Frequently Asked Questions
Q: How long does it take to develop a biomass project?
A: It depends on the ownership of fuel, fuel security, number of investors, sourcing of fund, etc. If there are no issues in fuel, investors and fund, then it is possible to develop a project in a fast track mode and COD can be reached within 2 to 3 years. We came across some projects which took almost 5 to 6 years for COD. Some projects failed without further developments after 2 or 3 years of work.
Q: Is EPC contract a better approach for implementing biomass projects?
A: EPC approach is suitable, when the project owner/developer/investor is not having core expertise in biomass project development. But, in general EPC contract is 10 to 20 % more expensive than separate procurement and management. The exact approach to be selected depends on several aspects of the project and it is difficult to generalize.
Q: For biomass and biogas projects, is financing a major barrier in Southeast Asia?
A: In most of the Southeast Asian countries, for good low risk projects, financing is not a big issue. There are several equity investors looking for good projects to invest. There are several banks willing to give loans at reasonable interest rate. Although debt financing is the most common approach, there are several projects that received project financing and it is getting popular. However, in regions like Africa, financing is still a major barrier, although there are several attractive projects that replace diesel.
Q: How much budget is required to develop a 10 MW green field rice husk power plant?
A: For a grid connected project, in general, the total project cost will be around 15 – 20 million USD depending on project development approach, origin of equipment, required performance guarantee, and several other factors. Though it is possible to reduce the investment cost further by going for cheap equipment, it is not recommended, especially, if you don’t have the core expertise in this field.
For developing rice husk project, fuel security is an important aspect. Some Greenfield projects are facing problems due to rice husk shortage and increase in price. Those who considered USD 2-5 as rice husk price in financial model for feasibility study (5 years back) are facing trouble as the cost of rice husk has increased up to USD 40 per ton at several places. So first, consider 100% fuel security.
Q: Is it true that most of the biomass and biogas projects are not feasible?
A: Those days are gone. With high oil price, increased competition among equipments suppliers, and with CDM revenue, these days’ biomass projects are an attractive investment option. However, there are still many barriers and risks in project development. The project development is more of an art than science.
Q: What is the operational life time of a biomass power plant?
A: If properly maintained, biomass power plants can run for around 20 years. It is possible to extend the lifetime by another 10 years by major rehabilitation.
Q: Is there any bagasse power plant operating using very high pressure of around 100 bar in South East Asia?
A: We worked in two 41 MW cogeneration plants in Thailand using 65 bar. These two were the first high pressure boilers installed in the entire South East Asia. Some sugar mills that we visited in Philippines planned to go for high pressure cogeneration plants beyond 65 bar and those projects are in the early stages of development.
Q: Is the technology for power generation based on empty fruit bunch (EFB), proven?
A: As of now, 80% is proven and it is expected to be very close to 100%.
Q: Do you recommend using second hand biomass power plants to reduce the cost?
A: If you manage to get reliable equipment at very low cost, then it is also one of the options. For e.g., we have visited some sugar mills in Philippines using second hand boilers and turbines (of reasonably good efficiency) from USA. But a very extensive study is needed before making the final decision, as the risks are high.
Q: Can we use rice straw for power generation in Asia?
A: One power plant was installed in India long ago. Although, the technology is available for power generation based on rice straw, there are several other issues as straw has plenty of other applications in Asia such as animal feed. Some studies are going on, in that direction.
In Europe, wheat straw is successfully used for power generation and heat boilers. In Denmark, the technology is matured as they have good experience using straw. There is also a big power plant close to Copenhagen airport co-firing straw for power generation for several years.
Q: Is there any biomass power plant operation in Africa?
A: Yes, there are some biomass based power plants in operation in Africa. But most of the plants are of low efficiency. However, the future potential is huge in Africa as in most of the places, diesel is used for power generation. These projects are expected to give very high return on investment. We came across some projects, which have nominal pre-tax project IRR of more than 50%.
Q: Is there any potential for biomass power generation in Cambodia and Laos?
A: We got involved in one rice husk project in Cambodia in the early stages of development. In Phnom Penh and Batdambang regions, there is some potential for rice husk based power generation. There was also a wood waste based power plant implemented in Cambodia. We have trained several rice mills in Batdambang region in biomass project development and a few rice mills went for gasification based power generation.
At Laos, we have traveled the entire country for assessing the potential for biomass based power generation. There is potential for few biomass plants in Laos.
Q: We have a wood industry currently running in diesel generator of capacity around 500 kW. Is it possible to generate power from biomass using boiler and turbine?
A: For such low capacity, steam turbine technology is not advisable as it is extremely expensive. Our recommendation is to go for biomass gasification power plant. As of today, there are several equipment suppliers who can provide the technology at low cost. However, you should be very careful in selecting the suppliers with proven track record.
Q: Is cassava rhizome a good fuel for power generation?
A: We did a feasibility study based on 100% cassava rhizome in Thailand, but the project was not viable, with many risks. However, it is mixed with other biomass fuels and used for power generation in some plants.
Q: Is it compulsory to conduct an EIA for biomass power project?
A: The requirements vary from country to country. For example, if the power plant capacity is less than 10 MW, then EIA is not required in Thailand, as per the environmental regulation. Only IEE is sufficient. It is also better to check with DNA requirements, if the project is going for CDM.
Q: Is EC-ASEAN COGEN Program grant still available? Is it applicable for MSW projects?
A: The EC-ASEAN COGEN program came to an end in Dec 2004. In phase I, II & III (COGEN 3) around 25 biomass projects were supported by EC-ASEAN COGEN program.