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.
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