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TABLE OF CONTENTS

 

Executive Summary

 

1.0              BACKGROUND 

 

2.0              OBJECTIVES 

 

3.0              NATIONAL POTENTIAL FOR BIO-MASS POWER IN GENERAL AND

RICE HUSK (GASIFIER+GAS ENGINE) BASED POWER IN PARTICULAR

 

3.1              National Data on Rice & Rice Husk Production, Use

3.2              Rice Planting & Process Information

3.3              Estimate of Theoretical & Technical Potentials for Husk-based Power Generation in Bangladesh

3.4              Reconnaissance Survey of Rice Mills - Data/Information collection with special focus on Electric Power & Thermal Energy Use

3.5              Conclusions on the ‘macro’ (national) Husk-based Power Market

3.6              Step-wise Strategy for Demonstration & Replication of the Husk based Power & Thermal Energy Technology

 

4.0              SUMMARY OF RELEVANT DATA / INFO COLLECTED THROUGH

DIRECT RICE MILL VISITS

 

4.1       INPUTS (Paddy, Water, Thermal & Electrical Energy)

 

4.1.1    Paddy Input for Processing to Rice (Overall Processing Capacity)

 

4.1.2    Thermal Energy Use

           

4.1.2.1 Parboiling (Steaming) Process

 

4.1.2.1 Fuel (Rice Husk, NG etc.) to Parboiling Steam

 

4.1.2.2 Heat for Paddy Drying (in Hot Air counter-current  Dryer with Bucket Elevator

 

4.1.2.2.1   Steam pipe Heat Exchange

 

4.1.2.2.1   Stack Heat Exchange

 

 

4.1.3    Electrical Energy Use

 

4.1.3.1 Connected Electrical Load (kW)

4.1.3.2 Generator Capacity with configuration

4.1.3.2 Average Electricity Consumption (kWh/MTon)

4.1.3.2 Milling to Rice

4.1.3.3 Drying Section Electrical Energy Use (Hot Air Blower)

 

4.2       OUTPUTS (Rice, Husk, Animal Feed, Dust)

 

4.2.1    Marketable Rice Output

4.2.2    Rejected Rice (broken / bad/animal feed quality Rice)

4.2.3    Rice Husk Output

4.2.3.1 Husk Use for Steam Boiler

4.2.3.2 Husk Use for                

4.2.4     Rice Bran Output

4.2.5    Waste Dust

 

           

TABLE OF CONTENTS (continued from Page TC-01)

 

 

5.0              PHASE-WISE STRATEGY FOR DEMONSTRATION & DISSEMINATION OF RICE HUSK (GASIFIER) BASED POWER GENERATION TECHNOLOGY

 

5.2              The Need for a ‘Flagship’ (commercial demonstration) Project

5.3              Criteria considered for Selection of ‘Flagship’ - Entrepreneurship

(Motivation),Capacity / Present State of the Mill, Present Power

/ Energy situation / Costs, Ease of Monitoring   

5.1              Identification of an appropriate Rice Mill as a ‘Flagship Project’

5.2              Possible Modes of Project Co-operation (between GTZ, Technology

Provider & Rice Mill Owner or an interested neutral Investor 

5.3              Future Strategies for Dissemination to typical Mid & Smaller Capacity

Rice Mills - the major Rice Mill Power Market

 

6.0              PROPOSED TECHNO-ECONOMIC ANALYSIS (PRE-INVESTMENT PROJECT BRIEF) ON THE RICE HUSK BASED POWER PLANT INVESTMENT (BIO-MASS GASIFIER + GAS ENGINE GENSETS)

 

6.1              The Proposed first ‘Flagship’ Rice Mill Project - its current & future capacity

 

6.1.1        TECHNICAL ASPECTS

 

6.1.1.1             Proposed Power Plant Capacity with Justifications

6.1.1.2             Required Infrastructure (Land req../Built-up area)

6.1.1.3             Suggested Technology / Technology Options

6.1.1.4             Suggested Technology Transfer Mode (Supervision during Installation, Testing/Commissioning & Training)

6.1.1.5             Plant / Machinery / Equipment (Gasifier, Gas Engines for      Power, Thermal Operations of Boiler & Dryer & budget

6.1.1.6             Testing, Commissioning & Training by Experts) by   Potential Plant/Equipment/Technology Supplier

 6.1.1.7           Project Milestones (Implementation Schedule)

 

6.1.2    FINANCIAL/ ECONOMIC ASPECTS

 

6.1.2.1            Incremental Project Investment Costs (for Efficient use of Electrical and Thermal Energy)

6.1.2.2             Assumed Equity / Debt Ratio (Sponsor & Financial Institutions/Banks)

6.1.2.3                          Debt Service Costs (Estimated Financial Expenses (Interests + Installments)

6.1.2.4             Projected Estimate of Revenue / Benefit stream 

6.1.2.3             Operating Costs

6.1.2.5             Projected Income Statement

6.1.2.6             Projected Cash flow Estimate

6.1.2.7             Debt-service Coverage Ratio (DSCR)

6.1.2.8             Break-even Analysis

6.1.2.9             Financial Internal Rate of Return (FIRR) / Pay-back Period

6.1.2.10           Economic Internal Rate of Return (EIRR)

6.1.2.11           Contributions to GDP

6.1.2.12           Potential Macro (national) Impacts in the Energy Sector

 

7.0       Summary of Conclusions & Recommendations     

               

  

TABLE OF CONTENTS (continued from Page TC-02)

 

 

 

ANNEXURE

 

 

§       Map of Reconnaissance Survey Areas (Rice Mills) visited showing also most recommended Locations of the Proposed ‘Flagship Projects’

 

§       Basic Data/Information on Rice Mills visited (filled-in copies of Questionnaires/Info/Data Formats on Rice Mills visited during Reconnaissance Survey

 

§       Rice Planting Information (Seasons, Climate conditions)

 

§       National Energy  Policy (including Renewable Energy)

 

§       Voltage, Frequency & Other Electrical data

 

§       Moisture content of rice husk & moisture content for Rice milling

 

§       Connected Power/Load requirement for Rice Mills & Other Power Use related data (Voltage, Frequency, & Power Tariff)

  

 

EXECUTIVE SUMARY

 

ES-01

EXECUTIVE SUMMARY

 

1.0       PROJECT BACKGROUND                   

 

Efficient and technically proven ‘New Bio-mass Technologies’ are globally emerging as one of the major ‘carbon-neutral’ renewable energy technologies of the 21^st century. Biomass has an unique position amongst the renewable resources in being both a source of energy and, at the same time, a ‘sink’ for carbon-dioxide and other Greenhouse gases. Given by the climatic and related vegetation conditions,  developing countries like Bangladesh possess a great potential to harness the energy from biomass in general and that from rice husk in particular. In fact, already about 53% percent of the total primary energy currently used in Bangladesh, is derived from the Traditional Biomass, such as Rice Husk, Rice Hulls, Rice Straw, Tree Residues, Fuel wood, Jute Stick, Cow Dung and other biomass energy resources, the other 47% being derived from commercial fuels - the indigenous natural gas (primarily for power and fertilizer), imported petroleum fuels (for transport and irrigation) and also Coal. The use of such ‘traditional’ biomass in Bangladesh, however, is done in a very inefficient manner, primarily as a cooking fuel in rural areas. A large part of rice husk is presently combusted in Bangladesh to fire very inefficient boilers in over one hundred thousand its rice mills, scattered all over the country, to generate steam for parboiling of rice which is a major practice in paddy/rice processing in India, Bangladesh, Pakistan, Thailand.

 

This Techno-economic Feasibility Study analyzes the Market, Technical and Financial / Economic Aspects  of Power Generation, using globally proven Rice Husk Gasification Technology for generating uninterrupted and sustainable electric power with which the rice mills could be served, either as small captive units (about 200 kW range on an average) and/or also as relatively larger central plants (1 - 6 MW range) in ‘rice mill cluster’ areas, which can also be connected to the existing electricity grid (as a back-up, with a GoB policy, supporting a provision to buy any surplus electricity that may be produced during off-production of the mills.    

 

2.0              THE COUNTRY POTENTIAL FOR POWER GENERATION FROM RICE HUSK -  THEORETICAL & TECHNICAL  

 

Bangladesh produces, on the average, not considering extreme cases of natural climate disasters, such as floods and severe cyclones/hurricanes, which were faced in the recent past, about 40 - 45,000,000 metric tons (MT) of Paddy annually. Taking a 20% yield of husk, based on input paddy, this leads to a production of 8 - 9,000,000 metric tons of Rice Husk annually.

 

Using the Biomass Gasifier Technology and considering that about half of the husk is used for energy applications such as domestic cooking, steam production for rice parboiling etc., the Theoretical Potential (E _THEOR.) about half of the remaining husk i.e. 4 million MT / Yr. of husk, is estimated at a little over about 400 MW of capacity, taking about 16-hr/day x 300 days of typical Rice Mill operation, if a gross specific consumption of about 2 kg of husk per kWh of electricity generated. The Technical Potential (E_TECH)_.), however, considering many practical factors, based on the size, number and the location of the rice mills, the estimate is indicative of about 100 MW which is the typical electric load requirement about 500 Rice Mills amongst a total national rice mill population of over 100,000, requiring an average electricity generation of about 200 kW (or 250 kVA) for each mill..

 

       

3.0              THE HUSK POWER MARKET POTENTIAL

 

The Rice Mill Owners’ Association of Bangladesh reports over one hundred thousand rice mills which are located in a scattered manner all over the country with about four (4) ‘cluster’ area. Over ninety percent of these rice mills are reported to be in the smaller capacity ranges, i.e. < 20 - 25 MT/day of Paddy processing capacity. The number of lower-mid sized rice mills (with paddy processing capacity range : > 25 - 50 MT/day) are reported to be about 490 and that of mid to large sized rice mills (30- 120 MT/day) are about 50 units. As already mentioned, primarily, about five (5) distinct ‘cluster’ areas of rice mills are known in the country - (i) Dinajpur (North Bengal) (ii) Sherpur (near Bogra) (iii) Inshawerdi and (iv) Kaliakoir (near Dhaka), where most of the rice mills are located in a dense manner, i.e. in close proximity to each other. Hence, based preliminary surveys (ref.: Bangladesh Rice Research Institute, BRRI and information from Rice Mill Owners’ Association), typically at least over 500 rice mills are located in these cluster areas. Taking an average (lower-mid) capacity range of about 100-200 kW, there is a 50-100 MW power market in these cluster areas.

 

ES-02

 

4.0              STRATEGIES FOR ENTRY INTO THE HUSK POWER MARKET

AND UP-SCALING OF THE INITIAL ‘FLAGSHIPS’

 

The study considers the demonstration and up-scaling of the rice husk based power generation for meeting the electricity requirements of the rice mills through two approaches : ‘Flagship’ (or demonstration) projects - (i) one in the national higher capacity range : 600 kW and another (ii) 200 kW average mid capacity range. The strategy should be to create first a confidence amongst the rice mill owners on the technology, its user-friendliness, as well as its financial viability from commercial / micro-economic considerations, as it was first done in India, China and Thailand. In fact, in developing countries, the ‘Flagship Project’ constitutes a very important strategy to make a market entry for new/emerging technologies. While it is important to establish the confidence of the rice mill owners on the techno-economic aspects of the rice husk based power plants to cater their power needs on routine, the next, or a rather a parallel, step could be to scale up the husk based power plants to nationally more beneficial, relatively larger central Renewable Energy IPPs (Capacities analyzed : 1 - 6 MW range), provided appropriate investors/entrepreneurs can be geared up for such a up-scaled plant sizes, even  before or parallel to establishing such technologies through routine field operations. However, investments of such magnitude should be made with appropriate GoB Policies, proper feed-in tariffs (being a renewable IPP) etc. Such larger plants, as financial/economic analysis shows, will have better advantages, as these will enjoy a more advantageous economy of scale, real economic pricing of husk, fiscal and other incentives that can be or rather should be extended to such IPPs, including buy-back benefits for the Husk Ash produced by such large plants and, of course the Clean Development Mechanism (CDM) benefits. Through this approach, a fast growth and its sustainability can be ensured.

 

5.0              THE TECHNOLOGY & KNOW HOW

 

 

The technology for husk gasification to produce electric power is quite proven and, as already mentioned. While India, based on their earlier approach, concentrated more on smaller fixed-bed husk gasifiers and dual-fuel concepts (i.e. producer gas (about 70% from husk gasification plants +  about 30% diesel fuel), China and Thailand have reportedly attained quite successful, cost-effective and hence more sustainable operation through fluidized bed gasification technology + 100% producer gas-based I.C. Engine-Generators.

 

Although the investment costs for 100% Gas based systems are little higher (between US$ 800 - 1000.- per kW, installed) than the dual-fuel systems, the 100% Gas mode systems are operating almost continuously, without reported shutdowns over long periods.

 

The principle is simple. The rice husk is gasified in a fluidized-bed reactor to yield “Producer Gas”, which comprises primarily of a mix of combustible gases - Carbon Monoxide (CO), Hydrogen and Methane, with an average (more or less steady heat value of about 4,600 kJ/m³. The combustible gases are cleaned, cooled, filtered and stored in a buffer gas holder, from where it is fed to Producer Gas Engines, having Engine Heat Rates of about 16 - 16.5 kJ/ kWhr. to run the Engine-Generator sets. The tar production is minimum in the fluidized process (<50 mg / m³), which eases its disposal and increases the life of the engine. It produces electricity also more cost-effectively, there being no diesel and its operation also requires less operator skills. The dual fuel systems, on the other hand, produce electricity at a higher cost (with 30% diesel cost added to the cost of input husk). They also require better skilled hands to adjust the ratio between producer gas and diesel, which is always tricky - the reason why India is also presently switching over to the 100% Producer Gas based technology.  Apart from these advantages, the CDM benefits are obviously more for the 100% Gas systems.  

6.0              TECHNO-ECONOMIC / FINANCIAL ANALYSIS

 

 

Based on global (budgetary) quotes, the Investments, Cash flow and Returns have been analyzed, using the discounted cashflow method. The results are as under :

 

Rice Husk Power Capacities :         200 kW                  600 kW                  As Central Plants                   

                                [ Initial ‘Flagship Projects; ]                               [ In ‘Cluster areas]  - 2 MW                    6    MW

                                                ---------------         ----------              ---------------------------------   ------------

• Investment                     US$ 250,000.-  US$ 500,000.-        US$ 1,400,000.-          US$ 3,500,000

 

• Financial Internal

Rate of Return (FIRR)     13.82%             18.75%                 24.61%                       26.92%            

                                                            (Base Case)

             

[Average Base Husk Price assumed at. Tk. 1.00 / kg or Tk. 20/-  (per 20 kg Bag and Savings are  considered at Tk. 4.75 per kWh]

 

ES-04

  

 

6.1       SENSITIVITY ANALYSIS  

 

 

Sensitivity test of the project to variation of various parameters on the Base Case (600 KW ‘Flagship’) has been made, which considers the variation of the following parameters :

 

·         Base Case with 600 kW Plant ‘Flagship Project’ Investment

·         Small-Mid sized (200 kW) ‘Flagship Project’

·         Investment Cost Increase (e.g. Increase in Capital Equipment

·         Larger Investment -  for Large (2 MW & 6 MW) Central Plants

·         Escalation of Capital cost by other reasons (additional/unforeseen

local cost components, capital cost escalation caused by possible excessive delay in implementation etc)

·         Operating Cost Increase

·         Increase of Grid Electricity Tariff (Increase in Project Benefits)

 

 

       (A)       POWER PLANT SIZES  - 200 - 600 kW FLAGSHIPS & UP-SCALED 2 MW - 6 MW

 

                                                            FIRR (%)           Variationse s of IRR (over Base Case)

     

A-1       200 - 600 kW ‘FLAGHSIP PLANTS’ 

 

01.               Base Case (600 kW)            18.75%               0.00 (Base-line IRR)

 

02.               Small-mid Sized Plants

(200 kW) as ‘Flagship’          13.82%             - 4.93%

 

    

      A-2          2 MW -  6 MW  UP-SCALED PLANTS (AS CENTRAL RENEWABLE IPPS)

 

2 MW Plants                 6 MW Plants

 

• Investment         US$ 1,400,000.- US$ 3,900,000.-

 

• FIRR                 24.61%                         26.92%                                    

 

• Variation from

Base Case        + 5.86%                        +8.17%

 

The above analysis on the variation of Plant size, shows the much better ‘economy of scale’ of the large plants (2 MW to 6 MW)