industries. Therefore, the cogeneration technology is selected in order to generate heat at the high temperature enough for using in the industrial processes. Co-generation is one of the methods to increase the overall efficiency of the system; however, the technology limits the choice of power plant location, i.e. it must be close to the heast user, and the system can be used various types of fuels to avoid fuel shortage. Also, the fuel feeding system must be designed for various fuels; hence higher maintenance cost may occur. At present, power plants using cogeneration technology are restricted to those with large size, such as sugar mills, paper mills, palm oil mills, and rice mills. 3.3 Cost of Power Generation from Each Biomass Type. This section is beyond the term of reference of the study on biomass resources management for alternative energy in macro level; however, to reflect the overall picture of biomass utilization, EforE has conducted the analysis of energy cost, by technology and type of biomass suitable for each technology.
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
In evaluating electricity generation cost per unit (Baht/kWh) from different types of biomass, there will be 2 main parts considered, i.e. initial investment cost and expenses, and revenues 1. Initial Investment Cost and Financial Expenses The cost of electricity generation depends upon initial investment, fuel supply cost, operating and maintenance cost, interest expenses, capacity of the technology, and project lifetime. In estimating electricity generating cost or cost of energy (COE), EforE has set up the same financial assumption according to the current financial situation as follows; • Debt to Equity ratio is 3:1, • Loan repayment period is 7 years from commercial operating date (COD), • Annual interest rate is 9% • Plant construction period is 1.5 years • Initial investment cost being levelised can be divided into 2 parts
Capital, not the loan from financial institute, equal to 25% of the total investment, and the interest and expense occur during construction are calculated by amortization method using the same period of the equipment life of each project. Loan from financial institute, equal to 75% of the total investment, is calculated by amortization method using the period of loan life, which is equally reimbursed for 84 months
The cost of electricity generation (COE) of each technology is equal to the sums of amortized cost of both capital and loan, plus O&M cost, fuel cost per unit of electricity generated per annum as described in the below formula: COE = [(C+E)*R1 + (D)*R2 + O&M + FS] / [Net Annual Energy Production] Where
C E D
= = =
R1
=
R2
=
i nj O&M FS
= = = =
Capital, equal to 25% of the total investment Interest and other expenses during construction Loan from financial institutions, equal to 75% of the total investment Amortised Discount Factor of the capital the owner uses, used for the entire equipment life, equal to i/[1(1+i)-n1] Amortized Discount Factor of the loan the owner borrows from the financial institutions, calculated, as long as the load life, by i/[1-(1+i)-n2] Interest rate Number of years calculated Operating and maintenance cost Fuel supply cost
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
2. Project income Revenues from selling electricity at the average peak and off-peak price of 2.70 Baht/kWh Revenues from adder cost for 7 years, equal to 0.30 Baht/kWh 3. Project operating expenses Fuel supply cost, assumed to increase by 1.50% annually Operating and maintenance cost – O&M, adjusted on types of technologies and biomass 4. Other related data Project life, equal to the life of main machine and equipment used in each technology Amount of power and electricity energy generated and left after being used in the project and to be sold to the distribution authorities Tax privileges • Corporate tax exemption for 8 years from COD • 50% corporate tax reduction of net profit for 5 years after the end of tax exemption period Interest rate during construction will be averaged, accounting 50% of the total interst expenses since the loan is withdrawn periodically, not in the full amount of the loan in the first time. Discount rate is the weighted average between the rate of return in the entire project life and the capital cost invested (WACC), equal to 9.75% plus the Spread (about 0.25%), since the interest is on the rising trend, totally equal to 10%. The weighted average between the rate of return in the entire project life and the capital cost invested (WACC) is calculated by WACC =
(Interest rate x Loan fraction) + (Required Rate of Return x Capital Fraction) + Additional gain expected to obtain by the interest trend in the financial market
4. Supply Chain Management 4.1 Arrangement of Regional Biomass Calendar Regional biomass calendar can tell the cultivation and harvesting cycles of economic crops and their biomass, which are different from one region to another region. Such distinct calendars are varied by the type of commercial crop grown, and cultivation cycle according to the various climate and geographic conditions. 4.2 Improvement of Biomass quality 4.2.1 Size reduction by compaction Biomass can be compacteg into circular or cuboid shapes to increase its density and easier transportation. Besides, this tremendously increases the truckload
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
of the very low density biomass such as rice straw, hence considerably reduce the transportation cost. Straw baling process is the additional step after the harvesting the cutting of rice stem and stalks – in the rice paddy, by which the straw bales naturally dried up in the rice field will have higher heating value. The bale size depends on the type and size of the baling machine. Furthermore, the density of the baled biomass depends on the type of biomass. There are 3 typed of straw bales produced by machine used in the foreign countries; -
Cuboid, available in both small and large bale with high density Cylindrical Compact, currently under development
4.2.2 Chipping to reduce voids in the truck •
The On-site Chipping process is suitable for cassava rhizome, palm fronds, and empty palm fruit bunches. It can increase the truckload and reduce the transportation cost and ease the loading/unloading. Wood chippers are available in small size (250 kg/hr), medium size (10 tons/hr), and large size (20 tons/hr), and the wood chips produced is approximately 2.5x3 cm. in size, and about 1-2 mm. thick.
•
Chipping should be done in front of the plantation area to achieve high machine utilization. The chipping machine should be mobile type in order to process the residue occurred in the area in the front. For example, to chip the waste of wood piece and branches with higher efficiency is to move the machine to the residue than that done vice versa.
•
In rhizome chipping process, rocks and stones may be found mixed with rhizomes which can damage the chipper’s blades. Hence, the blades made from special-hardness material are required for rhizome chipping. This causes the higher cost of chipping than those of other types of biomass. Moreover, corncobs, which are much lighter, need to be pretreated by shredder to obtain the size suitable for further process.
4.2.3 Moisture content reduction for the weight loss and condition stabilization: Drying biomass can reduce the moisture content and stabilize its conditions longer. 4.3 Cost Reduction in Transportation The supply chain management of biomass can be implemented domestically by 3 modes; 4.3.1 Land Transportation Land transportation is done conventionally by trucks of various sizes, weights, and shapes, some of which traditionally used are;
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
•
Thai local truck, known as E-Tan, is the small truck with the bed for carrying the agricultural products or passengers in the short distance. It can be 4-wheel or 6-wheel type, capable to carry loads up to 2-5 tons.
Pickup is the small truck using high-speed diesel engine with 4 pistons, capable to carry the load of 1-1.5 tons.
Medium-size truck, with 4-6 wheels, is the truck with platform designed with the shape and lower frame in order to carry more load by reducing the driver space to increase the truck bed space, and the truck height, enabling the truck to carry quite the large amount of 2.5-5 tons as well as the pickup truck. Transporting biomass by medium-size truck emphasizes on maximizing the utilization, in the short distance less than 50 km from the biomass origin to the end user.
6-wheel truck with 2 large axles is designed with shape and lower frame for more truckload capacity by reducing front passenger space, increasing the truck bed area and the truck height, enabling it to carry up to 15 tons.
10-wheel truck with 3 axles is the truck with very large space of the truck bed, tall bed side to carry the highly stacked freight, and flat bed, with the maximum gross load of 25 tons, as regulated by the law, (truck weight 6.5 tons plus truckload 15-19.5 tons). This modified type is usually hired for rick husk transportation from rice mills area to the end used within 100 km.
18-wheel trailer is the combine of 10-wheel truck and the second truck bed, classified as the hauling vehicle. The weight limit is the same as trailers, at 47 tons of gross weight. It is suitable for long distance transportation.
5-axle semitrailer is the semi-trailer hauling vehicle, using the hauler and trailer unit with the size of 14.6 (L) x 2.5 (W) x 3.4 (H) m. (total height from road surface level less than 4.2 m), with the gross weight limit of 45 tons, according to the regulation. The trailer unit is usually designed with flatbed for mounting with container or palletized freight.
Logistic matching in supply chain management
In the highly competitive market and with the rising fuel price, all the business owners using their own vehicles to transport products are trying to reduce the transportation cost so as to reduce the overall cost of products and service, in order to survive in the market. Hence, the Logistic Matching in supply chain management or Backhauling is one method to achieve the long-distance transportation cost reduction. The logistic matching or backhauling is by utilizing both routes, back and forth, to neutralize the empty route. Hence, trucks must
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
carry the freights on both routes, and the loading/unloading time is supposed to be short. 4.3.2 Biomass Transport by water Product transportation by water is the transportation system required very low transportation cost per weight and can be done in the huge quantity per trip, much larger than other modes. However, it is not applicable to the door-to-door service, which is usually done by trucks. Mostly, the vessel type used in water way is the barge. Moreover, the limitation of this mode of transportation is from the waterway itself, hence the depth and the width of the waterway. Besides, it also requires the intermediate stockyards or warehouses for stocking and separating the product before and after the loading/unloading process from the vessel. Mostly, the product transported by water is of low value, does not require short period of time for delivery, and can be carried in a huge amount in one trip such as soil, rocks, sand, cement, paddy, sugar, and cassava. 4.3.3 Biomass Transport by Rail Compared to road transport, rail transport has advantages in carrying heavy bulk cargo with lower unit cost and less pollution. This mode, therefore, corresponds with the government campaign in encouraging energy savings and reducing traffic congestion. Cargoes conveyed via this mode are low value and heavy, e.g. coal, petroleum products, cement, rice, sugar, etc., and various types of freight cars, for example, boxcar for general commodities, tanker for liquid and gas, etc., are applied. To transport biomass by rail, handling technique and tools for transshipment at both ends of the trip to the point of pick-up and delivery must be taken into consideration. This double handling incurs incremental fixed cost of rail transport as same as that of ship transport. The transshipment, which has not been designed for handling bulky biomass, will cause delay in train schedule. Applying containerization for transshipment leads to less time consumption and double handling. 4.4 Concept for Policy Formulation and Implementation 4.4.1 Establish Biomass Zoning Biomass zoning has been proposed to mitigate fuel competition within surrounding areas of power plants. The scheme, then, can prevent biomass prices from rising excessively. However, the survey shows that some biomass users in both electricity and heat generation sectors disagree with the concept, reasoning that the scheme will not be able to mitigate the problem and it strongly conflicts to free market economy. Also, biomass is merely agricultural residues such as rice husk, bagasse, oil palm empty fruit bunch, oil palm fiber, wood chip, etc., not economic crops; therefore, biomass is not regulated commodities, and neither its prices nor quantities should be intervened by the Department of Internal Trade, Ministry of Commerce. Besides, its reference prices, unlike those of agricultural products such as rice, sugar cane, cassava, cannot be set.
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
4.4.2 Construct on-farm biomass handling system The biomass resource survey shows that there are many crop residues left to decay spread over cultivation areas, i.e. rice straw, corn leaves and stalk, cassava rhizome, palm leaves, stem, and root, rubber stalk, and sugarcane trash. Some of them are either left to decay or burned, not extracted for commercial purpose, while their heating values are as high as or even higher than some existing biomass using as fuel. The reasons why those crop residues are not utilized as fuel are as follows:
No obvious market exists. Collection is difficult, and requires more labor; hence, higher cost. Such residues are palm stem, root, and leaves as well as rubber root. It is essential to leave some on the land for soil improvement for next crop without additional fertilizer. Some biomass residues, e.g. straw, corn leaves and stalks, have very low density, so loading weight per one truck is lower, and transport cost is higher.
To utilize these residues commercially, proper collection and handling systems are required to obtain optimum biomass size and weight for reducing transportation cost, transshipment time and process, as well as operating easier.
5. Policy Recommendations for Promoting Biomass in Thailand To provide recommendations for promoting biomass in Thailand, EforE have conducted the methodologies as described below: 1. Literature review on existing measures for promoting biomass in foreign countries, 2. Study on existing measures for promoting biomass in Thailand 3. Analysis on existing barriers and opportunities in promoting biomass in Thailand 4. Formulation on policy recommendations to overcome the existing barriers. 5.1 Summary of existing measures for promoting biomass in foreign countries This section will describe existing biomass supporting measures, which is typically parallel to other renewable energies. The following measures are formulated for removing the barriers of renewable energies. • To overcome the variable resources, many regulations have been amended, as well as some are initiated specifically for promoting renewable energies, i.e. interconnection agreement, power purchase agreement, and net metering. • To alleviate higher production cost, financial incentives have been applied, i.e. investment subsidies, preferential finance, feed-in tariff, competitive bidding, and tax credits.
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
• To increase renewable energy penetration in free market, renewable energy quota has been set. The measures are commonly known as Renewable Portfolio Standard, which oblige power producers to either produce or buy electricity from renewable energy sources at certain extent. Besides, there are other promoting measures, i.e. environment taxation, grants for RD&D, policies to promote local industry, green power market, green procurement, wheeling and banking, and externality adders under IRP process. 5.2 Summary of existing measures for promoting biomass in Thailand Thailand is highly dependent upon imported oil. It is estimated that the value of net energy import will reach 900,000 million Baht in 2008. The high dependence on imported oil together with the abundance of agricultural sources leads Thailand to be one of the earliest Asian countries having policies in supporting renewable energy. The existing policies are: • Amendment of some regulations to suit for renewable energy along with formulation of specific regulations for promoting renewable energy: The government has implemented SPP and VSPP regulations from both co-generation and renewable energy since 1992 and 2002, respectively. The interconnection requirements of both regulations are amended continuously for better clarity and in conformity with international standard. Net metering has been applied in VSPP regulation for facilitating renewable energy projects, which sells electricity to the grid less than 6 MW. However, the projects with over-6-MW sale to the grid must install 2 meters for selling and purchasing due to the limitation of VAT collection system. • Financial incentives: Since the cost of power generation from renewable energy is much higher than that from fossil fuels, the government has provided various forms of financial support, i.e. (1) investment subsidy which Ministry of Energy through Energy Conservation Fund (ENCON Fund) has subsidized many renewable energy project investment cost, e.g. ENCON Fund has sponsored 44-50% of investment cost of biogas projects in pig farms and 20% of that in industrial sector since 1995, (2) preferential finance, the 2,000 million-Baht budget from ENCON Fund allocated to financial institutions as revolving fund for granting soft loan with the maximum of 50 million baht each project and 4% interest in renewable energy and energy efficiency projects since 1993, (3) investment tax incentive, exemption of import tax and 8-year corporate tax as well as other BOI privileges in renewable energy business, approved by the board of investment since 2005, (4) competitive bidding, having been launched twice for determining the lowest adder for renewable SPPs in 2002 and 2007, and (5) feed-in tariff, employed for SPP and VSPP in 2006 by purchasing power at fixed adder for each type of renewable energy for 7 – 10 years since its commercial operating date (COD). • Renewable Portfolio Standard: In 2003, the Government tried to enforce Renewable Portfolio Standard (RPS) by stipulating that all new power plants are obliged to produce 4% of their electricity production from solar, wind, or biomass. However, there is, until now, no enforcement of this regulation.
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
5.3 Existing barriers and opportunities in promoting biomass in Thailand It can be drawn from status of biomass potential in 2007 that there are many types of biomass with more than 50% non-exploited ratio. This section will address their limitation as well as barriers. In this regard, EforE has held up 5 focus groups, i.e. twice in Bangkok and once in Chiangmai, Mahasarakham, and Surat Thani to collect comments from all stakeholders as well as conducted survey. The conclusions are: 5.3.1 Barrier due to biomass conditions or properties 1) Non – constant supply throughout the year due to their seasonal production: The biomass obstructed by this barrier is bagasse. Sugarcane is processed 4 months a year, therefore, the electricity generation systems in these sugarcane mills operating only 4 months are usually small and low-efficient. Since the investment cost of high-efficiency power generation system is so high that requires continuous operation throughout the year, while the raw material is not dependable, the investors are not convinced to invest highly efficient power plant. 2) Some unique properties leading to higher cost •
Abrasive properties: Corncob is composed of potassium hydroxide with highly abrasive properties. The material for fabricating electricity generation system, therefore, should be resistant to corrosion. This results in higher initial investment cost. Also, bulky and difficult-to-shred corncob requires higher costly shredder; as a result, processing unit cost is higher than other biomass.
•
High moisture content and alkali component: Similar to shell and fiber, oil palm empty fruit bunch is biomass derived in palm mills; however, empty fruit bunch are not utilized as fuel because of their high moisture content, large grain, and cohesive fiber content. The latter property causes difficulties in shredding. Also, the longer it’s stored, the more cohesive its fiber content. Also, its alkali component cause slag in boiler tube easily. To utilize empty fruit bunch, it is needed more processing and specially-desired furnace, leading to higher cost of power generation technology. The piled empty fruit bunch can be flashed and burned spontaneously.
•
High contamination: Cassava rhizome, the left biomass in the farm, is filled with contamination, such as pebble, stone, soil, sand, etc., requiring pretreatment process, which lifts up its cost of electricity production. Typically, farmers do not make any use of it and burn it out. The key barrier obstructing from using cassava rhizome as a fuel is its property. Its skin contains silica network for strengthening, resistant to burn, and difficult to combust. To utilize
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
as fuel, it is needed to chop it into 3-5 mm before feeding to combustion chamber. This is one of the factors driving the cost of power production from cassava rhizome. •
Low density: Sugarcane leaves and tops and rice straw have low density; therefore, high transportation cost. The key barrier is collection capability. At present, some sugar mill has tried to apply sugarcane leaves and tops as fuel by using baler to collect them from the farm after harvesting sugarcane. However, balers pack the cane and ruin them, which have an impact on next plantation. Also, no suitable boiler technology exists.
•
Required special management: Wood waste from forest under supervision of Forest Industry Organization (FIO) costs higher for their maintenance and collection. However, trimming wood enhances the quality of wood, and therefore, FIO’s revenues from wood industry also increase.
5.3.2 Barrier due to imbalance of demand and supply Rice husk, particularly, is facing the barrier due to imbalance of its demand and supply. Since its properties are suitable for using as fuel, some of the first SPPs have used rice husk for power generation since 1992. Moreover, power generation technology from rice husk has been developed so continuously that the production unit cost is lower and lower. Power plants using rice husk are mushrooming, adding value for rice husk from zero to 900 Baht/ton in 2008. Additionally, “Adder” measure in 2006 enhancing power plant project feasibility has driven more power plant using rice husks; hence, competition in collecting rice husk. This similar barrier may have impacts on other biomass, when the production cost turns as low as that using rice husk. There are also rice husk demands in other businesses, such as cement plant, chicken farm in the East, brick maker, leading to high competition in sourcing rice husk. The price set up by the farm can reach 1,200 Baht/ton, while cement plant’s rush purchase during peak demand keep the price of rice husk remain too high despite high production season. The competition causes high level of rice husk price all the year in some areas, such as Ayutthaya, Saraburi, Singhburi. Also, some government’s intervention to rice paddy price and rice pawn program has an impact on rice husk supply in the market. 5.3.3 Barrier due to high production cost, weakening its competitiveness to the fossil fuel 1) Extra management cost The mentioned imbalance of demand and supply led to increasing prices of biomass with less managing requirements such as rice husk, bagasse, while those with extra managing requirements, i.e. cassava rhizome, corncob, and palm empty fruit bunch are utilized at very small extent, less than 50% due to their bulky
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
weight, high contamination, high collection expense. The extra management cost disables the biomass to compete with fossil fuels. 2) High technology cost •
Higher unit cost of technology
•
Economies of Scale: About 8% of rice husk is not utilized, while some areas are facing competitive sourcing rice husk. It can be concluded that non-exploited rice husk might be in remote areas, where it is not feasible for collecting, while some of non-exploited biomass like corncob, palm empty fruit bunch, rice straw, sugarcane leaves and tops are scattered. To promote energy use of such biomass, it is necessary to encourage small scale technologies whose investment costs per kW are high because of their lacking of the economy of scale.
•
Technology with higher environment protection control requirement: The mentioned technology is incineration; however, employing this technology is inevitable since there are increasing trends of MSW in all big cities, while landfill spaces are limited. However, MSW is composed of various components including, food waste, plastic waste, paper, glass, metal, etc. Burning these directly leads to high air pollution especially dioxin compound; therefore, efficient environment protection control in both pretreatment and emission control systems is highly required. Incineration technology with strong environment protection control requires high initial investment cost; for example, 7-MW incineration requires 1,920 million Baht investment. At the existing “adder” level of 2.50 Baht/kWh, IRR of the project ranges from 2.6% to 5.3%.
5.3.4 Barrier due to power purchase regulations 1) Lowering power sale to the grid during off-peak to over 65% of the installed capacity: When the country faced economic crisis in 1997, installed capacity was much higher that the demand; EGAT, therefore, announced “…SPPs must be able to decrease their generation to over 65% of contracted energy unit during off-peak, from 9.30 pm to 8.00 am…” Some SPPs obliged to this announcement are requesting for terminating this issue. 2) Calculation of revenues from “adder”: The issuance of the distributing authorities, named “Calculation of revenues from adder” for those renewable VSPPs, determined the calculation formula as follow:
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
4. Calculation of revenues from adder* Additional revenue for VSPP = Net power sale to grid* x Adder varied upon fuel types Remark: * Net power sale to grid before 2% deduction for operating cost of the authorities
Calculation of revenues from adder by “net” power sale to grid does not benefit to renewable VSPPs fully especially those extremely small scales. 3) Problems due to diverse systems and services in different areas: •
Diverse services: Requests for selling power and grid connection at some branch offices of MEA and PEA are under different standards.
•
Transmission line reservation: There are many VSPPs in some areas unable to connect to the grid since the transmission system is fully reserved. The capacity of transmission system ranges from 6 to 10 MW. There are many approved-but-not-yet-in-operation VSPPs reserving transmission line until it reaches the full capacity, which obstructs some potential VSPPs from submiting their proposals.
4) Opportunities for promoting biomass power generation in remote areas supplied by PEA’s diesel fired power plant EforE’s survey proves that, there are, despite the above barriers, still opportunities for promoting biomass power generation in remote areas supplied by PEA’s diesel fired power plant. At the retail price of diesel of 30 Baht/litre, the production cost of these diesel generators reaches 12 Baht/kWh, which enhances the competitiveness of renewable power generation. This is considered as an opportunity to promote biomass. 5.4 Recommendations for promoting biomass 5.4.1 Procedure to remove the barrier due to biomass properties To remove the barrier due to biomass properties, i.e. seasonal supply, abrasive property, high moisture content, highly alkaline compound, high contamination, and low density, the exact procedures are required as listed below. •
Biomass with seasonal supply, i.e. bagasse, requires proper storing systems. Also, technology applied for various biomass types should be employed to diversify the risk.
•
Biomass with abrasive property, high moisture content, and highly alkaline compound, i.e. corncob and palm empty fruit bunch, leads to
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
higher cost of technology. Therefore, to encourage the utilization of these types of biomass, EforE recommends the government to provide the appropriate rate of “adder”. •
Biomass with high contamination, i.e. cassava rhizome, requires cost in removing the contamination and chopping before feeding to combustion chamber. The more process required, similar to that for corncob and palm empty fruit bunch, drives the production cost higher; therefore, more “adder” is required for promoting the use of cassava rhizome.
•
Biomass with low density, i.e. sugarcane leaves and tops and rice straw cause higher transportation cost and collecting cost. One of the methods to reduce transportation cost is briquetting.
•
Biomass with extra managing requirement, i.e. wood waste from Forest Industry Organization (FIO), results in higher cost of production. However, cost due to extra managing requirement should be allocated clearly. The usual management fee should not be allocated to power business. These usual management cost includes cost of trimming to increase value of wood, while the collection expenses are regarded as one of power production cost. The government should consider higher rate of “adder” to compensate this fraction of cost to draw attractiveness.
5.4.2 Procedure to remove the barrier due to imbalance of supply and demand The imbalance of supply and demand brings about the proposal to establish zoning regulation, either on plant location or on biomass sourcing location. Factual Justifications EforE justifies that the establishment of zoning regulation is not practical due to the following reasons: • • • •
It is not only power plant industries in which biomass is utilized, but also in livestock farm, brick making factory, and as a fuel for thermal process in many industries. The zoning system benefits specific owners, unfair to any other with high competitive potential. Trading biomass is under the free competition, which balances itself by not allowing too distant trading, or excessively high production cost. In allowing power plant construction, there is any concession fee collected by the government; the privileges, therefore, should not be assigned.
Recommendations EforE realizes that the imbalance of demand and supply is the key barrier in promoting biomass; therefore, the government as well as the power producers should take the following actions:
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
• • • •
It is crucial that the government provides the update and accurate data for investors so as to enable to decide precisely. The risk guarantee fund should be established. Now, EforE is studying the mechanism, and will provide further recommendation. The power investors may apply insurance or any other financial tools to lower the risk. The power producers may select technology suitable for various biomass types to enhance fuel choices.
5.4.3 Procedure to remove the barrier due to higher production cost, weakening its competitiveness against the fossil fuel The justification of individual biomass on its barriers and procedures to remove it can be described as follows: •
Rice husk: It is 8% of rice husk that has not been exploited, while some areas face the sourcing competition. It can be assumed that there is rice husk scattered in remote areas, not viable for collection. This assumption has been verified by EforE’s survey, which found that there are many village mills smaller than those required to be registered (the minimum registered size are 5 tons/day) milling 400 kg daily. Few of these mills are normally situated closely to each other. The rice husk is utilized for fertilizer, while the remaining is larger. (more detail shown in Appendix A: Report on biomass survey) Therefore, very small technologies should be employed to extract energy from the biomass; however, the unit cost of production as well as the production cost is higher than that with the economy of scale. EforE, therefore, recommends (1) to determine higher adder for very small technologies, and (2) maintain the existing adder level for higher technology. Its appropriate rate will be shown in section 6.5.7. Also, precise and update biomass potential should be informed to the investors.
•
Corncob: It is 67% of corncob that has not been exploited, while the price of corncob rises from below 100 Baht/ton in 2007 to 687.50 Baht/ton in Jun 2008. Corn is cultivated into clusters, not as scattered as rice. The data from the office of agricultural economics explains that average corn product each province equals to 84,713 tons. Lopburi has the highest production of 280,995 tons, while the least in Chainart of 8,101 tons. The installed capacity to generate power from these amounts of raw material is 1.26, 4.18, and 0.12 MW, respectively. The calculation is shown in Table 6.16. To promote the use of corncob, small technologies are required; therefore, it is recommended that higher adder for very small technologies should be provided. Its appropriate rate will be shown in section 6.5.7.
•
Cassava rhizome and waste: It is more than 50% of cassava rhizome and waste that has not been exploited. It has been left in the farm because of their high contamination such as pebble, stone, soil, sand, and their strong silica mesh, as well as their resistance to burning. The utilization of
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
cassava rhizome requires pretreatment and chopping to 3-5 mm. before feeding into the burning system, leading to higher cost of production. EforE, therefore, recommends todetermine higher adder for very small technologies. Its appropriate rate will be shown in section 6.5.7. Also, the extra rate on top of the existing adder should be provided for higher scale; however, procedure to monitor fuel must be set up. •
Palm empty fruit bunch, rice straw, sugarcane leaves and tops: Their non-utilized percentages are 58%, 29% and 50%, respectively. The small use results from their low density, lifting up the transportation cost. Beside the briquetting application for cost reduction, EforE suggests that the small technologies will reduce cost of transportation; therefore, higher adder for technologies lacking of the economy of scale should be provided. Its appropriate rate will be shown in section 6.5.7.
•
MSW: There are currently more than 19 big cities obliged to managing more than 100 tons of waste daily as listed in Table 6.17, while their landfill spaces are limited. One solution, therefore, is incineration. However, existing incineration are not efficiently environmental protected. For example, MSW power plant in Phuket with the total capacity of 2.5 MW, generating at 1.6 MW, has burned high moisture content MSE, so the combustion is incomplete, leading to 300 nanogram per cubic metre dioxin emission. However, the incineration with efficient environment protection system requires high investment cost, for example, the 7 MW incineration requires 1,900 million Baht investment. At the existing level of adder (2.50 Baht/kWh) together with the 300 – 500 Baht/ton tipping fee, the IRR of project is at 2.6% - 5.3%. To encourage appropriate employment of waste to energy technology, the higher adder should be provided. Its appropriate rate will be shown in section 6.5.7.
5.4.4 Procedure to remove the barrier due to power purchase regulations 1) Lowering power sale to the grid during off-peak to over 65% of the installed capacity: Since there are some SPPs requesting for terminating this issues. EforE has found from the study in amendment of SPPs that this issue has already been terminated since Nov 26, 2003. NEPC resolved to revoke the limitation of power sale to grid during off-peak and allowed full sale because of their uncontrollable supply. Also, the termination doesn’t have any impact on overall network since the extent of renewable power producers as well as their contracted capacity is comparatively low, less than 1%. However, the NEPC resolution enforced that those who desire to move to the new campaign must abandon the existing contract and move to the new contract under the amended regulation, which the purchasing tariff has been switched from fuel oil based to natural gas based. Besides, the extension of VSPP regulation up to 10 MW will cover all prospective power producers from renewable energy. It is concluded that this issue is
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
not the barrier to encourage biomass power plant. The amendment is dependable since it does not influence any to the overall system. 2) Calculation of revenues from “adder”: According to the announcement on “Adder for renewable power producers”, revenues from adder are calculated from “net” power sale to the grid. This does not benefit fully to VSPP; however, many VSPPs have overcome the problems by splitting meter and land. Therefore, if any other issues on the announcement needed to be revised, the revenues should be calculated from “total” power sale to the grid. (Removal of the word “net”) 5.4.5 Procedure to remove the barrier due to diverse systems and services in different areas: 1) Diverse services: The survey and the focus group meetings held by EforE reveal that requests for selling power and grid connection at some branch offices of MEA and PEA are under different standards. Also, some department of industrial works agencies requires more data than that in the regulation. To remove the barriers in requesting for selling power and grid connection, EforE suggests that the Energy Regulatory Commission (ERC) enforces their authorization according to the law no. 11(7), which allows the ERC issuance of any regulation or announcement to monitor the service standard and quality as well as the measure to protect consumers from energy business, by setting up the subcommittee to solve any complaint and monitor it strictly. Also, if the area-based energy consumer committee is set up, channels for complaint through the committee should be allowed. 2) Transmission line reservation: There are many VSPPs in some areas unable to connect to the grid since the transmission system is fully reserved. The capacity of transmission system ranges from 6 to 10 MW. There are many approvedbut-not-yet-in-operation VSPPs reserving transmission line until it reaches the full capacity, which prevent some potential VSPPs from submiting their proposals. To tackle this, EforE proposes the new steps in reserving the transmission line as described in Chapter 6 Section 6.5.5. 5.4.6 Procedure competitiveness:
to
promote
biomass
in
the
areas
allowing
their
EforE’s survey together with PEA’s data shows that there are 13 sites currently supplied by PEA’s diesel generators as listed in Chapter 6 Table 6.19. Its production cost reaches 12 Baht/kWh, when the diesel price is at 30 Baht/litre. EforE considers that there are opportunities for promoting electricity generation from biomass as well as other renewable fuels in these areas because of the competitive production cost; therefore, it is recommended that the special “adder” should be provided for such areas. Its appropriate rate will be shown in section 6.5.7.
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Executive Summary Study on Biomass Resources Management for Alternative Energy in Macro Level
5.4.7 Procedure to adjust “adder” for electricity generation from renewable energy EforE recommends the initial adjustment of “adder” for electricity generation from renewable energy as shown in Table below. (More detail in Chapter 6 Section 6.5.7) Table 5 Recommendation to adjust “adder” for electricity generation from renewable energy by fuel types Special Adder for 3 Special Adder Number of for projects in Southern Border Provision Year Fuel remote areas 6/ (year) Provinces 5/ (Baht/kWh) (Baht/kWh) 7 Biomass (>1 MW) 1/ 0.30 1.30 2.30 Biomass (< 1 MW) 1/ 0.60 1.60 2.60 7 Cassava Rhizome (> 1 MW) 0.40 1.40 2.40 7 7 Biogas 0.30 1.30 2.30 7 Mini Hydro (50 – 200 kW) 0.40 1.40 2.40 7 Micro Hydro (< 50 kW) 0.80 1.80 2.80 Waste 2/ 2.50 3.50 7 4.50 Waste with well environment protection 3/ 3.50 4.50 5.00 7 10 Wind 3.50 5.00 5.00 10 Solar 4/ 8.00 9.50 5.00 Remarks: 1/ Biomass is defined as waste from cultivation, agricultural process, wood chip, or wood plantation for fuel. 2/ Waste is defined as all MSW technologies. 3/ Waste with well environment protection is defined as MSW managing by incineration technologies with pretreatment and emission control systems so as to the emission conforms to the air and noise quality standard of the Department of Pollution Control. 4/ Solar includes electricity generation from solar thermal systems. 5/ 3 southern border provinces include Yala, Pattanee, Narathiwas 6/ Remote areas covers all remote areas electrified by PEA’s diesel generators, i.e. • N.1 Area: Mae Sa Riang • N.2 Area: Umphang & Baan Huay Tar • C.2 Area: Larn Island, Sichang Island, Good Island & Mark Island • S.2 Area: Tao Island, Sukorn Island, Libong Island, Mook Island & Donsak • S.3 Area: Puyu Island Adder (Baht/kWh)
EforE’s justifications on proposed adder are: 1) Extra adder for below 1 MW capacity: The 0.30 baht/kWh additional rate is obtained from the differences between the production cost of 6 MW steam turbine and 120 kW gasifier as shown in Chapter 6, Table 6.21. The table describes that the production cost of the smaller one is 0.28 Baht/kWh higher than that of the bigger ones. The additional provision of 0.30 baht/kWh for 7 years will result in 11% project IRR. EforE, then, proposes the adder for biomass power plant with below 1 MW capacity at 0.60 Baht/kWh. 2) Extra adder for projects from cassava rhizome: Since cassava rhizome requires special management and collection, the provision of 0.1 Baht/kWh on top of existing adders is proposed. In conclusion, the total adder for projects from cassava rhizome is recommended to be 0.40 Baht/kWh. EforE will conduct further survey for more comments and report to EPPO.
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3) Extra adder for waste with good environmental protection: EforE proposed 1 Baht/kWh additional adder on top of existing adder. As shown in Table 6.22 Chapter 6, adjusted adder raises the project IRR from 2.6% - 5.3% to 5.0% â&#x20AC;&#x201C; 7.5%. EforE, therefore, proposes to encourage environmentally friendly waste incineration by adjusting adder to 3.50 Baht/kWh. 4) Extra adder for remote areas currently supplied by PEAâ&#x20AC;&#x2122;s diesel generators: Table 6.23 in Chapter 6 shows the production cost of diesel generators, equal to 7.67 Baht/kWh at the retail diesel price of 28.56 Baht/litre as averaged from Jan 06 to Aug 08. This cost of electricity is 5.17 Baht/kWh higher than the bulk tariff. However, fuel oil is the first fuel choice for electricity generation. EforE, then, proposes the special adder rate should be based on electricity generation from fuel oil, which is equal to 4.34 Baht/kWh at the wholesale price of 16.83 Baht/litre as averaged from Jan 06 to Aug 08; therefore, the special adder on top of normal adder in remote areas should be 2 Baht/kWh, but the overall adder should not exceed 5 Baht/kWh or cost of diesel generation as described in Table 6.23, Chapter 6. 6. Implementation Approaches for Biomass Resources Management The survey of biomass resources shows that more than 50% of some potential biomass is not utilized due to some constraints. To identify these constraints, EforE conducted site survey as well as held 5 focus group meetings, twice in Bangkok, once in Chiang Mai, Mahasarakham, and Suratthani. Section 6.4 in the former chapter summarizes all constraints of biomass utilization for both electricity and heat generation. The problems include (1) biomass resources varies seasonally, (2) some biomass has characteristics that requires higher cost of processing such as rice straw or sugar cane trash needs baler while choppers are needed for cassava rhizome and palm leaves, (3) demand and supply are imbalanced especially rice husk, and (4) cost of production is not competitive to that of fossil fuel. To overcome these problems, EforE recommends that it is necessary to consider biomass resources, biomass quantity, and production cost, accountable for cost of collection, processing, and transportation, in selecting biomass power plant location. 6.1 Method for Plant Location Evaluation Figure 1 describes all factors needed for location evaluation. The factors are annual energy supply (GJ/y) from existing biomass resources (Biomass I, II, III), cost of each biomass (C1, C2), and distance between biomass sources and power plant location to find the location with minimum total cost. In the case study below, 6 MWe power plant (756,000 GJ) is targeted. The case study on evaluate power plant location in 4 provinces in the East, i.e. Sa Kaeo, Prachinburi, Chachoengsao, and Chanthaburi is illustrated in Chapter 7, Section 7.2.
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Figure 1 Steps in Biomass Power Plant Location Evaluation
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