Partners for Africa Project Workshop on “Policy Dialogue ... · PDF filePartners for...
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Partners for Africa Project Workshop on “Policy Dialogue on Co-generation and Bio-ethanol for
Southern Africa”
Durban, South Africa
June 2004
Driving Forces and Benefits from Sugarcane Co-products , Investments and Policy Issues in
SADC Countries
Prof. F. D. YambaCentre for Energy, Environment and Engineering ZambiaPrivate Bag E721Lusaka, ZAMBIATel/Fax: +260 - 1 - 240267Email: [email protected] / [email protected]
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BACKGROUND (1)
Resource availability for sugarcane co-products (ethanol and electricity) has been adequately addressed in the previous presentation.
The aim of this presentation is to discuss driving forces and benefits from sugarcane co-products investments and policy issues
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BACKGROUND (2)
Driving forces include:• Sustainability and competitiveness of
sugar industry• Environmental concerns from both local
and global perspectivesBenefits include:• Financial• Environmental
Policy issues
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DRIVING FORCES (1)
Sustainability and competitiveness of the sugar industry• The sugar industry is a major worldwide industry that
faces many problems, since sugar prices are extremely volatile
• The sugar industry also faces difficulties such as competition due to saturated markets in industrialised countries, and competition from other sweeteners
• For the sugar industry to be sustainable and competitive, there is increased need for it to diversify its product portfolio by investing in co-products such as ethanol and surplus electricity
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DRIVING FORCES (2)
Environmental concerns• At a global level, the need to contribute to efforts to
reduce GHG emissions aimed at achieving stabilsation of GHG concentrations in the atmosphere cannot be over-emphasised
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DRIVING FORCES (3)
Regional Concerns (1)At a regional level, the following issues provide an excellent opportunity to implement an ethanol programme in Southern Africa.
•Petroleum products are a drain on foreign exchange •Local pollution (CO, NOx, UHC, Soot)•Lead, which has historically been added to gasoline in
order to increase its octane number, has been identified as a dangerous pollutant since low levels of exposure to lead causes a range of learning and neurological defects; children are most vulnerable
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DRIVING FORCES (4)
Regional Issues (Continued)•In most parts of the world, use of lead additives in
gasoline has been eliminated, except for most parts of Africa
•Instead of lead, other additives can be blended with gasoline. MTBE (methyl tertiary butyl ether) is most commonly used, but is increasingly being viewed as a poor choice, because it leads to significant ground water contamination.
•Another additive option is MMT, a manganese compound, but it also faces different concerns over potential health risks, and is thus viewed controversial
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DRIVING FORCES (5)
Regional Issues (Continued)•Another approach is for refineries to manufacture high
octane gasoline through use of catalytic reforming units. For many refineries in Africa, this will require upgrades and large capital outlays
•Fortunately, octane can be boosted from natural bearing fuels such as ethanol from crops – such as sugarcane, sweet sorghum, etc
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Key Elements Required to Ensure Ethanol and Surplus Electricity Generation from Co-gen Systems Programmes Succeed
TechnologyAvailability of feedstock at low costLand availability, if large scale production is envisagedEconomics/financial viabilityEnvironmental benefitsA regulatory fiscal and policy framework
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TECHNOLOGY (1)ETHANOL PRODUCTION (1)
Figure: Alcohol Distillery Flow Diagram
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TECHNOLOGY (2)ETHANOL- Extractive Hydrolysis Concept &
Distillery Scheme
FEED STOCK TREATMENT
EXTRACTIVEHYDROLYSIS
JUICETREATMENT
ANDEVAPORATION
SYRUP STORAGE
AND HANDLING
FERMENTATIONMPRDISTILLATION
SPENT WASH
RECYCLESYSTEM
MOLECULARSIEVE
DEHYDRATION
FUELETHANOL
BOILERTURBINE
COOLINGTOWER
PROCESSWATER ETHANOL
STORAGE
Figure: Configuration of the Distillery Complex
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STATE-OF-THE-ART BIOMASS BASED TECHNOLOGIES (1)
Improved combustion in traditional boilers (steam use optimisation and combustion control)
CEST (Condensing Extraction Steam Turbine) (High Pressure boilers)
BIG/CC (Biomass Integrated Gasifier Combined Cycle) (Combination of gas turbine and steam turbines)
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EXAMPLE OF CEST (1)
Schematic Diagram of Possible Cane Sugar Application of a High Pressure Condensing –Extraction Steam Turbine (CEST) Cogeneration System.
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EXAMPLE OF CEST (2)
Cogeneration System with Extracting – Condensing Steam Turbine.
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EXAMPLE OF BIG/CC
Combined Cycle with Integrated Atmospheric Gasifier
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FEEDSTOCKS FOR ETHANOL PRODUCTION (1)
Ethanol can be obtained from many different feedstocks, in fact from any sugar containing raw material, which can be classified into three main groups:
• Sugars: (i.e. sugarcane, molasses, fruits, etc) that can be converted to ethanol through fermentation and distillation
• Starches: (i.e. grains like maize, root crops like cassava), which must be first be hydrolysed to fermentable sugars
• Cellulose (i.e. woody material, agricultural waste, black liquor from pulp and paper which must be converted to sugars by action of mineral acids
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FEEDSTOCKS FOR ETHANOL PRODUCTION (2)
From an economic point of view, very few materials can seriously be considered as feedsockFrom SADC’s perspective, sugarcane and sweet sorghum offer us promising feedstocks (examples: Brazil, Malawi, India, Kenya and Zimbabwe)Quantities of ethanol and feedstock required depend on the demand, which in turn is influenced by the level of blending (5%, 10%, 15%)Feedstocks requirements based on available specification for unleaded gasoline based on a maxim of 10% v/v ethanol.
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FEEDSTOCKS REQUIREMENTS THROUGH THE BLENDING ROUTE AT 10% BLENDING (SELECTED COUNTRIES)
2525523.5861.7273.01138280011,380TOTAL
96094.2 5.338.043.33500.8433Zimbabwe
41500.3 -19.018.71300.7187Zambia
2298714.6 (819.8)216.01035.821000.210,358South Africa
73457.7 (33.1)-33.11800.4331Namibia
15756.8 (3.5)3.67.1400.571Mozambique
GHG Saving (tonnes)
Ethanol Deficit (million litres)
Ethanol Availability
(million litres)
Ethanol Equiv. (million litres/yr)
Total lead used (t/yr)
Lead concentration
(g/litre)
Gasoline Consummed
(million litres/yr)
Country
The deficit may be met by two possible routes:•Expansion of sugarcane estate•Use of sweet sorghum as feedstock (400,000 – 500,000ha)
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FEEDSTOCK LIMITATIONS AND ALTERNATIVES (1)
Present feedstock – Cane molasses•Limited availability – byproduct of sugar factories•Limitations on waste water control
New possible agro-based feedstocks•Sugar bearing•Remunerative for the farmers-Low cultivation costs•Viable for alcohol production•Giving zero discharge of waste water
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FEEDSTOCK LIMITATIONS AND ALTERNATIVES (2)ETHANOL – Sweet sorghum as feedstock
Sugar bearing FeedstockShort cycle crop –3.5 monthsCan be grown across warm climate regionsEasier to grow and handle (Viz-a-Viz sugarcane)Low cultivation costsKnown to farmers – Robust crop- Practices similar to sugarcaneGives fodder for cattleGives bagasse similar to sugarcane – Energy for distilleries
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LIMITATIONS AND ALTERNATIVES (3)ETHANOL – Sweet sorghum Vs Sugarcane Properties Sugar Cane Sweet Sorghum
Crop cycle 10-11 months 3.5-4 months (Grown twice/ year)
Yield per Acre 28-32 ton 17-22 tons X twice / year = 34 to 44 Tons
Sugar content 11-13% 9-11%
Conventional ethanol yield
68-74 lit/ton 45-55 lit/ton of stalks
Water requirement 100% 65 – 70% of cane
Fertilizer requirement
100% 35 – 40% of cane
Bagasse Availability
30% of cane 28 – 30 % of sweet sorghum
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FEEDSTOCK REQUIREMENTS AND POTENTIAL SURPLUS ELECTRICITY GENERATED FROM SOUTHERN AFRICA’S FACTORIES BASED ON CURRENT & PROJECTED BASGASSE AVAILABILITY
72603630306Nil33.02050
49002450207Nil22.02030
40202010170Nil18.02020
32401620135Nil15.02010
27001350113Nil12.02000
BIG/CC (MW)
CEST (MW)
Traditional Boiler with Improved
Combustion (MW)
Traditional Boiler
BagasseResource
(million tonnes)Year
Assumption: Penetration level of 80%
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CEST: PROVEN OF THE THREE (1)
Role of Bio-Energy (2030)
Hydro (29%)
Coal (55.5%)
Diesel/ G. turbine (1.2%)
Natural Gas/CBM (6.2%)
Wind (0.6%)
Biomass (2.5%)
Other/nuclear (5.0%)
Figure: SADC Projected Energy Supply Scenario 2030 (Total Energy 80.2 GW)
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CEST: PROVEN OF THE THREE (2)
Role of Bio-Energy (2050)
Hydro (31.4%)
Coal (50.4%)
Diesel/ G. turbine (1.3%)
Natural Gas/CBM (8.7%)
Wind (0.9%)
Biomass (3.0%)
Other/nuclear (4.3%)
Figure : SADC Projected Energy Supply Scenario 2050 (Total Energy 115.2 GW)
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ENVIRONMENTAL BENEFITS FROM USE OF CEST
Environmental Benefits (GHG Saving)
20.014.08.0GHG Saved (million tonnes)
205020302010Year
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ECONOMICS/FINANCIAL VIABILITY (1)ETHANOL – Production Parameters
56.04100108000200.042,193,737492.86500
5.29
4.88
4.45
3.99
2.93
2.30
Investment,
(US$m)
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14
12
10
6
4
Molasses production
(tonnes / hr)
0.04
0.04
0.04
0.04
0.04
0.04
Molasses-cane output ratio
580864002,217,396408.96400
570756001,655,682356.1350
560648001,211,236305.47300
550540001,007,183250.84250
53032400688,226160.04150
52021600462,29495.69100
Installed capacity, kL/day
O+M % of investment or output related
Investment Cost Molasses to Ethanol
(Anhydrous) Alcohol
production, (litres per
day)
Actual Annual output (tonne/ cane hr)
Actual output (tonne/cane hr)
Typical Factory
Size
Notes and Assumptions:1. Alcohol (RS) to cane ratio (litres/ tonne)=9=constant2. Molasses on cane, % = 4% (4 tonnes of molasses per 100 tonnes of cane crushed)3. Alcohol (Rectified Spirit, 94.68%) to molasses conversion ratio = 225 litres of rectified spirit per tonne of molasses4. Anhydrous alcohol (99.8%) from Rectified spirit (94.68), conversion ratio, % = 94.4% (94.4 litres of
anhydrous alcohol per 100 litres of rectified spirit)5. Rupees to US Dollar conversion = Rs 46 per USD
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ECONOMICS/FINANCIAL VIABILITY (2)ETHANOL – Production Vs Molasses
E th an o l V s M o lasses P ro d u ctio n (fo r d ifferen t p lan t sizes)
0
20000
40000
60000
80000
100000
120000
4 6 10 12 14 16 20M olasses P rod. (tonne/hr)/P lant S ize
Ethanol Pro
d. (litres/day)
S e rie s1
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ECONOMICS/FINANCIAL VIABILITY (3)
ETHANOL – Scenario 1 (BAU)
IR R V s Ethanol P rice (B A U )
0.00
20.00
40.00
60.00
80.00
0.1 0.2 0.3 0.4
Eth an o l P rice (U S $/L itre )
IRR (%)
10 0 t
150 t
2 50 t
3 0 0 t
3 50 t
4 0 0 t
50 0 t
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ECONOMICS/FINANCIAL VIABILITY (4)
ETHANOL – Scenario (CDM Spread)
IR R V s Eth an o l P rice (C D M - S p re ad )
0.00
20.00
40.00
60.00
80.00
100.00
0.1 0.2 0.3 0.4
Eth an o l P rice (U S $/L itre )
IRR (%
)
10 0 t
150 t
2 50 t
3 0 0 t
3 50 t
4 0 0 t
50 0 t
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ECONOMICS/FINANCIAL VIABILITY (5)
ETHANOL – Scenario (33% CDM dp)
IR R V s Eth an o l P rice (C D M - 33% d p )
0.00
20.00
40.00
60.00
80.00
0.1 0.2 0.3Eth an o l P rice (U S $/L itre )
IRR
(%)
10 0 t
150 t
2 50 t
3 0 0 t
3 50 t
4 0 0 t
50 0 t
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FINANCIAL BENEFITS FROM USE OF CEST (SURPLUS ELECTRICITY) (1)CO-GENERATION PARAMETERS
21250
17600
15300
13170
9260
5900
3530
Surplus (kW)
5/yr4752670080480240.280110.9730.02,193,737500
5/yr4852215080480199.38092.0830.02,217,396400
5/yr5001930080480173.68080.1830.01,655,682350
5/yr5251655080480148.98068.7830.01,211,236300
5/yr5701202060450122.36055.6530.01,007,183250
5/yr64076706045078.06035.5130.0688,226150
5/yr73045906045046.76021.2330.0462,294100
Power (kW)
OP. Pre (Bars)
Power (kW)
Steam (t/hr)
Op. Pres (bars)
Bagasse(t/hr)
O+M (% of Invest.)
Investment (US$/kWh)
Multi-stage TurbineBoiler
Investment Costs, and O+MCogeneration SpecificationsBagasse
content in cane (%)
Actual Annual output (tonne/ cane hr)
Typical Factory
Size (Tonne/ cane hr)
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FINANCIAL BENEFITS FROM USE OF CEST (SURPLUS ELECTRICITY) (2)Power Capacity Vs Bagasse
B A G A S S E C O N S U M P T IO N V s P O W ER C A P A C IT Y FO R S EL EC T ED
S U G A R FA C T O R Y S IZ ES
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
21.23 35.51 55.65 68.78 80.18 92.08 110.97
B ag as s e co n s u m p tio n (to n n e /h ) / Facto ry S ize
Power Capacity (kW
Pow er C apacityPow er C apacity (S urplus)
100 150 250 300 350 400 500
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FINANCIAL BENEFITS FROM USE OF CEST (SURPLUS ELECTRICITY) (3)FINANCIAL SCENARIO 1 (IRR VS TARIFFS)
IR R V s Tariff (B A U )
-1 0
0
1 0
2 0
3 0
4 0
5 0
0 .0 2 0 .0 4 0 .0 6 0 .0 8
Tariff (U S $/kW h)
IRR (%
)
10 0 t
150 t
2 50 t
3 0 0 t
3 50 t
4 0 0 t
50 0 t
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FINANCIAL BENEFITS FROM USE OF CEST (SURPLUS ELECTRICITY) (4)FINANCIAL SCENARIO 2 (IRR VS TARIFFS)
IR R V s Tariffs (C D M -S ale of C ER s S pread)
-10
0
10
20
30
40
50
0.02 0.04 0.06 0.08
Tariff (US$/kWh)
IRR
(%)
100 t150 t2 50 t3 0 0 t3 50 t4 0 0 t50 0 t
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FINANCIAL BENEFITS FROM USE OF CEST (SURPLUS ELECTRICITY) (5)FINANCIAL SCENARIO 3 (IRR VS TARIFFS)
IR R V s Tariff (C D M -33% D ow n P aym ent)
0.00
10.00
20.00
30.00
40.00
50.00
60.00
0.02 0.04 0.06 0.08
T ariff (U S $/k W h )
IRR (%)
10 0 t
150 t
2 50 t
3 0 0 t
3 50 t
4 0 0 t
50 0 t
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POLICY ISSUES ON ETHANOL
Use of ethanol as an octane enhancerStandards in use of ethanol as an octane enhancerAgricultural policy on outgrower schemesPrivate sector participation in ethanol blending Fiscal incentives
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POLICY ISSUES ON CO-GEN
Level of electricity tariff – currently most of the SAPP countries have low tariff (US-cents 2 – 4), which in most cases does not take account of environmental externalities Policy of IPPs Regional baseline is essential of CDM is to play a role towards investments.