PROPOSAL
FOR REVIEW
PROJECT TITLE: BRAZIL: BIOMASS POWER GENERATION: SUGAR CANE BAGASSE AND
TRASH
GEF FOCAL AREA: Climate Change
GEF ELIGIBILITY: Under financial mechanism of Convention, Ratified 28
February 1994
TOTAL PROJECT COSTS: US$ 3.75 million
GEF FINANCING: US$ 3.75 million
GOVERNMENT COUNTERPART FINANCING OF GEF COMPONENT: not applicable
CO-FINANCING/PARALLEL FINANCING: US$2.767 million - COPERSUCAR (Private
Sector)
ASSOCIATED PROJECT: BRA/92/G31 - Biomass Integrated Gasification - Gas Turbine
GEF OPERATIONAL FOCAL POINT: Mr. Roberto Jaguaribe
- Secretary of International Affairs - Ministry of Planning and Budget
GEF IMPLEMENTING AGENCY: UNDP
EXECUTING AGENCY: Ministry of Science and Technology
LOCAL COUNTERPART AGENCY: Ministry of Planning and Budget
ESTIMATED APPROVAL DATE: June 1996
PROJECT DURATION: 2.5 years
GEF PREPARATIONS COSTS: none
BRAZIL:
BIOMASS POWER GENERATION: SUGAR CANE BAGASSE AND TRASHGENERAL OBJECTIVE1. To
determine the technical, economic and agronomic feasibility of the use of
Biomass Integrated Gasification/ Gas Turbine (BIG/GT) technology for power
generation, using bagasse and sugar cane trash as the
primary fuels, and pave the way for the following investment phase targeting a
wide scale replication and cost reduction of the technology. The project falls
under the Operational Program 3 of the GEF Operational Strategy on the focal
area of climate change, namely "Reducing the Long-Term Costs of Low
Greenhouse Gas-Emitting Technologies"Specific
Objectives: (a) To determine availability and volumes
of bagasse/trash biomass for potential use in BIG/GT
systems. (b) To determine the quality and costs of bagasse/trash
biomass. (c) To evaluate economic and agronomic costs and benefits of trash
substitution for herbicides, as a consequence of green cane harvesting. (d) To
evaluate existing and emerging technologies for green cane harvesting. (e) To
evaluate biomass gasification of bagasse/trash. (f)
To define and model integration of the BIG/GT system with the sugar mill. (g)
To disseminate project findings and information to the world's sugar cane
producing countries.PROJECT SUMMARY 2. Biomass
utilization for energy production, in substitution for fossil fuels, can make a
substantial contribution to limiting CO2 accumulation. The use of biomass as
fuel for electricity production in small-scale generation systems has technical
and commercial potential, if modern conversion technology is employed. 3. Under
this rationale, the Global Environment Facility approved funding during the
Pilot Phase for the Biomass Integrated Gasification/Gas Turbine Project (to
avoid confusion between the technology being developed/adapted in this project
and the project itself, the project will be referred to hereafter as Biomass
Power Generation - Woodchip Project or WBP). The aim of the WBP is to
demonstrate the commercial viability of the use of woody biomass in developing
countries as fuel for electricity production from BIG/GT technology. 4. The
proposal described here is concerned with the technology development and
research needed - in addition to, and building on, that of the WBP - to
introduce the BIG/GT technology in the sugar industry in Brazil, using bagasse and sugar cane trash as the primary fuels, allowing
the further replication and cost reduction of the technology through learning
and economies of scale. The proposed project will analyze experience to date in
the development and testing of technologies for gathering, storing and using
sugar cane trash and residues in leading sugar producing countries, with
especial attention to the GEF-financed project in Mauritius entitled Sugar
Bio-Energy Technology. To hasten worldwide application of BIG/GT technology in
the sugar industry, this project will disseminate its findings and reports to
the world's more than eighty sugar producing countries by holding two separate
workshops to discuss the focus and scope of the project as well as its final
results. The project falls under the Operational Program 3 of the GEF
Operational Strategy on the focal area of climate change, namely "Reducing
the Long-Term Costs of Low Greenhouse Gas-Emitting Technologies"5. The
progress and momentum of the GEF-financed WBP provide an exceptional
foundation, as well as opportunity, for the extension of the project to another
geographically widespread source of plentiful, low-cost biomass with
potentially significant effects on the global carbon cycle. This project will
take advantage of the work already accomplished or underway in gas turbine
development in the WBP and will build directly on bagasse
gasification assessments by GE and others, including preliminary evaluations by
contractors in the WBP. 6. This project will work closely with the WBP to
ensure that technology development is responsive to the specific requirements
of bagasse and trash as fuel. Timely GEF funding of
this project is necessary to build on the momentum achieved under the WBP as
well as to take advantage of the ongoing development of related agricultural
technologies and systems around the world in the context of southern Brazil's
cane growing season. Delay in funding this initiative would result in
unnecessary duplication of WBP-related activities at a later date, at what
could conceivably be a higher cost. Background Biomass
Energy; Biomass Power Generation; Sugar Cane7. Biomass utilization for
energy production, as a substitute for fossil fuels, can make a substantial
contribution to limiting CO2 accumulation. Global biomass production today is
120 billion tones of dry mass per year, with an energy content equivalent to
over five times the present world energy demand; however, the ten percent of
world's primary energy input due to biomass are provided, usually, in very
inefficient ways.8. The use of energy plantations (as in the WBP) or biomass
residues (as in the sugar cane industry) as primary energy sources for
electricity generation, with the most efficient technology, could have a
significant impact on reducing CO2 accumulation.9. In 1990 sugar cane production
reached 1.03 x 109 metric tons, on 16.9 x 106 ha, worldwide, in more than 50
countries. The corresponding bagasse production is
0.29 x 109 metric tons at 50% moisture, equivalent to 50 x 106 tons of fuel
oil. This extraordinary amount of renewable fuel is concentrated at the sugar
mills and is almost entirely used for energy generation at very low efficiency
levels to produce sugar and ethanol (approx. 15%). The low or null opportunity
cost provides little incentive for efficient utilization.10. Sugar cane
production has been increasing at a rate of 2.3% per year over the last years.
At the same time, the general practice of burning sugar cane fields to permit
simpler harvesting operations has been subject to growing criticism on
environmental and health grounds; this will lead increasingly to the practice
of green cane harvesting. Green cane harvesting leaves large amounts of trash
(sugar cane dry and green leaves, and tops) for energy purposes; estimates vary
from 0.10 to 0.18 tons dry mass/clean stalks fresh mass, for commercial sugar
cane. Conservatively it may be assumed that it is possible to double the amount
of this biomass at the sugar mill. One estimate indicates that bagasse and trash could reach the equivalent of 100 x 106
tons of fuel oil, at present worldwide production rates. 11. Today the
substitution of bagasse for fossil fuel as the
primary energy input to sugar manufacture and the limited production of
cogenerated electricity (usually in low efficiency, low temperature Rankine cycles) represents the sugar industry's
contribution to the reduction of CO2 emissions. In Brazil, taking into account
the effect of ethanol utilization, the net CO2 savings in emissions from the
cane industry overall accounts for as much as 18% of the country's total
emissions from fossil fuels.12. Results of the studies leading up to the
formulation of this proposal have been extensively discussed by the sugar cane
industry and the state-owned electric power system. Proposed legislation to
promote cogeneration by the private sector is being analyzed by Congress. In
particular, in the state of Sao Paulo, an agreement is under discussion among
sugar mill owners, the State's Secretary of Energy and public utilities to
promote increased power production at the sugar mills. 13. New and emerging
technologies for efficient conversion of bagasse and
trash to electrical energy can make a significant contribution worldwide to the
reduction of CO2 accumulation. Detailed evaluations of conventional (steam
based) power cycles for use in Brazilian sugar and ethanol mills indicate the
possibility of increasing the usual level of 4% conversion (bagasse
to electricity; cogeneration) to 16% or slightly more, including yeararound operation with cane trash. Hypothetical BIG/STIG
systems could achieve at least 27%. Power production potential could represent
a substantial portion of total current electricity production. JUSTIFICATION The Available Industrial Technology14. To increase the role
of biomass for electric power production to significant levels it will be
necessary to have either (or both) higher efficiency-low capacity (15 50 Mwe) cycles or very low cost, abundant sources of biomass.
This requirement points to the use of BIG/GT systems fueled from energy
plantations or agricultural residues.15. An extensive study was made, in
preparation for this proposal, of existing cogeneration systems in Brazilian
sugar mills; a sample of 42 sugar mills was made (of 400 currently in Brazil,
processing 220 x 106 tons of sugar cane, nearly 20% of global production).
Efficiencies were examined of steamraising bagasse boilers and steam turbine conversion to mechanical
power or electricity, as well as process steam consumption. The optimal
configuration of existing technology, with associated costs for retrofitting or
substitution, were evaluated for all main items (boilers, turbines, generators,
process steam consumption). Timeout statistics at the mill power station were
analyzed; management techniques and bagasse storage
systems were evaluated.16. The study's main conclusion was that conventional
co-generation schemes with steam turbines can be greatly improved if the
purchasing price of electricity is raised to the avoided cost for the
integrated hydroelectric system. However, green cane harvesting with trash
recovery could lead to a much higher level of power production and quality,
allowing yeararound operation with biomass fuels.
Development of this technology is also necessary to achieve lower costs with
the BIG/GT technology, when much higher outputs would be reached.17. The BIG/GT
concept, growing out of the work on IGCC (integrated coal gasification/combined
cycle powers generation) for biomass utilization, points to the potential for
high efficiency at the low power range, associated with possible low cost.
Technology options to be considered in this context include: (a) Industrial or aeroderivative gas turbines (b) Atmospheric or pressurized
gasification (c) Combined cycles or steaminjection
cycles (also, cogeneration)18. The GEF-financed WBP program
now underway is currently examining these options. 19. Effective integration of
the sugar mill and BIG/GT system will require analysis of the following
alternatives: (a) Independent mode (surplus bagasse
trash used as fuel for an independent BIG/GT system). (b) Fully integrated mode
(all bagasse/trash is gasified; steam from heatrecovery boiler is used for process in season). (c)
Partial integration mode (some of the bagasse trash
fueling through conventional boilers, providing a portion of the steam/power
needs for the sugar mill).20. The last option can lead to a much simpler (nointerference) handling of the combined energy system, with an intermediate overall conversion efficiency
(conversion would be maximized with the fully integrated mode). Preliminary
analyses for sugar mills with capacities of 1 to 3 x 106 tons of sugar
cane/year, in the three modes of operation, were performed. Power outputs and
associated costs were evaluated. Ratios of conversion (biomass to electric
energy) ranged from 21% (independent mode) to 36% (fully integrated,
cogeneration).21. Bagasse and trash gasification
would require further analysis (beyond that required for woodchips in the WBP)
on some specific issues: (a) The feeding of loose material; the high specific
volume would make utilization of feeders tested for woodchips difficult; the
problem might be considerably more important for pressurized systems. (b) The
possibility of higher alkali levels in the green portions of trash, leading to
lower sintering points for ash in gasifiers. Again,
pressurized gasifiers (in principle, requiring higher
temperatures) would pose special problems. (c) Bagasse
drying technology, both steambased or heated air
(flue gas) -based systems, is sufficiently known. Best options would be to the
BIG/GT/sugar mill integration studies; the use of a complementary autonomousdrying system is probably required since the
moisture in bagasse trash varies significantly.22.
Gas turbine options and development needed are exactly the same as for woodchipbased gas, and no further problems are expected
after gas cleanup. Available and Emerging Agricultural
Technology23. Harvesting, loading and transportation account for 34% of
the raw material (sugar cane) costs in Brazil. Most common systems in use today
consist of preburning, manual harvest (only 10%
mechanized), and mechanical loading on trucks for transportation to the mill. Mechanical harvest in done either with chopped or whole sugar
cane.24. It is expected that environmental legislation will continue to
lead towards green cane harvesting. One of the main objectives of the
preparatory work for this proposal was to identify options for promising green
cane harvesting systems. The search for costeffective
systems considers the full use of trash; utilization for energy (electric
power, fuel oil substitution or even ethanol from hydrolysis) could potentially
pay for the added cost of green cane harvesting and trash recovery. 25. A
detailed evaluation was carried out of possible alternatives, using the bestavailable information on existing equipment, and
extrapolating (in some cases) performances measured in experiments with new
machinery, mainly at Copersucar. Results led to the
selection of four alternatives for whole and chopped green cane harvest, handling
and transport.26. Performance standards (i.e. final sugar cane quality, level
of impurities and losses) and costs for equipment in each alternative were
established. Some of the alternatives employ recently developed equipment (i.e.
rotary push piler, cane transporter). Development
requirements were identified for equipment in prototype stage to redirect it to
green cane harvest (i.e. whole cane tworow harvester,
cleaning station). As well, evaluation of baling equipment for sugar cane trash
is required. Trash quality 27. Common calculations in
Brazil indicate that about 10% (dry mass) of the stalk mass (whole stalk) is
trash, a significant amount, considering that bagasse
(dry mass) is 12.5% of whole stalk mass. Experimental results worldwide vary
from 9% to 28%. A more precise estimate of trash mass is essential for the
economic analysis of the integrated BIG/GT/sugar mill system. 28. Trash quality
(mainly alkali levels) may be a decisive factor for its utilization in BIG/GT
systems. For this report, experiments were conducted showing that total alkali
in the green portions of trash could reach up to 10 times the values found in bagasse; however values for dry leaves (a major
constituent) were equivalent to those in bagasse.
Average humidity is fairly uniform (50%). As mentioned above, precise knowledge
of alkali levels will be helpful in determining gasifier
type.29. Preliminary research was carried out on the possibility of using trash
left on site as a weed suppressant, leading to a reduction in the use of
herbicides and associated costs. Even with 67% of the trash removed, a
reduction of nearly 80% of weed infestation was observed. The optimum range of
percentages of trash left in soil would be determined by the savings from
avoided herbicide utilization as compared to the value of trash as fuel. Preliminary Cost Evaluation for Recovered Trash and Electric
Energy30. A preliminary analysis of return on investment was performed
on an integrated BIG/GT-sugar mill system to verify: (a) The
economic aspects of unburnt sugar cane harvesting and
the trash costs associated with each of the technical alternatives identified
above. (b) The energy price required for each technical alternative based on
the export of surplus electrical energy. 31. Results are based on expected
performances of several equipment items and processes; many other assumptions
were made.32. Included among many factors for the trash costs were the
following: (a) The effect of vegetal impurities on
sugar cane milling (for each alternative). (b) Possible elimination of trash
raking and herbicide application, depending on the trash blanket left in field.
(c) Cane losses in the harvest (each alternative) and options for trash
recovery.33. Eight alternatives were considered for unburnt
whole or chopped cane, and costs were compared to a baseline representing
current procedures in the most developed (lower cane cost) region in Brazil.34.
Results are very promising; some alternatives show that the total cost for
harvesting and transporting unburnt sugar cane +
trash to the mill is lower than the cost today for harvesting and transporting
burnt sugar cane (without trash). This is due to the much higher productivity (costeffectiveness) of prototype equipment as well as its
performance with respect to cane quality (sugar cane dry cleaning avoids losses
in washing cane, etc.). At least two alternatives were identified for follow-up
research. Electric energy generation cost35. Plant
configurations considered in the BIG/GT/sugar mill integration studies were analyzed
for the three operating modes (independent, full cogeneration, partial
cogeneration). All relevant investment (reducing energy and process steam
consumption; storage areas; bagasse and trash
reclaiming systems, auxiliary steam systems; BIG/GT system) were taken into
account. Biomass availability (bagasse and trash) was
determined and biomass costs were taken to be at least the opportunity cost
(whenever the reclaiming trash cost was higher, the higher value was
considered).36. From the set of 24 results (8 alternatives, 3 operational
modes), some important considerations can be made. Coupled with the previous
section on trash cost, those considerations are: (a) In determining trash cost,
the effect of the vegetal impurity on cane crushing capacities and sugar losses
must be considered in addition to the costs of collecting, transporting and
processing the trash. (b) Trash costs depend strongly, as expected, on the
sugar cane harvesting system. The alternatives studied present a range of trash
costs (50% moisture) from US$ 4.00/t (opportunity cost) to US$ 24.60/t (chopped
unburnt sugar cane and trash baling compared with
whole unburnt sugar cane and transporting/ processing
the trash together with the sugar cane. (c) The use of a BIG/GT system
integrated in a sugar and alcohol mill, with varying load factors, derating and rates of interest, would lead to energy costs
as shown below.
Case Derating/ Electric energy costs
interest rate/ (US$/Mwh)- excl state
load factor tax
1. Independent BIG/GT Derating 20%/ 12% 73-77
combined cycle interest/ 80% load
operation (I) factor
2. BIG/GT in full No derating/ 59-63
cogeneration mode (C) 12% interest/
85% load factor
3. BIG/GT in partial No derating/ 44-46
cogeneration mode (P) 8% interest/
85% load factor
37.
Assumptions in Case 1 are, by design, conservative. A load factor of 85% is
commercially feasible. Interest rates depend on prevailing economic situations
and cost of capital at local levels. Results of the WBP, to date, indicate
turbine derating to be unnecessary. Through learning
about the technology and through replication, the set up of the plant will be
optimized and performance improved , thus leading to
further cost reductions.38. The very low relative cost of fuel (trash and bagasse) reflects the actual (and estimated future)
situation in Brazil if the technologies under consideration for cane harvesting
are successful. It must be noted that this situation (i.e., very high capital
costs as compared to fuel costs even for a BIG/GT system) is different from
those for other thermal systems (even the woodchip BIG/GT system). Some
implications are clear; for instance, small gains in efficiency for thermomechanical conversion (pressurized systems and more
advanced technologies) may become difficult to justify.Proposed
Development Program: Objectives and Activities Objectives 1 and 239. To determine availability and volumes of bagasse/trash
biomass for potential use in BIG/GT systems and to determine the quality and
costs of bagasse/trash biomass. (a) Complete
studies on trash availability and quality (Copersucar).
Objective 340. To evaluate economic
and agronomic costs and benefits of trash substitution for herbicides, as a
consequence of green cane harvesting. (a) Complete studies on herbicide
reduction with cane trash blanket management (Copersucar).
Objective 441. To evaluate existing
and emerging technologies for green cane harvesting. (a) Complete the
development of new equipment for green cane harvest and handling (Copersucar): (i) Copersucar whole stalk harvester and sugar cane dry
cleaning station. (ii) Test and improve largesize
balers. (iii) Test comparatively, in green cane harvesting, existing equipment.
(iv) Evaluate the selected four alternatives (sugar
cane final quality, trash recovery and costs). (b) Environmental Impact
Assessment of proposed green cane system on agroecosystem
(i) Studies on effect of green cane harvesting system
on soil biota, nutrient recycling, soil structure. Objective
541. To evaluate biomass gasification of bagasse/trash. (a) Gasification tests (i) Atmospheric gasification and gas cleanup (TPS). (ii)
Pressurized gasification and gas cleanup (Bioflow).
Depending on results from scoping tests (bagasse and
trash) and engineering evaluation of bagasse feeding
costs, full gasification tests in the Varnamo plant
will be performed. Objective 6 42. To
define and model integration of the BIG/GT system with the sugar mill.
(a) BIG/GT Sugar mill integration analysis (i)
Atmospheric gasification (Copersucar + TPS); (ii)
Pressurized gasification (Copersucar + Bioflow); (iii) Final economic analysis (Copersucar).43. The previous experience with the BIG/GT has
made it possible for Copersucar to prepare this
proposal with a high level of detail regarding obligations and costs. The
selection of companies for equipment/process test and development, following
the steps of the ongoing WBP to avoid unnecessary costs, has resulted in the
two gasifiergas clean up teams (TPS and Bioflow); and Copersucar proposes
its own Technology Center as the leader for the work in Green Cane Harvesting
and Fuel Availability, and the engineering integration with the sugar mill. Objective 744. To disseminate project findings and
information to the world's sugar cane producing countries. (a) Development of
an information dissemination strategy (b) Production of informational materials
e.g., pamphlets, videos, etc., (c) Selected media campaigns in national and
international journals and periodicals (d) Workshops: one workshop to inform
interested public and private sector sugar cane producers of the scope and
intent of the project; one workshop to inform of the results of the project.Implementation Arrangements 45. A simple management
structure is proposed, based on the existing structure for the WBP program. The
system must be able to reach the proposed objectives and ensure the proper
controls to administer GEF funds efficiently.46. Strong interaction with the
WBP program is essential; in principle, this project should be seen as an
extension of the WBP. The scope of this extension is, however, simpler, not
including phases beyond the technology development. It is not necessary, at
this point, to consider a structure that will conduct commercial implementation
of a pilot plant.47. The management structure of the project is outlined in the
Annex to this brief. The Brazilian Government, through the Ministry of Science
and Technology (MST), will be responsible to the GEF Implementing Agency for
compliance with the obligations regarding the execution of this project. The
MST will be the recipient of the grant from GEF to be held in a "Lock
Box" account; disbursements will be recommended by a Management
Committee" (MC). The MC will be comprised of representatives of MST, Copersucar and the ongoing WBP programme.
48. Detailed timetables for all project activities have been proposed. They are
two main considerations: (a) A large portion of the
experimental work on green cane harvesting can only be performed during the
harvesting season (6 months/year, May to November). (b) Gasification tests will
match the experiments with woodchips for the BIG/GT, usually following the WBP
experiments, to take full advantage of the knowledge and experience acquired there.Incremental Costs49. As this project will lead to the
extension of BIG/GT application to sugar industry, it will have significant
implications for the rest of the world. As currently designed, the entire
project is incremental in nature, as it would not be undertaken without GEF
support. Baseline Situation:50. This project builds
upon the earlier BIG/GT project being supported by GEF which links biomass
gasification to the generation of electricity, making use of biomass integrated
gas turbines. Since this activity is already being supported by GEF, it already
forms part of the baseline. In addition, Copersucar
will be spending $2.8 million to redesign and obtain new harvesting machinery.
The project supplements these initiatives to make sure that the machinery can
be used to obtain both the cane and trash for use in gasification.51. There
will be no project-relevant national or global benefits in the baseline
situation. Project Case:52. In this project, Copersucar is already advancing in the development of new
green cane harvesting equipment. However, the project investment of $3.75
million is required to ensure that this machinery fits the specifications
required to get the additional global benefits from gasifying the bagasse and trash. The incremental cost equals the project
cost of $3.75 million. The project will enable Brazil (and the rest of the
world) to generate large quantities of electricity through making efficient use
of bagasse and trash which are currently wasted. On a
global level, if Brazil builds one power plant to operate using bagasse and cane trash, the reduction in carbon emissions
will fall between 177 and 412 tonnes of CO2 per annum
(depending upon the assumptions used). For the rest of the world, the potential
reduction in CO2 could range between 0.86 and 2.0 billion tonnes
per annum if bagasse is used to displace fossil-fuel
generated electricity. Budget53. The Budget includes funding required for
development work at Bioflow, TPS, and Copersucar as well as funding for the administrative and
managerial activities of the Management Committee (costs of fuel and shipment
for gasification tests, traveling etc.).54. Copersucar
is investing an amount of US$ 2,767,100 over two years (May 1993 April 1995) on
programs for cane harvesting development and cogeneration technology
improvement in sugar mills. This does not include the cost of prototypes (a few
million dollars) and the specific expenses of 6 sugar mills involved in the
program (personnel and equipment). The additional funding required for Copersucar for this project covers expenses specifically
related to trash recovery, and integration of BIG/GT systems with the sugar
mill. PROJECT BUDGET: FUNDING REQUIREMENTS
Item Responsible Description Cost
( US$)
Unburnt cane harvesting: Mechanical components 5,000
Equipment Development & Field Engineering development: 87,500
Testing Copersucar Personnel
Material Analyses (30) 4,500
Equipment Development Development and Testing: 257,800
Whole cane harvester Personnel 1,000
Cane Cleaning Station Phase 1: Transportation 5,000
Baler Studies Testing: Personnel
Phase 2: Baler cost 80,000
Testing: Personnel
Field test of agronomic routes 23,200
Transportation costs
Maintenance costs 12,000
Personnel 11,000
170,500
Studies: Herbicide reduction Copersucar Personnel 56,700
with trash use
Studies: Trash availability Copersucar
and quality
Trash availability Personnel and analyses 18,900
Trash quality Personnel and analyses 16,800
Gasification Tests
Atmospheric gasification and TPS Total cost (estimated) 650,000
gas clean-up
Pressurized gasification and Bioflow Scoping tests* 350,000
gas clean-up
Gasification and feeder tests Bioflow Total cost (estimated): Pilot 670,000
plant test
BIG/GT Integration Analyses
Atmospheric gasification system TPS Gasification: information for 190,000
TPS tasks process and
basic engineering
Pressurized gasification system Bioflow
Bioflow tasks Gasification: information for 190,000
process and
Integration Analyses and Copersucar basic engineering
Final economic analyses 380,200
Plant integration analyses
(both systems);
includes cost assessments and
economic analyses
Dissemination workshops Copersucar One workshop to inform 100,000
interested public and private
sector sugar cane producers of
the scope and intent of the
project; one workshop to
inform of the results of the
project.
Environmental Impact Assessment Copersucar Studies on effect of green 250,000
of proposed green cane system on cane harvesting system on soil
agroecosystem function biota, nutrient cycling, soil
structure, etc.
Miscellaneous / Contingency Management Committee Bagasse supplies to 162,000
gasification tests
in Sweden
50,000
Other
TOTAL 3'742,100
*
The work of Bioflow will follow a step-by-step
approach as follows: scoping gasification tests are performed and evaluated
with respect to using bagasse and trash as fuels; a
feasibility study and test of transportation, handling and feeding of these
fuels is carried out in parallel. Only if the outcome of these activities is
encouraging, the following will be performed: process engineering and
preliminary basic engineering (US$ 190,000), and feeder and gasification tests
(US$ 670,000). If the outcome is unfavorable, the funds allocated to these
budget lines (total US$ 860,000) will be reverted to the GEF. CALCULATION OF
INCREMENTAL COST Costs National Benefits Global Benefits
Baseline 0 Project Cost ----- -------
$2.767 m
Copersucar Cost
Project Case $3.5 m Project Cost For Brazil: Potential to use For Brazil: With one BIG/GT
$2.767 m Copersucar bagasse/trash to generate up plant, between 177 and 412 * 103 t
Cost to 628*103 GWH/annum CO2 avoided
For Rest of World: Up to For Rest of World: Up to 2*109 t
2*106 GWH/annum CO2 can be avoided annually
Increment US$ 3.5*106 Massive Potential for Enormous Potential for CO2
Sustainable Power Generation avoidance
LETTER
OF COUNTRY ENDORSEMENT TECHNICAL REVIEW BRAZIL BIOMASS POWER GENERATION: SUGAR
CANE BAGASSE AND TRASH OVERALL TECHNICAL FEASIBILITY OF THE TECHNOLOGIES OR
SYSTEMS PROPOSED1. The proposed project is primarily a technology development
effort having two relatively distinct parts: (1) industrial technology
development, referring to equipment for the processing of sugarcane and for the
efficient conversion of bagasse and cane trash into
electricity, and (2) agronomic technology development, referring to methods for
effectively harvesting and cleaning green cane to make cane trash available as
a power plant fuel. Also proposed are some field measurements intended to
establish the effectiveness of using a blanket of trash as an herbicide
substitute and to determine accurately the quantities of trash that could be
made available to a power generation facility. There are good overall prospects
for successful technology development in both the industrial and agronomic
areas. 2. The industrial technology development effort would be closely linked
to the GEF's Brazilian biomass gas turbine demonstration project (the WBP). The
WBP is the largest of about a half-dozen substantial biomass-gasifier/gas turbine (BIG/GT) development/ demonstration
efforts ongoing worldwide. Construction of the first complete BIG/GT facility
(a cogeneration facility generating 6 MWe and 9 MWheat) was finished early this year (in Sweden), and
preliminary shakedown testing is ongoing. Full-plant testing is scheduled to
begin by the fourth quarter of this year. The work proposed by Copersucar should make uniquely important contributions to
the development of BIG/GT technology for applications with cane residues, but
the overall success of the BIG/GT technology development effort will depend at
least as much on the success of the WBP and the other ongoing demonstration
efforts.3. The agronomic technology development effort would build
significantly on earlier technology development work in Brazil (especially at Copersucar), and would also draw extensively on
commercially established cane de-trashing technology developed in Cuba. The
Cuban sugar industry uses some 900 "cane cleaning" stations to strip
and separate trash from sugarcane that is cut green (without pre-burning the
fields). The majority of Cuba's sugar cane (80 million tonnes
total annual production capacity) is machine cut and cleaned. Thus, while the
green cutting of cane is not practiced to any significant extent in Brazil
today, the fact that systems for doing so are successfully operating elsewhere
suggests that the prospects are good for developing such systems in Brazil,
especially given Copersucar's capabilities and
commitment to doing so.FEASIBILITY OF THE PROJECT'S
PROPOSED DESIGN AND EXECUTION 4. The proposal appears well designed, insofar as
technology development aspects are concerned. There has been substantial
preliminary work done (especially in agronomic areas), on the basis of which Copersucar has prepared detailed descriptions of the work
needed. The proposal is particularly well designed in that in both the
industrial and agronomic areas, a set of alternative approaches are identified,
and within each approach are branch points. For example, on the industrial
side, the approach will be to consider both of the gasifiers
being considered for the WBP, even though the atmospheric pressure system would
appear to have some advantages. The proposal builds in a decision point after
relatively inexpensive laboratory-scale tests to determine whether to proceed
with larger-scale tests (and incure more substantial
costs) with the pressurized system. This proposal design lends confidence that
the work will be able to identify a range of feasible technological solutions,
both industrial and agronomic.5. One item to note regarding project design is
that the agronomic activities are largely constrained by the dates of the
harvest season (Nov. - May). If tests are not completed during this window of
opportunity, the project could be delayed considerably.DEMONSTRATION
VALUE AND POTENTIAL FOR REPLICATION IN OTHER REGIONS OF BRAZIL AND THE
DEVELOPING WORLD 6. It would be difficult to overstate the demonstration value
of the proposed project. There are approximately 80 developing countries with
substantial sugarcane-based industries, all of which stand to benefit from a
successful technology development effort along the lines proposed by Copersucar. 7. The case may be overstated for potential
power generation in some countries, e.g. island countries where land may be
limited for further planting of sugarcane. Even in these countries, however,
the application of BIG/GT systems could significantly enhance the national
supply of electric power. For example, Cuba has a present sugarcane production
capacity of about 80 million tonnes of cane. If Cuba produces
this much cane, its sugar industry could generate close to 40,000 GWh/year from cane residues using first-generation BIG/GT
technology. For comparison, the Cuban electric utility system generates 10,000 GWh/year (or less) today, almost exclusively from imported
oil. Cuban sugar factories export a small amount of power (about 70 GWh/year) to the grid. 8. The potential for replication of
the project in and out of Brazil is high for the industrial aspects. Agronomic replicability may be somewhat more problematic because of
the fact that there are many different "cane cultures" in different
countries and even within different regions of Brazil (especially the Northeast
versus the Southeast). Harvesting and transporting systems range from highly
mechanized--as in Cuba with its machine harvesters, trash cleaning stations,
and dedicated rail system for transport to the mills--to highly manual
systems--such as India, where hand cutting and bullock-cart transport of cane
to the mills is not uncommmon. Given this, the
agronomic adaptations that Copersucar is considering
may be less effective in other cultural contexts. Nevertheless, Copersucar plans to try a number of alternative approaches,
and different elements from different approaches may be workable in other
contexts. In any case, it would be important to document well in the agronomic
area, what worked and what didn't work. It will also be important to
communicate this information to those presently operating different agronomic
systems from those in Southeast Brazil. ECONOMIC AND INSTITUTIONAL FACTORS
REQUIRED TO ENSURE SUSTAINABILITY 9. A key issue to
insure the economic and institutional viability of cane-powered BIG/GT systems
is that cogenerators be paid the full avoided cost
(including both energy and capacity credits) for electricity sold to the grid.
The equivalent of the United States' PURPA legislation (Public Utility
Regulatory Policies Act) is needed in Brazil and many other cane growing
countries to encourage the needed private investment in cane power. Private
investors are likely to be hesitant to act without such legislation.10. The
proposal shows estimates of the electric energy prices required to achieve real
internal rates of return of 12% for different BIG/GT power generation
alternatives (Table 21, p. 80). The prices estimated there are high compared to
long-run marginal costs for new electricity supply in Brazil. If the
assumptions behind these calculations are borne out in practice, the BIG/GT
idea does not look economically sustainable, even with a
PURPA-type legislation in place. 11. However, three of the key
assumptions used in the calculations should be reconsidered, as a result of
which required electricity prices will be such that the cane-BIG/GT systems
will clearly be economically viable. First, the proposal calculations assumed a
20% derating of the gas turbine output based on the
best available knowledge at the time. Recently developed information in the WBP
project indicates that essentially no derating is
required. Second, the load factor of 80% assumed in the proposal seems very
conservative. The WBP project foresees a load factor of 85% for wood-fired
BIG/GT plants, and industrial facilities typically operate with load factors of
90% or higher. Third, the 12% real rate of return required is artificially high
by most investment standards. This value may have been selected to allow for
high inflation rates in Brazil. Under "normal" conditions, a real
return of 8% would be reasonable, as has been used in the WBP calculations.INCORPORATION OF RELEVANT STAKEHOLDERS INTO
THE DESIGN AND EXECUTION OF THE PROJECT 12. The primary direct stakeholders in
this project include the sugar industry in Southeast Brazil, which stands to
gain an understanding of technology that will help generate a substantial new
revenue source, and the people of Brazil, who stand to see expanded renewable
electricity supplies and attendent environmental
benefits like reduced burning of cane fields. The sugar industries outside of
the Southeast of Brazil (including the Northeast Brazilian industry and those
in other countries) are not explicitly involved in the project as presently
conceived. In this regard, I would recommend an important addition to the
proposal: a mechanism to insure that knowledge gained through the work is
effectively transferred to other sugar industries outside of Southeast Brazil,
including the Northeast Brazilian industry and industries in other developing
countries. One possibility would be to hold a workshop (2 or 3 weeks long?) at
the end of the project to review all industrial and agronomic findings with
individuals invited from a number of different cane growing countries. Some GEF
funds should be provided to augment the costs of putting on this workshop, but
attendees should be required to cover some, if not all, of their travel and
per-diem costs.MONITORING AND EVALUATION OF THE
PROJECT 13. Aside from regular reporting on progress, there appears to be no
other significant monitoring or evaluation activities included in the proposal.
A mid-project, independent expert review would probably be beneficial, both to
provide guidance to the project and to insure accountability. An independent
project evaluation after completion might also be useful to understand the
successes and failures of the overall approach for use in the design of future projects.JUSTIFICATION OF THE PROJECT IN TERMS OF GLOBAL
ENVIRONMENTAL BENEFITS TO BE ACHIEVED AND EXISTING NATIONAL ENERGY STRATEGIES
14. Bagasse and cane trash from sugarcane are
essentially CO2-neutral energy sources, because the CO2 released in their use
for energy is reabsorbed by new sugarcane growth. (Some fossil fuel is used in
the production, harvest and transport of sugarcane to mills, but this is
relatively small and is neglected in the following calculation.) Based on the
year-2027 country-by-country electricity production potentials shown in Table
1, the annual CO2 emissions from fossil-fueled electricity production that
could be displaced ranges from 0.86 billion tonnes
CO2, assuming the displaced electricity would otherwise be produced in
highly-efficient natural gas-fired combined cycles, up to 2 billion tonnes CO2, assuming coal-based electricity is displaced.
To put these numbers in perspective, total global CO2 emissions from all
sources are estimated to be about 7 billion tonnes
today. In cane-growing countries where fossil fuels are imported, there could
be a substantial increase in energy security accompanied by savings in foreign
exchange spending through use of cane power.GENERAL
CONCORDANCE OF PROJECT OBJECTIVES, ACTIVITIES, OUTPUTS, BUDGET AND
IMPLEMENTATION AND EXECUTION ARRANGEMENTS 15. Overall, the project is well
conceived. The activities are well chosen and their implementation is well
designed to achieve the desired objectives. The outputs could be augmented
slightly to improve the value of the project to regions outside of Southeast
Brazil and project monitoring and evaluation should be added to the proposal.
The budget appears reasonable, and it includes conditional items that may not
need to be pursued, depending on the decisions made at well-defined branch
points in the project. The project management structure--especially the close
coordination with the WBP project--makes very good sense.CALCULATION
OR ANALYSIS OF INCREMENTAL COSTS TO BE FINANCED BY THE GEF TO ACHIEVE THE
GLOBAL BENEFITS SPECIFIED IN THE PROPOSAL 16. From the GEF perspective, the
primary global benefit that would ultimately be achieved if the project is
successful would be reductions in CO2 emissions through displacement of fossil
fuel for electricity production by electricity produced from CO2-neutral
sugarcane residues. It is difficult to assign a CO2 emissions credit to this
specific project, but it is clear that a successful project would do much to
catalyze the implementation of BIG/GT systems in sugarcane processing
facilities worldwide. At a minimum, a successful project would catalyze the
implementation of BIG/GT systems in Brazil--the largest producer of sugarcane
in the world, accounting for about 30% of the global total in the late 1980s.
For the purpose of calculating a cost of saved CO2, two scenarios are
considered. 17. In the first case, assume that the project leads to the startup
in the year 2000 of one BIG/GT cogeneration plant at a facility processing one
million tonnes of cane annually in Brazil. The
facility would produce 430 GWh/yr of electricity in
excess of that needed to operate the factory (see proposal, page 32). The
carbon emissions saved (in thousands of tonnes of
CO2) in the first year, assuming coal, oil or natural gas were displaced, would
be 412, 325, or 177, respectively. Over a twenty-year plant lifetime, the total
discounted CO2 savings (assuming a social discount rate of 3%) would be 6130,
4835, or 2633 tonnes. If the entire cost of the
proposed work ($3.1 million) were charged against these CO2 savings, the cost
of saved CO2 would be low: $0.5/tCO2 ($1.8/tC),
$0.6/tCO2 ($2.4/tC), or $1.2/tCO2 ($4.3/tC).18. It may be more appropriate to consider that the
project would catalyze the implementation of a series of BIG/GT facilities. For
the purpose of calculating an alternative cost of saved carbon to that
calculated above, assume the project successfully catalyzes the installation of
10 BIG/GT cogeneration facilities in Brazil or somewhere else in the world in
the year 2000 at mills processing 106 tonnes of cane
annually. Each of these cogeneration facilities would produce 430 GWh/yr of electricity in excess of that needed to operate
the factory. Furthermore, assume that the growth rate in the implementation of
new BIG/GT facilities averages, say, 10% per year from 2000 to 2027. This would
result in a total BIG/GT power generation of some 64,000 GWh
in 2027. This is about 10% of the total potential cane power calculated for
Brazil in Table 1 or 3% of the global potential.19. Assuming the cane power
displaces fossil fuel power, the discounted carbon emission savings, assuming a
social discount rate of 3% per year, would be 318 million tonnes
if coal were displaced, 250 million tonnes if oil
were displaced, and 136 million tonnes if natural gas
were displaced. If the entire cost of the proposed work ($3.1 million) were
charged against these CO2 savings alone, the cost per tonne
of CO2 saved would be extremely low: $0.010 if coal were displaced, $0.12 if
oil were displaced, and $0.023 if natural gas were displaced. Per tonne of carbon saved, these costs would be 3.6 cents for
coal, 4.5 cents for oil, and 8.4 cents for natural gas. BIOMASS POWER
GENERATION: SUGAR CANE BAGASSE AND TRASH Concerns of the CEO of the GEF with
proceeding with Brazil bagasse projectSUMMARY1. The
two reasons indicated by the CEO of the GEF (in his memo of Dec. 22, 1994 to
Ian Johnson) for deferring the Brazil bagasse project
are (i) to await clear documentation on lessons
learned from comparable projectsspecifically,
"comparable initiatives in Brazil, Mauritius, and India" (memo of
Dec. 20, 1994 to ElAshry from Ian Johnson); and (ii)
to await clarification on whether the longterm
operational strategy for climate change supports further activities in this
type of biomass power generation.2. Regarding the first reason, to my knowledge
there are no "comparable initiatives" currently ongoing or planned in
Brazil, although there is obviously complementarity
with the GEF biomass gasifier/gas turbine (BIG/GT)
commercial demonstration project in Brazilin fact,
the bagasse project is by design a complement to the
BIG/GT project. As for the Mauritius and India activities, I presume these
refer to the GEF projects that have already been approved, but which are still
at early stages of implementation. I have reviewed the description of the India
project given in the July 1994 GEF Chairman's Report (Part Two), and I have
reviewed the February 1992 Project Document for the Mauritius Sugar Bioenergy Technology project. For reasons I elaborate
below, it would seem that there is little that the Brazil bagasse
project would learn by waiting for progress in either of these projects. There
is some potential overlap only with one of the activities in the Mauritius
project, but the Brazil project is already considerably further advanced in
this particular area. This is the case because Mauritius has had some delays in
its project, while Copersucar (the organization that
will carry out the Brazilian project) has expended its own resources (up to the
limit specified in the bagasse proposal) to progress
this far.3. While there is no significant overlap among the India, Mauritius,
and Brazil projects, there is some nice complementarity
among them, which would argue for pursuing them in parallel: the India project
targets institutional innovation to encourage biomassbased
cogeneration in sugar mills with existing technology, the Mauritius project
seeks primarily to demonstrate various commerciallyavailable
technology options for increasing electricity production from sugarcane
residues, and the Brazil project seeks to speed the commercialization of
advanced (gasificationbased) cogeneration systems
(using bagasse and sugarcane residues as fuel) that
promise significant technical and economic improvements over existing
commercial cogeneration systems.4. On the issue of gasificationbased
power generation as an activity in the GEF's longterm
operational strategy for climate change, it is worth noting that privatesector energy industries (including the Shell
International Petroleum Company) are beginning to recognize the potential
technical and economic attractiveness of such advanced biomass energy systems
and the large potential markets that exist in developing countries. The
generally good public relations generated by a company's involvement with the
technology (due to its greenhouse friendly nature) is
also an attraction. While the private sector is growing increasingly interested
because of potential commercial and public relations returns, continued publicsector support of the commercialization of advanced
biomass energy systems is warranted to insure that the technology is
commercialized as rapidly as possible. Also, publicsector
support is warranted because of the potential contributions that modernized
biomass energy systems could make to sustainable development, especially in
rural areas, where most biomass energy industries will be established.5. While
there do not appear to be grounds for delaying the Brazil bagasse
project to wait for results from India and Mauritius or for clarification on
the operational strategy, there are some good reasons for proceeding without
delay. As explained below, a further delay would mean at least 12 months before
some key aspects of the project could be pursued (due to the requirement of
synchronizing with the harvest season). Isaias Macedo, Technology Manager at Copersucar,
estimates that such a delay would likely lead to at least a 30% increase in the
overall cost of the project. Perhaps as importantly, the momentum that is being
generated in the BIG/GT project and through the advance work by Copersucar on the bagasse project
would be difficult to fully regain.6. Even more significantly, the private
sector would be delayed in commercially tapping the benefits of gasifier/gas turbine systems using sugarcane residues as
fuel [1]. Since cogeneration at sugar mills is attracting privatesector
interest at a rapidly growing rate in Brazil and a number of other countries,
increasing amounts of private capital are likely to be invested in cogeneration
systems in the coming years. Demonstrating the promise of a new technology
(BIG/GT) that is more efficient and economical than conventional systems (steam
turbines) in sugar factory applications may be important in redirecting capital
investments. Once investments are made in conventional systems, the capital
will be locked up for 20 years or more.INDIA AND
MAURITIUS PROJECTS7. India. The emphasis in the India project is on facilitating
institutional innovation for the purpose of encouraging expanded implementation
of conventional (boiler/steam turbine) cogeneration technology in sugar mills.
While the use of sugarcane tops and leaves (trash) as a supplemental fuel to bagasse is mentioned, the systematic development of new
technology for collecting and utilizing tops and leaves for gasification is not
included in the project description. Rather, the project is ... designed to
address the major market, financial and institutional obstacles to the
introduction of these [already commercially available, but not widely used in
India, cogeneration and biomass fuel supply] technologies and thereby
demonstrate their competitiveness with other sources. (p. 72
in Chairman's report, with emphasis and parenthetical comment added.)
... The innovation in this project includes the development of institutional
and technical capacity in India to help transfer, demonstrate, and
commercialize advanced energy efficiency and renewable energy options for power
generation. The project will feature state of the art efficiency techniques and
monitoring activities as well as innovative institutional approaches, including
those in marketbased operation and management
practices, integration of marketbased and regulatory
approaches to monitoring and enforcement, and financing options for new
technologies. (p. 68, emphasis added)8. Thus, it seems
that there is little or no overlap between the Brazil and India projects. (All
of the effort in the Brazil project is aimed at new technology development to
facilitate the commercialization of gasifier/gas
turbine cogeneration systems for sugar mill applications.) On the other hand,
there is some complementarity between the two
projects. The institutional innovations that will be pioneered in India could
provide some guidelines for other countries in establishing electricity exports
from sugar mills. The India project could only provide broad guidelines,
however, because of differences among countries in institutional structures,
cultures, etc. Furthermore, it is not apparent that there would be major new
lessons that Brazil could learn because Brazil has already been pursuing some
major institutional innovations in the area of electricity sales by private
sugarcane processors [2].9. Mauritius. The Mauritius project involves several
distinct activities. Only one of these, the development or local adaptation of
technologies for handling and processing sugar cane tops and leaves, is
potentially relevant to the Brazilian project. As in the India project (and
unlike the Brazilian project), the Mauritius project is targeting the use of
tops and leaves in conventional (boiler/steam turbine) cogeneration systems.10.
Sugarcane in Mauritius, as in most of the world including Brazil, is typically
burned on the field before harvest. Burnt cane retains its sugar, but is much
easier to harvest (especially manually) than is whole green cane. In the
Mauritius project, the infield experiment stage includes assessing the
mechanical and/or manual cutting of whole green cane (i)
that is then transported to the factory where tops and leaves are separated
from the stalk for use as a boiler fuel and (ii) the tops and leaves of which
are separated from the stalk at the time of cutting and separately collected
and transported to the factory. (See p.15 of Project Document.) It is not clear
how far Mauritius has progressed to date with this part of the project.11.
Despite the CEO's suggestion that the Brazil project be delayed until lessons
from Mauritius are documented, it appears that the Brazilian project is already
"ahead" of the Mauritius project in this area of potential overlap.
Anticipating matching GEF funds, Copersucar has
already progressed in the area of mechanized harvesting [3] and millside residue separation from the stalk (as described in
their proposal) up to the limit of their specified cofinancing.
In particular, they have expended some $1.4 million of their own resources to
design, build, and test during the 1994 harvest season (May Nov.) a commercialscale (250 tonnes/hour)
"dry cleaning" station for separating residues from stalk (see Fig. 2
showing three photos of the cleaning station in operation). This unit was
designed to process burnt cane, which was also the feedstock used in the tests.
The experience has provided the data needed for making the modifications to use
the system on whole green cane. Copersucar is
anticipating the use of GEF funds to pay for the design, engineering, and
testing of the needed modifications.12. In November of 1994, Copersucar received a request from the Mauritius Sugar
Authority for a proposal to design "a pilot plant for dry cane
cleaning" for use in the Mauritius GEF project. Clearly, at least in the
area of drycleaning of cane, the Brazil project does
not stand to benefit from awaiting results from Mauritius. (In fact, Mauritius
may stand to learn from the Brazil project!) In any case, it would be desirable
for Mauritius and Brazil to independently pursue the development of cane
cleaning technology, as good ideas are likely to emerge from both efforts.13. Copersucar has also already designed, built, and tested for
one season (with burnt cane) a tworow mechanical
harvester (at a cost in excess of $0.6 million) as proposed to the GEF. (See
Fig. 3 showing three photos of the prototype harvester in operation.) GEF funds
would cover the redesign, manufacture and testing of the harvester on whole
green cane. (Mauritius has not proposed any new technology development relating
to harvesters.)14. If GEF funds are not forthcoming, Copersucar
plans to further develop both the harvester and dry cleaning station for use
with burnt (not whole green) cane, because of the attractive economic potential
they see in this. The work on whole green cane would not proceed. This would be
a major setback to the development of the use of sugarcane tops and leaves for
energy.15. Some other aspects of the Mauritius project could generate important
experience to complement the Brazil project, but will provide no direct lessons
for the Brazilians. For example, the bagasse
transport technology study (see page 19 of Project
Document), which is unrelated to any activity in the Brazil project, may have
relevance for many countries. Also, valuable experience would be gained in
institutional and other aspects of yearround
operation of a sugar mill power plant through use of bagasse
(during harvest season) and coal (during offseason) as proposed for Mauritius.BIOMASS AS PART OF AN OPERATIONAL STRATEGY FOR
CLIMATE CHANGE16. An indication of the likelihood that modernized biomass
energy will play an important role in the world's future is reflected in the
changing thinking on biomass among conventional energy industries. One of the
clearest illustrations of the trend is the most recent analysis published by
the Group Planning Division at the Shell International Petroleum Company.
(Analyses of the Group Planning Division provide input for longterm
decisionmaking within the Royal Dutch/Shell group of
companies worldwide.) In Shell's "New Frontiers" scenario, where
economic growth and energy demand growth are both assumed to be strong, Shell
shows rapid development of a renewable energy industry beginning late this
decade. By 2050, renewables account for nearly half
of total global energy supply, with biomass accounting for over onethird of the renewables (Fig.
1). The market implications of this analysis may be one of the primary reasons
that the Shell International Petroleum Company and its affiliate, Shell Brasil, are so actively engaged in the Brazilian BIG/GT
demonstration, including committing $5 million of investment capital toward
construction of the facility.17. There are several good arguments as to why
biomass, when used in advanced conversion technologies like the BIG/GT, is very
likely to play as important a role as envisioned in the Shell scenario,
especially in a future greenhouseconstrained world.
(a) Because sustainably produced biomass absorbs CO2 as it grows and releases
an equivalent amount when it is used for energy, biomass is a carbonneutral energy resource. If sustainable biomass
energy replaces fossil fuel use, overall carbon emissions would be reduced. (b)
A number of studies have concluded that commercialized versions of advanced biomassenergy technologies like BIG/GT could be economically
competitive with fossil fuels. This is especially true in applications where
the biomass cost is relatively low, as it would be for sugarcane residues.
There are many such potential applications worldwide. For example, over 80
developing countries grow sugarcane. (c) It has been widely argued that biomass
energy has the potential for making important contributions toward sustainable
development. Since biomass production is an inherently rural activity, rural
employment opportunities would be generated, energy inputs to agriculture might
be increased, and energyusing industries (and
associated economic activities) might be drawn to rural areas.18. Given the
prospective commercial viability of advanced biomass energy technologies,
together with the carbonneutrality of sustainable
biomass energy, and the opportunities modernized bioenergy
might provide for sustainable development, publicsector
support needed to help realize the implementation of such modernized bioenergy systems is highly warranted. Despite the strong privatesector interest in the application of commercialized
BIG/GT technology, publicsector sharing of the
development costs is needed to leverage private sector willingness to invest at
this precommercial stage in the technology
development process.COSTS OF DELAYING THE BRAZIL
PROJECT19. The Brazil bagasse project was designed as
an extension of the BIG/GT demonstration project and has the following three
main objectives: (i) to develop green cane harvesting
and processing technologies that would make sugarcane tops and leaves (trash)
available for gasification at a sugar mill at minimum cost, (ii) to test the
gasification of bagasse and trash in the furthest
developed of atmospheric and pressurized gasification systems, and (iii) to
develop engineering studies of the "best options" for integrating biomassgasifier/gas turbine cogeneration systems into sugar
mills. With a delay in the approval of the GEF grant, there would be
considerable risk that the cost associated with achieving each of these objectives
would increase significantly: (a) As described above, Copersucar has already invested considerable resources of
their own ($2 million or more) in launching the work proposed for GEF support.
In particular, they have designed, built and tested for one season (with burnt
cane, and some small preliminary trials with green cane) a tworow
mechanical harvester and a 250 tonne/hour cane drycleaning station. Enough data has now been collected to
enable redesign for green cane. Copersucar is
anticipating GEF support to pay for the redesign and testing on green cane. Copersucar has been planning to test the re designed units
during the 1995 cane crushing season (May November). With a delay in GEF
approval, it is conceivable that the redesign and re building work would not be
completed in time for any testing during 1995, in which case testing could not
begin until May 1996 a 12 month delay. (b) The cost consequences of such a
delay are potentially serious for the development of the drycleaning
technology. The 250 t/hour unit that Copersucar has
already built is capable of handling the entire capacity of the mill (Acucareira Quata) where it is
installed. It is installed in parallel with the existing system that it will
eventually replace. Both systems were operated during the 1994 crushing season,
and the mill owners have agreed to parallel operation again during the 1995
season. In 1996, the mill plans to adopt the drycleaning
station for commercial operation and retire its existing system. (Only a few tests are planned for 1996 as part of the GEF project.)
(c) A one year delay in the drycleaning tests would
mean that Acucareira Quata
will have commercially adopted the drycleaning unit,
which would make it difficult to run tests with sufficient flexibility to get
good results over the originally planned duration of testing. In all
likelihood, an additional year of testing would be needed to complete all of
the tests without excessively disturbing the Acucareira
Quata commercial operation. (The strain this might place
on the good will of the Acucareira Quata personnel would not make it any easier to complete
the work.) There would also be added costs of maintaining the drycleaning station during the 1995 season. (d) In the
extreme situation, another drycleaning station would
need to be built (at a cost of no less than $1.2 million), and the delay would
be still greater. (e) There are similar potential cost consequences for the
development of the harvester. Without the modifications for green cane
harvesting, which Copersucar would pay for with GEF
funds, precommercial testing of the unit would
continue on burnt cane during the 1995 season. This would be followed in 1996
by final development of a commercial unit for burnt cane harvesting (with
selected commercial manufacturers). At that point, it would be difficult to use
the harvester for green cutting trials (after it had been developed for
commercial use with burnt cane). (Making the needed modifications would be more
difficult.) In all likelihood, another prototype would need to be built for
green cane testing, at a cost of several hundred thousand dollars. (f) Finally,
in anticipation of GEF funding being approved, Copersucar
has already scheduled many of the proposed agronomic tests (trash use for
herbicide elimination, trash baling test, etc.). The testing will involve a large number experiments with different equipment at 10
different sugar mills. All tests have already been programmed. A delay will
force a re organization and, in some cases, carrying
out of additional tests to those originally planned. The overall result would
likely be an increase in costs, and a loss of interest from the 10 cooperating
mills, making it more difficult to conduct the tests. (g) When the Brazil bagasse project was originally proposed in 1993, it
included a schedule for gasification tests that was synchronized with related
activities in the GEF's Brazilian biomass gasifier/gas
turbine (BIG/GT) demonstration project. In particular, the original bagasse proposal called for gasification testing in 1994.
Until now, some delays in the BIG/GT project have allowed ready accommodation
of the delay in GEF approval of the bagasse project.
If the bagasse project were to go ahead at this
point, it would still be in sync with the BIG/GT project. (h) A further delay
in approval, however, would create some disruptions in the schedules for
gasification testing that could result in higher costs for the gasification
tests. As you know, there are presently two gasifier
developers (TPS and Bioflow) competing for the right
to proceed to phase III in the BIG/GT project. TPS (atmospheric pressure gasifier) completed all of their gasification tests for the
BIG/GT project late in 1994. A delay in approval of the bagasse
project would mean a large time gap in further testing, which would involve a
loss of momentum and a monetary cost in TPS participation. TPS proposed to
carry out work for the bagasse project on the
assumption that it would follow on directly after (or partly overlap with) the
work TPS has been doing for the BIG/GT project. Since TPS is a small company, a
time gap between the two projects will probably mean that the team assembled to
do the BIG/GT work would need to be dispersed and the pilot gasifier
facility would need to be temporarily mothballed. Once the team is reassembled,
some engineering design work would probably need to repeated, and the test
facility would need to be recommissioned. Obviously,
more time would be needed (than originally proposed) to accomplish the work, and it would probably be more costly (perhaps a few
hundred thousand dollars more costly) [4]. This would be especially the case if
TPS is not selected as the Phase III gasifier
supplier, because then TPS would be decoupled from the BIG/GT project
altogether. (i) There would probably be less of a
momentum loss with Bioflow (pressurized gasifier/gas turbine) because work is ongoing in any case
at the Varnamo pilot demonstration BIG/GT facility in
Sweden. Nevertheless, the Bioflow people have been
indicating all along to Copersucar that there was
some uncertainty as to whether a window of opportunity could be identified for
testing bagasse at Varnamo.
This uncertainty appears to be growing as time passes. Because Bioflow has prior commercial commitments to sell
electricity from the Varnamo plant, and because the
testing and demonstration phase at Varnamo has taken
longer than anticipated [5], Bioflow has been delayed
in meeting its commercial obligations. Bioflow will
not want to delay fulfilling their commitments any more than absolutely
necessary. (j) The costs indicated in the Copersucar
proposal for the system integration studies are based on quotes from the
Scandinavian gasifier suppliers that reflect the fact
that they were planning on using the experience gained in the BIG/GT testing
and evaluation phase. If the BIG/GT and bagasse
projects are decoupled in time, there would inevitably need to be some
repetition of work, which would lead to higher costs and a longer time to
complete the work. (k) The analysis in this section of my memo is based on
communications I have had with Isaias de Carvalho Macedo, Manager for
Technology at the Copersucar Technology Center and
the person most familiar with the proposed bagasse
project. His overall estimate is that at least a 30% increase in overall cost
of the project is likely with a further delay in GEF approval. (l) However,
there would be a much larger, though difficult to quantify, economic loss as a
result of the delay in commercial application of the technologies that would be
developed in the project. The export of cogenerated electricity from sugar
mills as a business venture appears finally to be gaining momentum in Brazil
and a growing number of other countries; the promise of a new technology
(BIG/GT) that is more efficient and economical than existing commercial options
may be important in re directing capital investments. Once an investment is
made in a cogeneration system, the capital is locked up for 20 years or more.
This could considerably delay the introduction of BIG/GT cogeneration systems
at sugarcane processing facilities.NOTES:1. It is clear to me that the BIG/GT
technology fueled by woody biomass will be commercially demonstrated within a
couple of yearsthere are some 10 or 12 projects
ongoing worldwide with this objective. While I see no fundamental obstacles to
running BIG/GT systems on sugarcane residues, the type of work proposed in the
Brazil bagasse project is needed to help identify
modifications needed in the areas of fuel supply, residue gasification, and overall
integration with the rest of the sugarcane processing facility.2. For example,
Sao Paulo (Brazil's largest cane producing state) has now in place legislation
requiring utilities to purchase cogenerated power from sugar mills at a fair
price. This legislation is akin to the Public Utilities Regulatory Policy ActPURPAthat was enacted in 1978 in the U.S. and led to a
rapid increase in the early 1980s in the sale of privately cogenerated
electricity to utilities.3. Copersucar does not
consider manual harvesting of whole cane as a realistic largescale
option for the future in Brazil, and so is not considering this possibility in
its work. The need to improve the living and working conditions of field
laborers rules out the possibility of employing the enormous amounts of lowpaid labor that would be needed for economical manual
harvesting of green cane and recovery of trash. Even today, with burnt cane,
mechanical harvesting is growing steadily in Brazil because of lower costs; it
leads to fewer jobs, but much higher paying jobs.4. This is a guesstimate.5. Bioflow originally set a very aggressive design,
construction, testing and demonstration schedule. In essence, they set out to
build and run a new, unproven technology on the same schedule as a commerciallymature technology. In retrospect, this was
overly ambitious. However, it now appears that most of the problems encountered
in the process have been identified and solved, so that the demonstration will,
ultimately, be successful.
WORK PROGRAM
PROPOSED FOR COUNCIL APPROVAL