Development of Small Scale Biomass Based Distributed Power Generation in Rural Areas

By Dr G C Datta Roy

Presented at Seminar on Policy Incentives for IPPs and Investors for Wind and Biomass Power Generation

Organized by IPPAI
N Delhi 17th Dec, 2009

About Ourselves
10 Year old BEE rated grade 1 ESCO working globally in the area of energy efficiency & renewable energy Consulted & engineered over 200 biomass energy projects globally with aggregate capacity over 500 MW Proud to announce that from 14th Dec, 2009, we have become part of global energy services major, Dalkia Group
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Roadmap of Presentation
Sustaining biomass IPP business-critical success factors Competitive use of biomass & fuel security

Tariff & impact

Plant technology & heat rate Operating PLF

Brief review-economics of biomass IPP

Last mile DG system-options & issues Technology options Challenges-small scale biomass IPP Some policy recommendations

Conclusions

Sustaining Biomass IPPs-CSF

Biomass sources & security
Agro-industrial by-product Agro-waste Forest waste Competitive use Price at source Logistics

Technology mainly from agro & forest waste in future Capital Cost competitive use of biomass would be critical Factor driving sustainability Tariff Operating PLF Despatch PLF
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Surplus availability for IPP would be

Competitive use of biomass Rajasthan

Competitive use of biomass Maharashtra

Competitive use of biomass Chhattisgarh

Competitive use of biomass- Punjab

Summary- Competitive use of biomass

States Different Uses of Biomass Fodder Domestic Fuel Biomass Based Power Plant Brick Kilns Mulching Thatching Cement Rajasthan % 59.88 11.43 3.2 3.04 5 2.35 0 Maharashtra % 44.15 8.64 8.42 1.79 0.41 0.28 1.25 Chhattisgarh % 64.27 0 18.41 1.24 4.2 3.5 1.06 Punjab % 56.51 3.68 5.64 0 1.79 0.89 0

Oil Mills
Export to other Power Plants outside catchment area Export outside catchment area Import from outside area Left in Field Other local industries using biomass

6.86
1.37 2.29 0 4.57 4.64

20.02
0 10.4 0 0 0

0
0.53 0 5.08 0 1.72

0
0 17.03 0 12.5 1.96

The drawl by power plant in Chhattisgarh is around 18% and is facing problems of biomass shortage.

Competitive Pressure
Captive use

Fiber

Industrial fuel

Fuel for IPP

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Summary- Economic Analysis of Competitive use of biomass

Next to captive, highest value as fiber

Both brick kilns and cement mills can offer higher price by as much as 25% considering coal price parity However, drawl by these industries is not significant and as such do not appear to be competitive threat to biomass based power plants Oil mills can offer much higher price-in fact here they have opportunity of higher value realization by installing mini cogeneration power plants and export small quantity of power to the grid-this would provide the highest value realization from biomass Finally price parity would be governed by coal price parity However, at tail end competitive pressure would be lot less

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Summarizing
Highest value realization from captive consumption for fodder-this is likely to remain at the present level in the foreseeable future There can be some reduction in captive consumption as fuel with increased access to commercial fuel Under all conditions, available fuel for power generation is likely to range from 10 to 12%
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Tariff & Impact

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Plant Technology & Heat Rate

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Gaps in CERC Regulations on Biomass Based Power Generation

No

standardized station heat rate for biomass based power plant Station heat rate not defined at different power generation capacities as defined in case of coal. Station heat rate for biomass based power plant is a function of type of biomass and type of technology.
State Regulatory Commissions order no and date CERC Order Dated 16.9.2009 Andhra Pradesh ERC Order Dated 31.03.2009 Tamilnadu ERC Order 2009 Dated 27.04.2009 Maharashtra ERC Order 2009 Dated 25.03.2009 Uttar Pradesh ERC Order Dated 18th July 2005 Station Heat rate (kCal/Unit) 3800 3700 3840 3650 4350 4047 given in 11.11.2005 reduced to 3800 4290 3650

Chhattisgarh ERC Order Dated 15.1.2008

Gujarat ERC Order 2009 Dated 17.08.2007 Bihar ERC Order 2009 Dated 21.05.2009

Corresponding thermal efficiency-20 to 25% Only possible with bagasse & husk fuels & not agro-residue

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Capital Cost
CERC order dated 17th Sept 2009 Rajasthan Order 2009- Dated 17.08.2009 Rs.4.50 Cr/MW Rs.5.40 Cr. Per MW-WCC Rs.5.85 Cr. Per MW- ACC Rs. 4.25 Crs. per MW Rs. 4.00 Crs. per MW Rs. 4.29 Crs. per MW Rs. 4.87 Crs. per MW Rs. 4.00 Crs. per MW Rs. 4.00 Crs. per MW Rs. 4.13 Crs. per MW Rs. 4.00 Crs. per MW Rs. 3.50 Crs. per MW Rs. 4.25 Crs. Per MW

MPERC Order Dated 07.08.2007 Andhra Pradesh ERC Order 2009 Dated 31.03.2009 Haryana ERC Order Dated 15.05.2007 Tamilnadu ERC Order 2009 Dated 27.04.2009 Maharashtra ERC Order 2009 Dated 25.03.2009 Karnataka ERC Order Dated 18.01.2005 Uttar Pradesh ERC Order Dated 9th Sept 2009 Chhattisgarh ERC Order Dated 15.1.2008 Gujarat ERC Order 2009 Dated 17.08.2007 Bihar ERC Order 2009 Dated 21.05.2009

For difficult to handle biomasses like straw and stalks, cost would be 15 to 20% higher

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Financial and Economic Viability of a typical biomass power project

The power plants are operating in a very constrained environment. Any unpredictable variations will make the project unviable. Increase in capital cost of project can be reduced by faster financial closure of project and getting statutory approvals in time

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Appropriate sizing of power plant for sustainability

Analysis of operation of the eight power plants makes the following interesting revelations: All the plants, which are using fuel upto 10% of the overall available biomass are operating at over 80% PLF Plants in Chhattisgarh using over 15% available biomass are facing problems From delivered cost perspective too, if the collection distance is maintained at less than 15 KM, overall financial performance would be good.

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Different Plant configurationCapacity Wise

S.No
Transportation Cost

Units

Value

Fuel Cost

% Contribution

Total Biomass Requirement (MT) at 80% PLF 13500-18000 (Rich States) 9000-11700 (Lean States) 72000108000 (Rich States) 45000-63000 (Lean States) 144000216000 (Rich States) 90000126000 (Lean States)

Power potential in rich states (MW) 1.5-2

Power potential in lean states (MW) 1-1.3

Upto 15 KM

Rs./MT

96

1200

8%

8-12

5-7

Upto 35 KM

Rs./MT

156

1200

13%

16-24

10-14

Upto 50 KM & above

Rs./MT

216

1200

18%

Keeping in consideration the long term fuel scenario and maintaining the transportation cost less than 10%, the optimal power plant capacity is in the range 1-2 MW Case for mini IPPs as DG system

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Last Mile DG Model-Issues

Technology Project capital cost Specific fuel consumption Operational PLF Energy tariff Open access charges

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Technology Evaluation
Combustion Technology Advantages:
Least expensive
(Rs. 4.5 5.0 Crs./MW) for larger plant

Gasification Technology Advantages:

Disadvantages:

Most straightforward & most commonly applied Higher PLF

Less fuel flexibility More requirement of pollution control measures Technology for small scale plant to be developed-higher development cost

Micro model (30 KW to MW) possible Operation relatively simple Higher capital cost Lower efficiency Under development technology Difficult to achieve PLF above 50% Grid connectivity

Disadvantages:

Better grid connectivity & possibility of using learning from existing larger plants for scaling down offer new opportunity for development of 1-2 MW small IPP as last mile DG plants
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Capital cost
Technology Combustion-normal IPP Configuration > 5 MW Cost (Rs Crs/MW) 4-4.5

Combustion-DG IPP
Gasification

1-2 MW
30 KW to 1 MW

6-6.5
3.5-4.5

Highest cost for small DG IPP

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Pressure & Temperature Configuration

For 1-2 MW biomass based power plant, the possible steamtemperature configurations are : 45 ata, 440 C 67 ata, 440 C

Capital cost tends to increase sharply over 45 ata

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Smaller Plant-Inherently Lower Efficiency

HMBD (WITH CLOSED COOLING WATER CIRCUIT)

Cost of Generation Fuel Consumption 0.35 Steam raising ratio 2.9 Fuel Consumption per hour 2.38 Fuel Consumption per day 57.08 Fuel cost of steam generatiom 626.93 Specific fuel Consumption 1.89

kg/kg of steam kg/kg of fuel TPH TPD Rs./Ton kg/kwh

Vent Loses @

0.5 % of I/L steam 1.2 0.003 105 641

3.1 kg/hr

Steam to Ejector & Gland Sealing 45.0 0.3 440 789 DP DT

5.0 0.231

35 35 Deaerator

D/A op. press.

1.1 bar(a)

Hin Hout

726 726

45.0 6.8

440 789

1.3 6.90

105 105 Boiler

48.0 6.90

105 106 47.0 0.068 259 668

FWP Blow down 1.0 %

Overall thermal efficiency <15%

6.0 6.06

49 49 7.0 Ejector Condensorr/GVC etc 5.86 44 44 CEP Condensate recovery 99.0

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Operational PLF
Technology impact Multi fuel technology to be developed Grid interface system to be developed No standby equipments to keep capital cost low System operation impact Rostering of rural feeders Regulatory impact Despatch priority
Whereas technology risk has to be borne by the developer, support required for other areas

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Energy tariff
Energy feed to villages To panchayat-small part at concessional rate to get cooperation Agriculture-at ? rate Rural household at utility rate Rural commercial at commercial rate Export
PPA rate Traded rate
Policy development necessary for determination of remunerative feed in tariff

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Open access charges

What components
Transmission Distribution Losses Despatch Cross subsidy Others
Should tail end DG system be subjected to payment of OA charges ?

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Last Mile DG System-Opportunity for Reducing T&D Losses

States Transmission loss-% Distribution loss-% Total T&D loss %

Andhra Pradesh
Bihar Chattisgarh Gujarat Karnataka Madhya Pradesh Maharashtra Rajasthan

4.27
5.01 3.85 NA 3.79-5.09 NA 4.5

15.48-18.3
41.4 29.37 15.45-32.8 15-32.07 27.4-32.84 29 33-38

20-25
41 34 20-35 20-35 31-38 34 37-42

Last mile DG can make significant Impact on reducing T&D loss

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Summarizing
Strong case for development of last mile grid connected biomass DG system (1-2 MW) Requires policy support during the development phase Financial subsidy
Capital or Generation based

Different tariff structure & rate considering partnership with rural community Preferential Despatch Liberal grid connectivity-utility investment support
Freedom from rostering

Liberal open access-capacity & charges

Exemption from distribution charges & cross-subsidy
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Thank You