Cogeneration has been successfully practiced in sugar and palm oil mills for more than 50 years. In addition to that, wood industries, rice industries, pulp & paper and other industries also have considerable cogeneration potential.
As agriculture is the major activity in Asia, there are many sugar and palm oil industries in Asia. All these industries are having cogeneration plants. The old cogeneration plants are designed purposefully with low efficiency in order to get rid of all the biomass wastes produced in the mill.
In the past ten years, these industries started replacing their old cogeneration systems with modern cogeneration plants which use high pressure, multi-fuel boilers and efficient extraction condensing turbines.
These modern cogeneration plants produce almost two times of electricity produced by old plants and the excess electricity is being exported to the grid, thus providing additional revenue.
In addition, these projects are eligible under CDM and the CER revenues provide additional income and encourage project owners/developers to invest.
Sugar and palm oil mill owners visit modern cogeneration plants and they are getting convinced to implement projects by themselves in their own mills. For this purpose, they form a Special Purpose Company and separate their core business of sugar/palm oil production from electricity generation.
Normally 30% of the investment cost is borne by the owners of these cogeneration plants and around 70% is from banks as loan. Normally the project owners who do not have sufficient financial strength for investing would allow external investors to take part in the equity. Sometimes the plant can be even 100% owned by external investors. The mills supply fuel to the cogeneration plant and the plant will supply steam and electricity to the mill.
In Asia, sugar mills have the highest potential to implement cogeneration plants to the sizes ranging from 10-100 MW electricity generation in each mill. The potential in palm oil mills ranges from 2 to 20 MW. Paper industries also have reasonable potential to implement projects of sizes upto 50 MW. Wood and rice industries may go for captive power plants or cogeneration plants and both are common these days.
We have experience in the development of cogeneration plants of sizes ranging from 2 to 41 MW. Whoever interested in Renewable Cogen Asia’s assistance in developing cogeneration plants, can contact us.