Opportunities for development of a “Sugarcane” Industry

1. Opportunities for development of a “Sugarcane” Industry Sugarcane as an Energy crop Harold Davis and Paul Hough April 2006

2. Prevailing Conditions • Caribbean Sugar Industries characterised by high cost • Old Technologies, small factories and relatively high wages • Traditionally dependent on preferential prices for raw sugar • Significant price reductions from EU, the main preferential market

3. Future of Sugarcane in the Caribbean Raw sugar production can no longer sustain an economically industry Exploit the total biomass of this unique crop Electricity generation and ethanol will become increasingly important outputs from sugarcane production

4. Features of Guyana Industry • With a production capacity of 320,000 tonnes at unit cost 18¢ per pound sugar, the Guyana Sugar Industry is probably the most competitive in the SAC group • This Industry is also challenged by the new market prospects arising from the EU cuts • Guysuco has developed a long term strategic plan for cost reduction based on expansion and improved efficiency.

5. Guysuco-Strategy-1998 • Expand Industry & Diversify Product Base • Construct new 8400 tcd mill – to produce refined sugar with co-generation of 10MW electricity • Possible joint venture potable alcohol distillery at new factory • Increase yields and reduce production costs on remainder of industry • By 2010 sugar output 450,000 + tonnes

6. Strategy Implementation • Strategy revolves around reduction in production cost to 12¢ per pound sugar • Cost of operations largely dependent on labour intensive cane cultivation and harvesting • Progress made with layout modification and reducing operating costs by increased mechanisation of agronomic practices • Collaborating with WICSCBS in variety evaluation for energy and other potential uses • 24 MPC varieties being propagated

7. Characteristics – DB 9633

8. Skeldon Project Milestones • 1999-Commence land development for new sugarcane project at Skeldon • 2001-Booker-Tate appointed Project Manger • 2002 -World Bank clearance for financing • 2003- EIA and Env Permit approved • 2004 – Agreement for cogeneration component with Power Company and Financing bank • 2005- Env Management Plan approved • 2005- Factory Contracts signed • 2006- Commence Factory Construction

9. Features of Skeldon Project • Net sugarcane cultivation to increase from 4270ha – estate and 310ha –farmers to 8700 ha – estate and 4250 ha farmers • Factory capacity 8400 tonnes cane per day • Crop duration 27 weeks net! • At steady state design capacity for 1,170,000 tonnes cane and and production of 110,000 VHP sugar

10. Features of Skeldon Project contd. • First diffuser in SAC industries • Rum distillery under consideration as joint venture with Angostura Ltd. • Factory will export 10MW to grid under firm power agreement • Feasibility study and negotiations for refinery as joint regional venture in progress • Refinery may be sited at alternative Berbice factory given Skeldon’s commitment to grid

11. Cogeneration Plant Equipment • Two 125 tons/hr Boilers operating at 53 Bar and 485ºC • Extraction/Condensing T/A output 15MW • Back pressure T/A output 15MW • Three Diesel Alternators combined output 10MW • Heavy Fuel Oil for Diesel Alternators

12. Plant Operating Features • Sugar factory power - 9900 kW • Process steam - 168000 kg/hr • Cogen plant load - 2700 kW • Cogen plant steam - 5700 kg/hr • Bagasse prod @ 34%cane 400000 t • Bagasse consumed in crop 320000 t • Bagasse storage 54000 t

13. Skeldon Cogeneration operation • Projected 10MWexport power from bagasse fired boilers for 37 weeks to 40 weeks including 10 weeks out of crop from stored bagasse • Projected 8MW export power from Diesel alternators when bagasse stock exhausted • Supplementing stored bagasse with imports from Albion will extend out of crop generation period • 6 week window of opportunity for fuel/mpc cane to supplement fuel supply to plant after juice directed to distillery.

14. Energy Content of Sugar-cane (Guyana) 1 Tonne Cane 110 kg sugar 1800MJ 170 kg stalk fibre 3100MJ 140 kg top fibre(trash) 2600MJ Tot. 7500MJ 1 tonne cane approx. equivalent to 1 barrel of oil (ex Dr. M. Regis Leal -2003)

15. Fuel Potential of Sugarcane • Potential for leaves and tops to contribute to boiler fuel • These should be removed prior to process for efficient extraction of sugars and fermentables • Cellulosic materials associated with alkali and alkaline earth ions which can induce slag formation and reduce boiler efficiency • Bagasse has advantage over other cellulosic fuels because extraction and washing removes significant amounts of alkalis and alkaline earths

16. mst Pel Meeting electrical requirements with back-pressure turbogenerators (at constant steam demand) import power export power 1,7 30 bar, 400°C 1,6 1,5 23 bar, 350°C 1,4 40 bar, 450°C 1,3 1,2 60 bar, 500°C 1,1 Specific steam demand (% on beet or cane) Specific electricity demand (kWh/t beet or cane) Live steam conditions at Turbine inlet 1,0 85 bar, 525°C 0,9 0,8 0,7 0,6 0,5 0,4 % 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 Electrical self-sufficiency (100 %) and generation of excess power for export (above 100 %)

17. Power Characteristics –Integrated Factory with Annexed Distillery • Front end consumption - 21kwh/t cane • Process consumption - 8 kwh/t cane • Pot export @45 bar 444°C - 92kwh/t cane • Pot export @ 82 bar 525°C - 143kwh/t cane • Distillery consumption ~ 4kwh/t cane

18. Cogen Potential 4800TCD Case Study Cane Production -``````926100t 5MW Plant - 47kwh/t cane 10 MW Plant - 95kwh/t cane 12 MW Plant - 113kwh/t cane 15 MW Plant - 142kwh/t cane Implies a 15 MW facility can probably be supported

19. Possible Sugar & Ethanol Production - Guyana Pol% cane 11%, Purity 81% • Standard Process – EtOH from final molasses only- sugar – 9% cane, EtOH – 10l/t cane • A strike only – sugar – 6.1% on cane, EtOH – 25l/t cane • A & B strike – sugar – 7.6% on cane, EtOH- 17l/t cane • Ethanol only – 60l/t cane to 66l/t cane

20. Ethanol Research 2002 -2004 • 4800 TCD factory could produce 74000 tonnes sugar and 11.3 M Liters of Ethanol • 11.3 M Liters ethanol will permit 10% substitution in Gasolene • Ethanol production from factory generated molasses and fuel cane indicated to cost between 12¢ to 14¢ per Liter • Import price of Gasolene in 2003 - 24¢ per Liter • Gasolene spot price reached 37¢ per Liter in June 2005

21. Production 4800 TCD Case Study Sugar - 73409t Ethanol - 11.3M liters (a) Cogen 5MW - 42GWh (b) Cogen 12 MW - 105GWh

22. Study Conclusions • Integrated production of sugar, ethanol and energy as electricity offered best economic potential from a factory of 4800 TCD capacity. • Fuel ethanol rapidly growing market possibilities including import substitution by gasolene blends and export • High fibre “energy cane” has potential role in extending crop to periods of weather disruption for power and ethanol production

23. Commercial Ethanol prospects • Full feasibility to be conducted for a 12M liter fuel ethanol distillery from non contract molasses • Strong interest expressed by investors in a 130M liter fuel ethanol project from sugarcane on green field site • This project could support a 30MW cogeneration facility

24. Planned Future Projects • Guysuco future plans include expansions of Enmore, Blairmont and Albion factories to capacities of 4400 to 5100 tcd. • Enmore is planned to be the focus of branded packaged sugar. Albion is being considered as an alternative site for a refinery • The expanded Enmore and Albion factories would have cogeneration capabilities with minimum exports of 7MW

25. Next Steps • Feasibility of Proposed factory expansions • Full Feasibility Study of Integrated Production Model inclusive of ethanol production • Support for national commitment to renewable energy with recognition of the role of sugarcane

26. THANK YOU FOR YOUR ATTENTION