economics aspect on power generation by biomass in thailand surachet tamronglak, ph.d. director...

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

Biomass to EnergyBangkok, February 14, 2006 Biomass One-stop Clearing House

Agenda

General assumptions Economics of large scale power

plants Economics of small scale gasifiers CDM aspects


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%


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$)


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.


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.


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.


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.


Coal & Natural Gas in Power Generation

0

10

20

30

40

50

60

70

80

90

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

%

Natural Gas

Coal


Natural Gas Demand

YearTotal

(MMSCFD)Power

Generation(%)

GSP(Petrochem)

(%)

Industry(%)

2005 3,000 74 17 9

2015 6,360 66 22 12

•Transportation is not included yet.


Natural Gas Supply

Year Domestic(%)

NewDomestic

(%)

PipedImport

(%)

LNGImport

(%)

2005 74 - 26 -

2015 31 32 15 22

•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


Grid Emission Factors (ton/MWh)

0.480

0.500

0.520

0.540

0.560

0.580

0.600

0.620

0.640

0.660

2011 2012 2013 2014 2015

Low Coal

Medium Coal

High Coal


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



Scenario LowCoal

Medium Coal

HighCoal

Add.Rev. (mil.Baht/yr)

10.8 11.8 12.8

NPV(mil.Baht)

179.7 188.5 197.3

IRR(%)

13.1 13.3 13.5

• Without CDM, NPV = 84.5 mil.Baht, IRR = 11 %

$7.5 net CER price



Scenario LowCoal

Medium Coal

HighCoal


21.5 23.5 25.5

NPV(mil.Baht)

274.8 292.4 310.0

IRR(%)

21.5 23.5 25.5

$15 net CER price


CDM Aspect – All RE Potential

Scenario LowCoal

Medium Coal

HighCoal


3,950 4,320 4,690

$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)


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


Thank you for your attention

Tel: +66-1-837-8525

[email protected]

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