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Economics Aspect on Power Generation by Biomass in Thailand

Economics Aspect on Power Generation by Biomass in Thailand. Surachet Tamronglak, Ph.D. Director Biomass One-Stop Clearing House. Biomass to Energy, Bangkok, February 14, 2006. Agenda. General assumptions Economics of large scale power plants Economics of small scale gasifiers CDM aspects.

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Economics Aspect on Power Generation by Biomass in Thailand

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  1. Economics Aspect on Power Generation by Biomass in Thailand Surachet Tamronglak, Ph.D. Director Biomass One-Stop Clearing House Biomass to Energy, Bangkok, February 14, 2006

  2. Agenda • General assumptions • Economics of large scale power plants • Economics of small scale gasifiers • CDM aspects

  3. General Assumptions • Investment includes development, EPC, IDC and grid connection costs • BOI privilege granted • D/E ratio : 3:1 • Loan period : 7 years • Interest : 6% • Constant loan drawdown during construction • WACC : 7.5%

  4. General Assumptions (cont’d) • Project life : 15 or 20 years • Power cost during plant startup included • Admin. Charge of 2% of total power sales for projects larger than 1 MW • Fixed fuel prices • Fixed power tariff (average peak and off-peak TOU rates plus Ft) • Fixed exchange rate (Baht 40 / US$)

  5. Rice Husk Fired Power Plant • Gross capacity 6 MW (net 5.3 MW) • Total investments Baht 340 mil. • Project life 20 years • Fuel price : Baht 750/ton (incld. transportation) • Fuel consumption 67,000 tons/year • O&M 3% • Net power sales 37 GWh/year • IRR 7.25% • NPV Baht -3.4 mil.

  6. Palm EFB Fired Power Plant • Gross capacity 6 MW (net 5 MW) • Total investments Baht 420 mil. • Project life 20 years • Fuel price : Baht 300/ton (incld. transportation) • Fuel consumption 103,000 tons/yr • O&M 4% • Net power sales 35.1 GWh/year • IRR 7.07% • NPV Baht -7.4 mil.

  7. 1-MW Gasifier Power Plant • Gross capacity 1 MW (net 0.9 MW) • Total investments Baht 45 mil. • Project life 15 years • Fuel price : Baht 500/ton (incld. transportation) • Fuel consumption 10,800 tons/year • O&M 5% • Net power sales 6.5 GWh/year • IRR 30% • NPV Baht 30 mil.

  8. 120-kW Gasifier Power Plant • Gross capacity 120 kW (net 102 kW) • Total investments Baht 6.7 mil. • Project life 15 years • Fuel price : Baht 500/ton (incld. transportation) • Fuel consumption 1,300 tons/year • O&M 10% • Net power sales 0.73 GWh/year • IRR 0.33% • NPV Baht -1.5 mil.

  9. Coal & Natural Gas in Power Generation Natural Gas Coal

  10. Natural Gas Demand • Transportation is not included yet.

  11. Natural Gas Supply • Supply includes 3P (33 tcf), while proven reserve (1P) is approximately 12.5 tcf • At 2005 production level, (3P)R/P is around 45 yrs (~ 15 yrs for 1P) • At 2015 production level, R/P is much shorter • LNG import starts in 2010. More import needed, if transportation is included

  12. Grid Emission Factors (ton/MWh) High Coal Medium Coal Low Coal

  13. CDM Aspect – Case Study 1/3 Case Study: • 8.8 MW (net) biomass power plant • 480 million Baht investment • D/E ratio : 3:1 • Interest 6.5% • 20-year plant life • Without CDM, IRR 11%, NPV 84.5 mil. • CER prices : $7.5 and $15 per ton

  14. CDM Aspect – Case Study 2/3 $7.5 net CER price • Without CDM, NPV = 84.5 mil.Baht, IRR = 11 %

  15. CDM Aspect – Case Study 3/3 $15 net CER price

  16. CDM Aspect – All RE Potential $15 net CER price • Total RE potential = 12,200 GWh/yr or 1,860 MW (biomass 1,400 MW, biogas 160, solar 100 MW, wind 100 MW and MSW 100 MW)

  17. Conclusions • Economy of scales works here • Fuel cost is also a critical factor • Some small scale projects and projects burning difficult fuels need help • CDM can be beneficial

  18. Thank you for your attention Tel: +66-1-837-8525 surachet@efe.or.th

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