olive oil 13 05 10

GUIDELINES

for projects aiming to use pomace

for energy purposes

ENERGYFROM

POMACE

Prepared by

Co-ordinated by

Graphic lay out

Printed on Arjowiggins recycled paper by

EIDOS coop, Raffaella Bruzzone, Roberta Casapietra, Maria Fabianelli,

Belén Heredia Galán, Walter Geloso, Kostas Kostantinou, José La Cal Herrera,

Ninoslav Luk, Juan Antonio Miralles, Elena Romero Aranda, Sebastjan Rosa,

Pierpaolo Rossodivita, Irene Tsakiridou

Roberta Casapietra - ARE LIGURIA S.p.A.

ALG snc - Genova

ALG snc - Genova

Printed in April 2010

1

Table of contents

1

2

3

3.1

3.2

3.3

3.4

3.5

3.6

4

4.1

4.2

4.3

4.4

4.5

Aims

Guidelines structure

Process for the identification and evaluation

of the project

Introduction

Step 1 - Context Analysis

Step 2 - Current and forseen demand analysis

Step 3 - Technology analysis

Step 4 - Project Alternatives Identification

Step 5 - Analysis and evaluation of the project

alternatives

Technical sheets

Sheets concerning Step 1 - Context Analysis

Sheets concerning Step 2 - Current and foreesen

demnd analysis

Sheets concerning Step 3 - Tecnology Analysis

Sheets concerning Step 4 - Project alternative

identification

Sheets concerning Step 5 - Alternative analysis and

evaluation

3

5

6

6

7

11

12

13

14

26

26

30

31

33

34

2

Glossary

!

!

!

!

Pit: The olive stone.

Pomace or virgin pomace or olive

pomace or crude olive cake: The

residual paste after the olive oil

extraction. It is constituted from a

mixture of olive pit/stone, olive pulp

& skin, as well as olive oil plus the

water added in the olive mills. The

moisture content is about 35-70%

depending on the olive oil

production process.

Dried pomace: contains oil, pulp, with or without pits,

approx.10% humidity.

Exhausted pomace or depleted pomace or extracted pomace

or exhausted (deoiled) olive cake: normally produced by

pomace oil refineries, contains: pulp, with or without pits,

approx.10 % humidity (extracted with hexane).

Olive pit Dried pomace

Virgin pomace

This document defines guidelines for the evaluation of the feasibility conditions for

the realisation of an olive pomace-to-energy plant based on a local supply chain,

replacing the fossil fuels (mainly diesel oil and natural gas).1Olive pomace is an important resource in the European Union: each year in EU we

produce more that 7 million tons of olive pomace that can be used for energy

production instead of being disposed of as waste.

Particularly, the guidelines help in delineating the project characteristics in terms of

technological, economic and environmental aspects as well as in evaluating the

sustainability under the entrepreneurial profile.

These guidelines make reference both to consolidated methodologies, exploited at

an international level, and to the testing, carried out during the MORE Project,

through the elaboration of Business Plans in the partner regions (Liguria in Italy,

Province of Jaen in Spain, Istria in

Slovenia and Croatia, Crete in

Greece). These guidelines represent

an operating tool for non-specialised

people to identify, plan and evaluate

economically sustainable supply

chain initiatives to exploit pomace for

energy purposes. Particularly, they

can be useful for:

! Public Bodies willing to promote

and support in their territory the

development of ventures giving

potentially large scale advantages

for the community, both in terms of employment and product added value as well

as economic saving and environmental protection;

! Operators in the energy or agricultural-food sectors wanting to develop and/or

integrate their economic activities, seizing the opportunity offered by biomass

energy exploitation (e.g. Olive-millers to better manage their solid residues and

use them as a renewable energy source);

! New entrepreneurial entities wanting to start economic initiatives in the energy

sector.

1 Olive pomace is the raw material derived from olive oil production processes and it is a mixture of olive pits, olive pulp and the

water added in the olive mills. The moisture content is approximately 40-70% depending on the olive oil extraction process. The

amount of raw material depends on climate conditions, which determine the annual production period (8 to 9 months/year). The

average heating value of dry pomace (with stones, low moisture content) is 3500-4000 kcal/kg while for pits is 4000-4500

kcal/kg. 3

1. Aims

Olive leaves remover

4

1. Aims

In general there are two approaches to exploit pomace for energy at technological

level:

> Direct combustion at biomass burners for the production of space heating or hot

water. The simplest way to exploit pomace for energy production is by direct

combustion. Combustion type boilers give off their heat to radiators in exactly the

same way as e.g. a diesel-fired one. These boilers are mainly automatic; they are

equipped with a silo containing pomace (which can be dry or depleted pomace, pit or

pellet)

> Combustion in a biomass plant for the production of electricity and/or district heating

(CHP). Co-generation requires a more intensive and larger scale production plant

and a certain amount of fuel is needed to ensure the sustainability of the plant. You

can use dry or depleted pomace.

Generally speaking, in those areas where only virgin pomace is available, it will be

necessary to foresee also a treatment plant, in order to obtain dried pomace.

The potential of making pellets out of pomace is also a viable alternative.

Pit packaging machine

This document consists of two sections:

a)The first section (chapter 3) deals with the process used to identify, plan and

evaluate the economic and financial sustainability of the initiative concerning the

construction of a pomace plant for energy purposes. It goes step by step through

a logical path made of analysis, identification of solutions and final evaluation. The

methods used are also described in this part.

b) The second section (chapter 4) contains the technical sheets displaying the

contents and useful tools for the development of each step in which the process is

articulated.

5

2. Guidelines structure

3.1 IntroductionThe proposed process consists of 5 steps, which respond to key for the decision

maker to take a rational choice:

1) How much pomace is available, where and when?

(context analysis);

2) Who could be interested in using pomace as fuel?

(demand analysis);

3) Which kind of plant?

(technology analysis);

4) What can be implemented in our territory?

(design of the alternatives);

5) Which is the best solution?

(alternatives analysis and evaluation).

CONTEXTANALYSIS

ALTERNATIVEIDENTIFICATION

CURRENT ANDFORESEEN DEMAND

ANALYSIS

TECHMOLOGYANALYSIS

ANALYSIS ANDEVALUATION OF THE

ALTERNATIVESINPUT

DECISIONMAKER

Fig. 1 The process steps6

3. Process for the identification and evaluation of the project

7


3.2 Step 1 - Context Analysis

a) Reference scenario analysis

This step starts from the analysis of the pomace oil market at the European and

Worldwide levels, pointing out the economic revenue in terms of earning margins.

The historical analysis of pomace production is carried out and focused on this

product role changes in the last decades: from agricultural - food industry refinement

to waste disposal with an increasing cost, until a value recovery through an

innovative use in the energy field.

From a methodological standpoint, it is important to know and assess the supply and

demand factors of the energy sector, its regulatory provisions, level of technological

development, possible distribution channels and the trends underway.

A specific legal framework will be drafted with reference to the rules that place

restrictions on initiatives and policy analysis is important (e.g. promotion of

renewable energy quota) as much as knowledge of incentives for

biomass/renewable energy.

b) Analysis of pomace supply

The main characteristics of the target territory as well as olive oil/pomace production

need to be examined. More specifically, it is important to understand:

! the olive oil production level, with the aim to find the areas where the greatest olive

oil/pomace productions concentrate

! the current modes and costs for pomace

collection and disposal (f.e. land

spreading, pomace oil refinery,

depitting, etc.)

! the prices paid to the olive oil

mills for pomace (and/or only

pit) (where pomace has

still a value for

industrial purposes

eg.: pomace refineries).

In the areas (countries/regions)

where olive pomace is still

not evaluated in terms of price

8

and services and if service costs does not exist yet, it is necessary to evaluate and

calculate the possible service costs and potential financial value of pomace.

! the territory's main characteristics, in terms of development forecasts and/or

transformations in progress

! pomace production trend through an historical analysis of the olive oil production

cycles in the mills which might point out different yearly production due for example

to alternate olive trees bearings. In areas where olive growing is still in developing

phase it is necessary to estimate the trends of newly planted olive trees in order to

forecast the future scenario of potentially expected amounts of olive pomace

! the location of current olive oil (and then pomace) production according to

administrative subdivisions (eg.: province, municipalities or other geographical

delineation)

! pomace quantity presumably available and able to sustain the initiative. Linear

regression models can be used to make forecasts, or predict the future data for a

time series in order to test hypotheses or to model dependent relationships

! the geographical context (eg. environmental or morphological constraints capable

to affect olive production; termination of production life cycle of existing trees, etc.)

in order to validate forecasts.

Fig 2: Linear Regression

4

3

2

1

0

0,2 0,4 0,6 0,8 1,0

LINEARREGRESSION


c) Opportunities and Threats Analysis

In order to identify the technical and management hypotheses concerning project

implementation, it is useful to detect the threats and opportunities characterising

pomace in the perspective of its exploitation in the energy market. The elements

resulting from this analysis shall be later used to better orient and define the business

model supporting the initiative.

As far as the analysis of opportunities and threats is concerned, it is necessary to

carefully examine the prescriptions in force concerning the use of pomace, since

often the different national laws, complying with the adopted classifications (residues

which can be re-used in the food industry or waste to dispose or conduct mandatory

treatment according to differentiated procedures) limit the ways of use. We normally

use the SWOT analysis methodology.

9


Pit storage silo

Strengths (S) Weaknesses (W)

Opportunities

(O)

Threats

(T)

Internal Analysis

S-O Strategies:

Develop new methods able to exploit

the strengths of the company.

S-T Strategies:

Exploit strengths to mitigate threats.

W-O Strategies:

Eliminate weaknesses to enable

new opportunities.

W-T Strategies:

Determine actions to prevent

threats from worsening

weaknesses.

SWOT ANALYSIS

An

aly

sis

10


Focus. SWOT ANALYSIS

it is a strategic planning tool used to assess the Strengths, Weaknesses,

Opportunities and Threats of a project or business venture when an organization or a

decision maker has to take a certain decision to achieve an objective.

The validity of a SWOT analysis is directly related to how complete preliminary

studies are.

The issue under assessment should be studied in detail in order to determine all the

parameters, relationships and synergies with other solutions.

For this reason it is necessary to build a broad information framework to support

decisions.

In particular, a SWOT analysis is expressed by:

! Strengths: attributes of the organization or company or project that are helpful to

achieve the objective;

! Weaknesses: attributes of the organization or company or project that are

considered harmful to achieve the objective;

! Opportunities: external conditions considered helpful to achieve the objective;

! Threats: represent the risks deriving from external conditions that could damage to

the performance of the company or project.

A typical example of a scheme for a SWOT analysis model is provided below:

Table 1

3.3 Step 2 - Current and foreseen demand analysis

In order to analyse the demand side and make suitable forecasts., it is advisable to:

! collect market data on a national/regional scale concerning use of pomace energy

or, in its absence, to obtain information concerning other kinds of similar biomass,

for example wood pellets or wood chips, in order to understand market trends and

the tendency towards alternative fuels consumption

! define potential customers on the territory related to the project, both in terms of

energy plants which can be adapted to use pomace as fuel and obsolete plants to

be replaced by new ones powered by pomace.

An analysis of the concentration of potential consumption is another useful method,

associated to the demand analysis, in order to determine, at geographical level, the

capacity to attract users on the local market (in terms of distances and transport

issues).

11


Malaxer

3.4 Step 3 - Technology analysis

This step will help to delineate the scenario related to existing energy technologies,

pointing out the market trend of the different plant typologies (eg.: centralised or

autonomous boilers, air generators, industrial boilers, heat generators or public plants,

etc.) and to supply information about pomace fuelled energy plants existing in the

market (their technical characteristics, suppliers, costs, advantages and

disadvantages).

The choice of the right technology shall be based on:

! the size: each technology has its best application (in terms of costs and

performance) with specific biomass quantities - it therefore will be chosen also

according to biomass availability at local level

! demand size and demand timing: demand and supply have to match in terms of

quantities and timing - in case of limited supply, only a smaller plant will be

possible; in case of great supply, the demand will not be sufficient and probably

stocking will become necessary

! demand location: densely populated areas probably prevent the installation of

big plants, while rural areas, characterised by sparsely located houses, affect the

possibility to use the heat in a concentrated way;

! environmental aspects: small biomass plants (eg. domestic heat appliances)

have a proportionally higher environmental impact because (differently from

bigger plants) they are not equipped with sophisticated smokes filters and are

therefore only possible in non polluted areas and in limited number.

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3.5 Step 4 - Project Alternatives Identification

In this step all the possible combinations between potential final users of pomace for

energy (eg. families, companies with high or low energy consumption level, Public

Administration, etc), and the product (eg. virgin pomace, dried/depleted pomace,

pellet/pit, type of energy plant) will be identified and analysed. These combinations

lead to define one or more technical and management hypotheses for pomace

use/transformation.

If the local market shows inconsistent characteristics because of its immaturity, the

analysis can be focused, particularly, on the segment of the public bodies taking the

role of "bridgehead", favouring the beginning of market product absorption and

carrying out the function of livening up the market, able to activate on the territory an

economic pomace - energy production chain.

For each market segment chosen by the business strategy the benefits are analysed

and obtained using pomace as fuel as an alternative to the fossil ones which are

more commonly used.

It is then necessary to point out that operators of the market should know the

identified choices of the project, in order to express their satisfaction.

The project promoter shall, then, identify and use the most appropriate tools and

communication ways to efficiently reach the greatest number of stakeholders

potentially interested in the project. Olive growers, olive oil-millers, olive oil

companies, companies in the energy sector and Local Bodies are the target to

address the training/information actions concerning the identified project, which can

be carried out through mailing and e-mailing, seminars, brochures, advertisement in

specialised and non-specialised press.

A Cost-Benefit Analysis (CBA) was used with respect to applicable metho-

dology.

13


Stone mill

3.6 Step 5 - Analysis and evaluation of the project alternatives

Each project alternative considered feasible or that, in any case, is considered of

significant interest, is analysed based on the factors set forth below:

a) Management model

At first it is necessary to identify the business model by defining the relation system

established between pomace use/transformation with the other stakeholders

composing the olive tree - pomace - energy supply chain.

b) Ownership Structure

The ownership structure of the pomace use/transformation supply chain is defined

according to the previously defined model, providing the possibility of constituting

public-private partnerships. For each of the stakeholders joining the ownership

structure a description defining also its tasks and target in the project field should be

supplied.

The choice of the stakeholders will depend on the innovative character of the

initiative and its return level (which will be evaluated later).

Then the juridical form to be assumed by the project is delineated (even as a function

of the participants nature - public, private, etc.).

c) Organisation features

It is necessary to define the organisation of a structure able to promote the pomace

use/transformation into energy in terms of company functions such as technical,

operating, management profiles, defining, at the same time, the activity to outsource.

The amount of staff is then determined as well as its roles and responsibilities.

14


Stone mill

d) Technological characteristics

The chosen technological configuration should be described, together with the main

technical components and features (e.g.: production capacity, installed electrical

power, thermal power, processing temperature of the heat exchanger, etc.).

The technological features should be such as to guarantee production (of pomace

and/or energy) quantities coherent with the requirements of the target customers

and qualitative standards complying with the prescriptions of this sector.

e) Location and logistics

It is necessary to define the site of the facilities using/transforming pomace into

energy, identifying its geographic location and the surface area needed for

infrastructure (office space, sheds, other buildings) as well as operational space in

which it should be subdivided (eg.: stocking, transformation, pomace weighing,

general services).

The choice of the plant site is strongly related to logistics. Indeed, it is necessary to

define the pomace supply chain and distribution chain (dried pomace, pellets, pits)

with respect to the management model determined, describing the transportation

and stocking phases composing it, with particular reference to the amounts handled,

distances, timeframes and transfer costs for collection and distribution, from the

collection points in the territory, to customer locations and their distance from the

plant site as well as the optimal routes for reaching them.

For the purpose of methodology, current traffic flow analyses can be used as

reference based on documentation available or from bodies managing the road

network or highways.

Based on this data it is possible to develop simulations to determine itineraries and

transport flow for raw materials (wet pomace, dry/depleted pomace, pomace pellets

or pits), in consideration of the traffic flow according to time of day and season of the

year.

15


Olive press (traditional system)

f) Economic-financial assessment

The assessment of the identified management solution is dealt with using two

different analysis profiles:

! The value analysis, aiming at verifying the capacity of the business venture to

sustain itself, both from the economic and financial points of view, repaying the

investment;

! The analysis of the breakeven point, aiming at identifying, as the minimum target,

the product quantities which must be necessarily put on the market to guarantee

covering the costs incurred for project implementation and operations.

In particular, the value is analyzed by making forecasts on operating cash flow

(OCF) generated by the initiative (see table below) and for a preset time span, i.e.,

normally the number of useful life years of the technology used. The obtained figures

are then discounted at a certain discount rate in order to adjust the values to the time

span.

Table 2

16

Operating Cash Flow

(amounts in €)

Description Total Year 1 Year 2 Year n

a) Net revenues

b) Direct cost of sales

c) Contribution margin (a-b)

d) Fixed costs

e) Operating income

f) Operating income tax

g) Amortization and depreciation

h) Cash-flow (a-b+c)

i) Investments

l) OCF (h-e)

m) Cumulative cash flow


The discounting process makes it possible to calculate financial sustainability

indices for the initiative, which show, in particular, return on investment (IRR) and

economic value or wealth created (NPV) after completing the project.

The table below shows the calculation formulas for these two indicators and their

acceptable thresholds.

Table 3

The values used to calculate the OCF comprise investment costs necessary to

implement the project, revenues and operating costs. These items make up the

monetary quantification of the projects developed and analyzed above (see points

a,b,c,d,e).

The choice of the discount rate depends on whether the project is entirely funded with

public resources or if all or part of the funds are from private investment through capital

contributions from parties investing in the project by having recourse to bank loans.

In the first case the discount rate is between 5% and 6% according to prescriptions

from national governments or the European Union.

In the second case the calculation depends on the Weighted Average Cost of

Capital or WACC (see table below).

Table 4

Legend: OCF = Operating Cash Flow; D = Discount Rate; t = years

Indicator Acceptable ThresholdFormula

Net Present Value (NPV)

Internal Rate of Return (IRR)

S -t-1FOCF(t) x (1+D)

S -t-1FOCF(t) x (1+IRR) = 0

NPV > 0

IRR > D

17

Own capital

Banks

Soft loans

Total

WACC

3,000.00

5,000.00

2,000.00

10,000.00

Source

of financing

Amount

(a)

Weight

(b)

Weighted cost

(bxc)

Specific cost

(c)

3.00%

3.50%

0.60%

7.10%

30.00%

50.00%

20.00%

10.00%

7.00%

3.00%


It should be mentioned that for bank loans and soft loans the cost of money,

expressed by the specific interest rate of reference, is an actual cost, while for the

cost of own capital the rate is an opportunity cost. Indeed, it is the rate of return

expected by private investors on their investment. Its estimation is not easy to

determine and there are various methods in the literature to calculate it. The most

recent theory (Market Risk Premium), supported by empirical studies, is geared

towards considering an opportunity cost between 9% and 10% for a private operator

where there is also public financing to support the initiative.

The breakeven point (BEP) analysis, also known as the Cost-Volume-Profit

analysis, is made by computing the following four variables: total sales

(quantity sold - Q) , revenues, variable costs (direct cost of sales) and fixed

costs (see figure below).

Figure 3

It should be noted how variable costs are only those closely related to realizing the

quantity of energy product to obtain, such as wet pomace to be transformed, transport

costs and labour costs for transforming wet pomace.

The volume of breakeven revenues, i.e., the amount of sales needed to cover

operating costs, is obtained by applying the following formula:

A : fixed costs1

A : contribution margin ratio = total contribution margin / total sales2

B = A /Aeven 1 218

QQ’

€

€’BEP

Revenue

Total Cost

Variable Cost

Fixed Cost


The amount of product needed to reach the breakeven point is obtained by dividing

the breakeven sales by the unit sales price.

Lastly, it should be mentioned that if there are soft loans involved for the project it is

necessary to show the main effects on the financial results obtained and compare

the impact of using public funding with not using public funding.

g) Cost benefit analysis

A cost-benefit study is performed to assess if it is cost-effective for potential

customers to use pomace instead of fossil fuels, as well as its impact on the

environment In particular, for the cost-benefit study an assessment model based on

Differential Cash Flow (DCF) can be prepared, making it possible to compare

alternative situations for example, (see table 5): one where the potential customer

uses a fossil fuel boiler and one where the customer uses a pomace(pit)-burning

boiler.

19


Auger conveying pit or pomace

Table 5

The variables considered over the time of useful life of the new technology, which is

assessed when introduced, are the boiler purchase cost and costs for maintenance

and fuel.

It should be mentioned that if the potential customer already has a fossil fuel boiler

then the value of the boiler, not yet adjusted for depreciation, is accounted for and

considered as an added cost.

The DCF indicates the amount of resources available or needed when using an

alternative solution, without considering demand or use of surplus.

The DCF can be discounted following the same method used in the financial

analysis, thus obtaining two indicators, NPV and IRR, which measure cost-

effectiveness while taking the time factor into consideration.

Total Year 1 Year 2 Year n

Differential Cash Flow

(amounts in €)

Description

a) Situation of boiler burning

pomace

(e.g., dry pomace)

a.1) Cost to purchase boiler

a.2) Yearly maintenance cost

a.3) Yearly fuel cost

a.4) Cash Flow situation pomace

( a.1÷a.3)

b) Situation of boiler burning XXX.

(fossil fuel)

b.1) Cost to purchase boiler

b.2) Yearly maintenance cost

b.3) Yearly fuel cost

b.4) Cash Flow situation of boiler

burning XXX. ( b.1÷b.3)

c) Differential cash flow

(b.4-a.4)

d) Cumulative differential

cash flow

S

S

20


21


FOCUS: environment

The environmental impact is assessed by quantifying prevented CO emissions. In 2

this paper the latter were calculated by considering the contributions with respect to

the following factors:

1. Transport from wet pomace collection centre to treatment centre (drying, depitting,

pelletizing facility or CHP plant);

2. Type of facility installed to treat pomace;

3. Transport from pomace treatment centre (drying, pelletizing or depitting facility - if

any) or from depleted pomace collection centres (pomace oil refinery) to end

user(s);

4. Heat generator at end user(s).

Concerning point 1):

i. The number of kilometres is calculated between the wet pomace collection cen-

tre and the treatment centre;

ii. The calculation is extended to n collection points;

iii. After defining total kilometres, this is associated to the amount of wet pomace to

transport;

Drying plant at a pomace refinery

in Crete (Greece)

22


iv. Determine the most suitable type of vehicle for transport (size and load capa-

city), type of fuel (generally diesel) and then the number of trips or vehicles

necessary to transport the amount of pomace mentioned under point iii);

v. Considering the type of route, the average speed is estimated since CO emis-2

sions depend on the load amount, distance and time (speed).

Concerning point 2) there are 2 cases that should be distinguished:

2.1) Pomace drying unit.

i. The maximum electrical power absorbed by components from the grid is calculated;

ii. That electrical power is converted into energy used based on the days the unit is

in operation per year and the hours the unit is in operation per day; the related

Co emissions of the electrical power generated by fossil fuels are calculated;2

iii. An estimate is made on the equivalent amount of natural gas needed to produce

the heat requirements for drying the wet pomace.

2.2 ) Pelletizing unit

The steps listed above are repeated with the exception that it is necessary to indicate

the electrical power absorbed by special components for pelletizing units that

incorporate a section for drying wet pomace.

2.3) CHP plant

Once the CHP plant size is known, on the basis of the related thermal and electrical

power i twill be possible to calculate the quantity of methane equivalent needed to

produce the same power through 2 different plants (one thermal and one electrical). 2The CO quantity generated by the methane in he CHP plant (a saving in itself already)

must be decreased by the CO quantity generated by the electrical energy purchased 2

by the grid.

Concerning point 3), once again there are 2 cases:

3.1 Pelletizing unit:

i. The amount of pellets to be transported is estimated;

ii. Determine the most suitable type of vehicle for transport (size and load capacity),

type of fuel (gene-rally diesel) and then the number of trips or vehicles necessary

to transport the amount of pellets men-tioned under point i.);

23


Historic olive press

iii. Considering the type of route, the average speed is estimated since CO emis-2


3.2 Drying unit:

i. The number of kilometres is calculated between the wet pomace drying facility

and end user heat generators;

ii. The calculation is extended to n users;

iii. After defining total kilometres, this is associated to the amount of dry pomace to

transport;

iv. Determine the most suitable type of vehicle for transport (size and load capacity),

type of fuel (generally diesel) and then the number of trips or vehicles necessary

to transport the amount of pomace mentioned under point iii);

v. Considering the type of route, the average speed is estimated since CO emis-2


Concerning point 4):

i. The pellet and/or dry pomace burning boiler is determined to satisfy the heating

needs of user(s);

ii. An assessment is made to determine the natural gas boiler able to guarantee the

heating amount calculated above; considering the higher average performance 3of this type of boiler compared to those burning non-fossil fuels, m of natural gas

necessary to provide the same primary heat energy is calculated;

iii. The CO emissions associated to burning natural gas (from point ii.) is calcu-2

lated; iv. This value is included in the equation to determine CO in terms of 2

emissions prevented.

Thus, the total balance is composed of four terms functionally related to the following

formula:

CO tot = A +A +A -A +A2 1 2 3 4 5

Where:

CO tot = emissioni di CO emissions [kg/year];2 2

A = CO related to transport of wet pomace from production units (olive oil mills/po-1 2

mace refineries) to the treatment facility (pelletizer/dried/CHP);

A = CO related to transport of dry pomace to end users (where A and A are absent);2 2 3 5

A = CO related to transport of pellets to end users (where A and A are absent);3 2 2 5

A = CO related to the equivalent natural gas boiler replaced with a pellet or dry poma-4 2

ce boiler;

A = CO elated to the thermal and electrical power generated by the CHP plant deduc-5 2

ted of the electricity needed by the plant components and derived by the grid.

24


Storage silo feeding system

25

The positive effects from using pellet or pomace-burning boilers are further shown by

the considerable reduction in CO emissions where they replace boilers burning 2

diesel, which is a fuel that is much more polluting than natural gas, but still commonly

used at facilities, often large, especially for old buildings.The quantification is made

by following this procedure, in many parts the same as point 4 above:

i. The pellet and/or dry pomace burning boiler is determined to satisfy the heating

needs of user(s);

ii. An assessment is made to determine the diesel-fired boiler able to guarantee the

heating amount calculated above; considering the average performance of this

type of boiler, the number of litres of diesel needed to provide the same primary

heat energy is calculated;

iii. The CO emissions associated to burning diesel (from point ii.) is calculated.2

iv. This value is included in the equation to determine CO in terms of emissions 2

prevented.


Auger conveying pit or pomace into the silo

4.1 Sheets concerning Step 1 Context Analysis

SCENARIO SURVEY Sheet

! Outline the history concerning pomace exploitation .

! Describe the current innovative biomass exploitation initiatives in reference

contexts (national, European, etc.) about which it is possible to find data and

information.

! Report examples concerning pomace use as alternative fuel (eg.: market

penetration, trend, availability level and business channels, current life cycle

phase, etc.).

! Supply information about pomace characteristics (eg.: chemical and physical

features, calorific power, polluted emissions, etc.) and compare with other fuels.

SUPPLY ANALYSIS Sheet

! Carry out the geographical identification and delimitation of the project reference

territory.

! Supply a description of the reference territory (eg.: extension, orography, agricultural

surfaces used for the olive growing, possible changes in progress in the agricultural

destination of use).

! Point out the olive production (in tons) measured in a particular period of time (about

at least a decade) in the reference territory, possibly divided by areas, as exemplified

in the table 6.

26

4. Technical sheets

Pellets

Table 6

! Point out annual pomace production (in tons) measured in a particular period of time

(about at least a decade) in the reference territory as exemplified in the table

displayed hereunder.

Table 7: Example

Pomace production in Liguria (values in 100 Kgs)

! Carry out the produced pomace estimate (in tons) in the reference territory and the

available quantity for energy purposes in % the production total, as exemplified in the

table 8. 27

4. Technical sheets

Average value

MIN value

MAX value

Period

from the year x

to the year x+n

Area 2 Area 3 Area 4 TotalArea 1

1990/91

1991/92

1992/93

1993/94

1994/95

1995/96

1996/97

1997/98

1998/99

1999/00

2000/01

2001/02

2002/03

2003/04

2004/05

average

%

Province

Genoa

Year

-

51,113

19,725

15,718

39,468

15,606

36,423

8,015

35,559

8,565

17,895

4,662

38,821

3,213

-

22,676

21.4

8,908

49,322

49,990

35,469

57,053

53,046

54,334

24,393

87,663

23,908

83,942

21,514

94,443

32,425

66,784

49,546

46.8

4,534

27,123

9,814

7,234

23,428 2

11,903

20,340

12,909

18,983

16,405

14,179

10,700

26,042

6,209

26,625

15,762

14.9

3,883

42,522

13,167

20,614

24,163 2

20,003

27,614

8,838

33,012

9,650

23,980

9,236

34,640

11,038

29,911

20,818

19.7

17,325

170,080

92,696

79,035

144,112

100,558

138,711

54,155

175,217

58,528

139,996

46,112

193,946

52,885

123,320

108,028

100.0

Province

Imperia

Province

La Spezia

Province

Savona

Total Liguria

Region

Table 8

! Make forecasts, or predict the future data points of a time series in order to test

hypotheses or to model dependent relationships by means of linear regression

models.

! Measure the average pomace disposal costs paid by the mills or, in some cases, the

selling price for the recovery of the "small core", a pomace component used for

energy purposes.

! Define the seasonal character of pomace production and the availability periods,

even as a function of the treatment time necessary (if needed).

! Identify the benefits for the local entities which can join a pomace-energy production

chain and for the other stakeholders of the initiative.

OPPORTUNITIES AND THREATS ANALYSIS Sheet

! Identify the existence of technical (eg.:

provisioning difficulties), technological

(eg.: some low component reliability),

business (eg.: weak tendency towards the

consumption of alternative fuels),

prescriptive (eg.: restriction on using

pomace as fuel), cultural (eg.: feeble

sensitivity to the environmental topics)

threats or of other nature related to the

innovative use of pomace as fuel and

listed in a table of comparison with the

opportunities identified hereunder, as

exemplified in the following table.

528

Estimated virgin pomace quantity which

is available in the energy market

Virgin pomace production in the area x

Estimated total pomace production % value

which is available in theenergy market

(Tons per year) (Tons per year)

4. Technical sheets

Storage silo

! Identify the existence of technical (eg.: easy provisioning), technological (eg.: high

reliability of some components) business (eg.: strong inclination to use alternative

fuels), prescriptive (eg.: limits very favourable to use pomace as fuel), cultural

opportunities or other nature related to the innovative use of pomace as energy

vector and which can be listed in a comparison table with the previously identified

threats, as exemplified in the following table.

Table 9:

Example

29

+ Normative changes

+ Unpredictable weather conditions

affecting annual production of

pomace.

+ ...

Opportunities

+ Technology for pomace exploitation is

mature and is already being imple-

mented in

+ some scale

+ Possibility to gain green certificates for

renewable energy

+ Savings deriving from avoided waste

disposal procedures

Threats

4. Technical sheets

30

4.2 Sheets concerning Step 2 Current and foreseen demand analysis

CURRENT AND PROSPECTIVE DEMAND ANALYSIS Sheet

! As concerns the territories where the product is greatly widespread (extra-regional,

national, European, etc.), define the annual quantities of pomace required by the energy

market in the last period (in tons), supplying also the relevant historic trend.

! If, in the reference territory there is already a pomace market for energy purposes,

supply the data concerning the annual quantities (in tons) required by the market in the

latest period and the relevant historic trend.

! Estimate the foreseen demand of pomace for energy purposes, even in terms of annual

mean percentage variation. To this concern it is possible to make reference to the

provisional trend, above all in lack of market data, of other biomass typologies.

! Remark the seasonal character of the energy product exploitation, if any, finding

business absorption peaks.

! find and enumerate the potential customer typology to refer the consumption of pomace

as fuel - Public or private bodies (domestic or industrial entities).

! detect or estimate the plant number (heat generators) owned by the Public Bodies as

potential users of pomace/pellets/pits and identify their localisation as well as the areas

where there is the greatest concentration. It is necessary to underline how Public Bodies

have a strategic role in the livening up of an alternative energy market in case that this is

not yet in the mature phase.

4. Technical sheets

Olive pit separator

531

4. Technical sheets

4.3 Sheet concerning Step 3 Technology Analysis

TECHNOLOGY ANALYSIS

Supply information about the innovativeness and the efficiency level achieved by the

technology to be used for the use/transformation of pomace.

! Describe the working process articulating it in steps. It is necessary, for this purpose,

to make use of a graph representing the functional scheme.

! Point out the technical characteristics of the plants (if needed) transforming pomace

in an energy product (e.g. dried pomace, depitting) -describing their dimensioning,

main components, production capacities in tons per hour, energy consumption, the

absorbed electric and calorific power, etc.- and of the plants (boiler, CHP,

gasification) needed to produce final energy out of the pomace.

+ For cogeneration plants, assess the best technology for combined electric and

thermal energy production (gas or steam motor cycles) starting from virgin pomace

(implementing any gasification processes) on the basis of the needed power and

involved distances. The latter aspect, even for simple small-medium size biomass

heating plants (500kW-2MW) is essential in order to assess financial burdens related

to installing a completely new district heating network or upgrading an existing one.

In case the choice falls onto a pelletizing plant the final pellet fuelled plant is not so key

to the technical-economical analysis because the related costs are born by final users

and depend on their personal evaluations which do not affect the overall economic

plan of the supply chain. In this case it is only necessary to describe the pelletizing

facility and the produced pellet (e.g., if compliant with UNI/TS 11263:2007 norms).

DRIER

+

32

4. Technical sheets

! For each plant in the chain it is necessary to:

+ Identify the average purchase cost, yearly average operating cost, yearly

maintenance cost, as well as the life-span (in years) of the technology for treating

the pomace (if needed).

+ Identify the primary manufacturers and distributors on the market of the involved

technology.

+ When choosing the technology it is important to take into consideration whether it

has been sufficiently tested on the market, ensuring its reliability and verifying

whether the provider/distributor is able to carry out timely on-site maintenance and

that users' manuals are available in the user's language.

+ Prior estimates should also be made on costs for spare parts and maintenance.

+ Once the technology is identified, taking into consideration the raw material

quantities available and the final users location, identify the nr of energy plants and

their articulation (concentrated or distributed).

+ Lastly, it is also necessary to take into consideration the fact that the seasonal

nature of olive pomace production, typical of some areas, means that transfor-

mation operations are concentrated in a certain period of the year Thus, affecting

the size of the pomace drying/pelletising/CHP facility.

Pit fuelled stove

4.4 Sheet concerning Step 4 Project alternative identification

IDENTIFICATION of PROJECT ALTERNATIVES Sheet

! A segmentation of the potential demand in the reference territory is needed,

subdividing:

+ The market by customer typologies (data collected in the "Current and foreseen

demand analysis" sheet of Step 2), according to their relevant characteristics such

as, for example, nature (public bodies, companies, families), consumption level

(high, medium and low energy consumption levels or a more technically defined

articulation), purchase purposes (final user or business intermediaries treating

energy products), etc.;

+ The product available (eg. dried/depleted pomace) or which can be obtained by

the processes of transformation in alternative fuel (eg.: dried pomace, pellet, pit),

according to their characteristics such as, for example, easiness of use, stocking,

energy output, etc. .

! Creation of a segmentation matrix to show the demand obtained from the

combinations generated by crossing product and market characteristics. To this

concern it is possible to use the following indicative table.

Table 10

Example: segmentation matrix in Liguria

Production procedure to process pomace

Drying Drying and pelletization

Customer typology

Households (that use biomass to produce thermal energy)

Companies which do not need much energy

(that use biomass to produce thermal energy)Companies which use a lot of energy

(that use biomass to produce thermal/electric energy) Commercial agents

Public Bodies(that use biomass to produce thermal/electric energy 33

4. Technical sheets

! Among the delineated segments, identify the targets, i.e. those who can be subjects

of a business strategy.

! The choice of the target segments defines one or more possible technical-

managerial solutions: for each of them identify the reason leading to the choice of

that segment/s.

! For each management solution, identify the benefits by customer typology and, as

second step, for the other stakeholders concerned by the chosen strategy, as

exemplified in the following table.

Table 11

Example

4.5 Sheets concerning Step 5 Alternatives analysis and evaluation

PRODUCTION CHAIN MODEL Sheet

! Complying with the chosen technical-management solution, identify and describe the

private market operators needed to create the pomace-energy production chain.

! Define the relationships among the different stakeholders composing that production

chains (these descriptions can be better supported with the contribution of a diagram).

OLIVE MILLPROCESSING CENTRE

OF POMACECUSTOMERS PUBLIC

ADMINISTRAT.

34

4. Technical sheets

MONEY MONEY

VIRGIN POMACE

DRIED POMACE

Target customers Energetic

vector

Benefits Further

benefits

! Reduction of energy costs! Improvement of public

image! Reduction of energy

costs

! Reduction of energy costs! Improvement of public

image! Expansion of market

opportunities (increase in sales)! Improvement of the

corporate image

! Improvement of environmental quality (less emission of pollutants in the atmosphere) ! Improvement in the balance

of payments due to a reduced dependence on hydro-carbons! Research incentive! Development in the energy

sector and in the technology connected to it! New jobs

Public Authorities (that use biomass to produce thermal/electrical energy)Private users (of biomass to produce thermal/electrical energy)Companies (users of biomass for the production of thermal/electrical energySales agents

! Dried pomace! Pomace pellets

! Pomace pellets

OWNERSHIP STRUCTURE Sheet

! Identify the possible stakeholders participating in the ownership of pomace

use/transformation structure (in its whole or for single production steps:

transformation, energy plant, district heating plant, …), supplying their description

and the reasons for their participation.

! Indicate the best legal form which the new structure shall take, considering the nature

of the participating subjects and, in any case, complying with the different national

relevant laws (company law). The possible presence of public entities in the

ownership structure shall be greatly desirable if the initiative shows a high level of

innovation and return. In the case of ownership composed by one or more public

entities it is possible to create a consortium company structure, Non-profit companies

(owned for example by municipalities) without excluding in any case the adoption of

more typically private legal forms (for ex.: Limited Liability Companies or Joint-stock

Companies), more frequently used in the case of the exclusive presence of private

market operators belonging, in the specific case, to the olive oil or energy sectors.

! Define the shareholding of each subject.

35

4. Technical sheets

Pomace fuelled stove

ORGANISATION CHARACTERISTICS Sheet

! Describe the organisation structure which can be taken by the new business

venture, identifying the different company functions in which the company activities

are articulated, defining those carried out internally and those charged to third

parties, to this concern and as an example, use the following table to determine, for

each function, the related responsibilities.

! Define the company staff by detailing the roles necessary to the project imple-

mentation. Describe, for each single role, the tasks and responsibilities covered in

the project.

! It can be useful to supply a picture of the organisation structure by using an orga-

nisation chart.

! Remark that the seasonal nature of olive pomace, where it occurs, implies that the

company staff remains unused for a period. This problem can be faced by

differentiating the range of energy products, the company structure, using different

technology for example, to produce pellets, wood chips, … Another solution could be

the outsourcing of whole organisation processes, meaning that personnel can be

supplied by companies which are simultaneously active in different initiatives. In the

Italian context, for example, this outsourcing opportunity can be identified in the social

cooperative field, particularly inclined to the supply of specialised work service with a

limited duration.

36

4. Technical sheets

Strategic managementMarketingProductionSupply chain logisticsDistribution logisticsAdministration.............

Functional area Person in charge

Table 12

Example

AREA AND LOGISTIC ASPECTS Sheets

! Describe the logistic chain necessary for the industrial PROCESS to function, by

schematically representing it in a graph.

! Describe the plants location, by explaining the choice.

! Supply information concerning the main transportation road infrastructures in the

project area and their use.

! By means of a map, define the location of the supply centres as well as of the

customers' energy plants, defining maximum distance affordable by the company in

terms of distance from the project location.

! Show the distances (in km) and the times (in minutes) existing from the project

location to the virgin pomace collection point.

! Point out the virgin pomace loading and transportation costs from the collection to

the treatment centres (if any).

! Show the distances (in km) and the time period (in minutes) existing from the project

location to the different customer locations.

! Point out the unloading and transportation costs of virgin pomace from the treatment

to the customers' locations.

! Estimate the area surface (in sqm) necessary for the pomace treatment activity.

! Subdivide the area in functional spaces (eg.: stocking, plant, weighing, general

services, etc.) detailing the surfaces (in sqm).

! Consider that the seasonal factor of olive pomace production (if it occurs), and so,

the availability of a high amount of the product at a certain time of the year,

necessarily entails a greater stocking capacity with respect to a production without

seasonal effects. It arises, therefore, the necessity to face greater investment and

management costs with respect to other energy production typologies.

! In case of pomace use in heating plants, CHP plants or in other energy plants,

assess the availability of areas/buildings where to

install the plants and stock the raw material and the

related costs.

37

4. Technical sheets

16 MW power plant fuelled with depleted pomace(Province of Jaen, Spain)

ECONOMIC-FINANCIAL EVALUATION Sheet / VALUE ANALYSIS

! Define the assessment model inputs: Revenues, Operating and Investment Costs,

the latter divided into direct and indirect costs, as well as the considered time period

for the assessment (Year 1 - Year n), time representing the technology life duration. -

For each input category, introduce in a suitable table the values relevant to the most

significant years.

! For each production step (pellet production or pomace drying or pomace burning in

heating plants, or CHP plants or gasification) it will be necessary to estimate the related

investment (on which it will be possible to calculate the depreciation) in these terms:

+ pomace treatment plant cost (comprising drying plant and possible pelletising plant,

or depitting plant, warehouse and stocking areas for pomace and pellet) - this cost

will not be considered if dried/depleted pomace is already available on the market

+ Energy production plant cost (boiler, CHP, gasifier) with its civil works (areas or

buildings necessary to host the plant and stock the fuel) - in case the plant is

meant to substitute a fossil fuel plant, the cost to be considered is the difference

between the biomass plant and the fossil fuel plant - in case the project only

foresees pelletising, this cost is not to be considered.

!

38

4. Technical sheets

Final olive separation

! Operating costs are determined on the basis of the parameters that are listed in the

following table

Table 13

Operating costs

DescriptionUsed parameters Values

a) Virgin pomace

b) Logistics

c) Direct work

d) Unforeseen costse) Electric powerf) Plant maintenance

(pomace transformation plant)f) Plant maintenance

(energy production plant)

g) Depreciations

h) Rent

i) Indirect work

l) General costs

b1) Transport

for virgin pomace purchase

b2) Transport for

energetic vector

distribution (eg.: dried pomace)

Unit cost to buy per kgVirgin pomace in kg

Virgin pomace in Tons.Loading and unloading cost per Tons.

Transport cost per Tons./km

Mid-distance for the suppliesMax distance for the supplies

Fuel (eg.: dried pomace) in Tons.Loading/unloading cost per Tons.Transportation cost per Tons./km

Mid-distance for the distributionMax distance for the distributionc)

Daily costs

Working days in a yearEmployed for the management of the plant

Percentage of the direct costsFix pricePeriod Year 1÷x: percentage plant cost

Period Years x+1÷n: percentage plant costPeriod Year 1÷x: percentage plant cost

Period Years x+1÷n: percentage plant cost

Plant cost / years of useful lifeFurnishing and tools: cost / years of useful life

Expenditure of construction: cost / years of useful life

Covered surface in square metresRent cost in square metres

Daily costsWorking days in a yearEmployed for the management of the plant

Period years 1÷x: fixed pricePeriod years x+1÷n: fixed price

39

4. Technical sheets

40

4. Technical sheets

Table 14

! If the chosen production process foresees the distribution of dried pomace, pellet or pit

on the market, in case there is no available market price, it is necessary to calculate

the price by means of the "direct cost" methodology which implies the definition of an

operating revenue objective able to sustain the venture. The price so determined has

to be competitive with other fuels already available on the local market.

Operating costs (values in €)Description Total Year 1 Year 2 Year n

a) Virgin pomace

b) Logistic costs (transport for the supply of virgin pomace and distribution of the energy vector)c) Cost of direct work

d) Unforeseen costse) Direct production costs ( a÷d)

f) Electrical energy

g) Drying Plant maintenanceh) Energy plant maintenancei) Depreciationsl) Rent

m) Indirect work costn) General costs

o) Indirect costs ( f÷m)

p) Total operating cost (e+n)(*)

S

S

(*) cost related to dried pomace or pit in case they are sold on the market; otherwise, cost of the heat or of the electricity produced

and sold on the market

Revenues (values in €)


a) Biomass vector in kg (eg.: dried pomace)

b) Selling price per kgc) Revenues (a*b)

Investment costs (values in €)


a) Transformation plantb) Furnishing and tools

c) Price of building

d) Total investment cost ( a÷c)S

Table 15

Table 16

! Calculate the operational revenue using the table displayed hereunder and describe

its trend in the considered time period, pointing out the values relevant to the

particularly significant years (eg.: beginning of a stability period, strong increases or

decreases). The Operating revenue represents result of the new venture mana-

gement.

Table 17

! Calculate the Operating Cash Flow using the following table. The Operating Cash

Flow enables to verify or not the capacity of the initiative to self-finance itself through

the management of its activities and remunerate the invested capital. The table

displays the values relevant to the particularly significant years for the management

trend.

Table 18

! Relatively to the exploitation of alternative fuels, identify the investment and

management costs concerning the different boiler typologies, in order to determine,

inserting them in a suitable table, the NPV and IRR sustainability indicators, to join to

the Differential Cash Flow so as to obtain a better possibility of comparison among

the analysed fuels.

Net Operating revenue (values in €)


a) Net revenueb) Direct production costs

(fuel or energy)c) Contribution margin (a-b)

d) Indirect costs

e) Net Operating revenue (c-d)

Operating Cash Flow (values in €)


a) Net Operating income

b) Taxes on net Operating income

c) Depreciationsd) Cash-Flow (a-b+c)

e) Fixed Investmentsf) Operating Cash Flow (d-e)g) Cumulative Operating Cash Flow

41

4. Technical sheets

42

4. Technical sheets

Table 19

! Through the Operating Cash Flow carry out a synthesis evaluation of the initiative

sustainability through the calculation of the 2 indicators, the NPV (Net Production

Value) and the IRR (Inner Return Rate), displayed in the table 20 and in which the

obtained values are compared with those which can be defined as acceptance

thresholds (5% or WACC). As concerns the accepted value relevant to the IRR, it is

possible to use two values according to the different possibility of financing the project

initiative. 5% is a conventional value generally used when the financing sources are

totally public, while the WACC, i.e. Weighted Average Cost of Capital, is adopted when

the financing sources derive from private capitals (such as the owner's capital and/or

financial markets loans).

Differential cash flowDescription Total Year 1 Year 2 Year n

a) XXX (fossil fuel type)

boiler situationa.1) Cost of buying the boilera.2) Annual maintenance cost

a.3) Annual fuel costa.4) XXX boiler situation cash flow.

( a.1÷a.3)

b) Boiler situation with fuel deriving from the pomace (eg.: dried pomace)

b,1) Cost of buying boilerb.2) Annual maintenance costb.3) Annual fuel cost

b.4) Dried pomace situation cash flow ( b.1÷b.3)

c) Differential cash flow (b.4-a.4)

d) Cumulated differential cash flow

S

S

Olive trees in Jaen (Spain)

Table 20

! Elaborate the initiative financial statement by using the table displayed hereunder. It

represents the origins and destinations of the financial resources necessary to the

realisation of the project initiative and its management during the considered time

period. Input in the table the values concerning the years significant for the

management trend.

Table 21

! Elaborate the provisional profit and loss account of the new business venture

complying with the following table.

Table 22

43

Financial statement (values in €)


a) Net cash flowb) Financial charges

c) Reimbursement loans

d) Reimbursement equitye) Total outflows/inflows (a-b-c-d)

f) Equityg) Long term debth) Short term loans

i) Total source of financing (f+g+h)l) trend of Bank account balance

Profit and loss account (Values in €)


a) Net revenueb) Direct production cost

(fuel or energy)c) Contribution margin (a-b)d) Fixed costs

e) Net Operating income (c-d)f) Interest expense

g) Income before taxes (e-f)

h) Tax expensei) Net income (g-h)

4. Technical sheets

Indicator for project feasibility Obtained value Accepted value

NPV

IRR

> 0

5% o WACC

44

4. Technical sheets

ECONOMIC-FINANCING ASSESSMENT Sheet

BALANCE POINT ANALYSIS

! Calculate the value concerning the sales and the break even point, as well as the

relevant safety margin concerning some significant operations in the assessed time

period, as shown in the following table.

Table 23

Example

ECONOMIC-FINANCING ASSESSMENT Sheet

EFFECTS OF THE PUBLIC FINANCING

! Detect the institutional measures for financing support which it is possible to refer to

at the moment of assessment, supplying a description of their characteristics.

! Determine the main effects produced by the identified public financing lines and

delineate a synthesis framework through the comparison table n° 24 in which the

solution using public financing is compared to the one without that support.

Description Year x Year y

Estimated salesBreak even point of salesEstimated quantity of product

Break even point of productSafety margin

Pit heated poolin Carzola (Spain)

260,550.00 €216,300.00 €

1,178,931.00 kg

978,733.00 kg20.00%

260,550.00 €236,250.00 €

1,178,931.00 kg1,069,004.00 kg

10.00%

Table 24

ECONOMIC-FINANCIAL ASSESSMENT Sheet

THE COSTS FOR THE CUSTOMER

! Point out the investment costs which must be faced by the customer to use the new

energy fuel. A table could display the pomace boiler average power and the related

purchase value.

Table 25

Example

Considered project variables

a) Sources of financing a.1) Equity a.2) Long term loans

a.3) Capital grants a.4) Short term loansb) WACC

c) Feasibility indicators c.1) NPV

c.2) IRR

d) Investment costse) economic results at normality year

e.1) Revenues e.2) Operating costs e.3) Operating income

e.4) Net cash flowf) Pomace unit price

f.1) Period: Year 1- Year x

f.2) Period: Year x+1 - Year n

Hypothesis

without public financing

Comparison

Difference %Hypothesis

with public financing

Customer

Boiler fuelled

by dried pomace

(kW)

New boilerpurchase cost

(€)

Public Bodies

500

600

700

200,000.00

240,000.00

280,000.00

45

4. Technical sheets

46

Focus on: Best practices

BIOMASA PUENTE GENIL, Puente Genil (Córdoba)

! The biomass plant (figure below) generates electricity from olive pomace (orujillo) in

Córdoba, the technology used is the vapour cycle.

! The electrical power is 9.7 MW that is produced by means of steam turbine.

! The consumption of biomass is 71,000 tons/year.

47

DISTRICT HEATING ARNASCO, LIGURIA, ARNASCO (ITALY)

! DISTRICT HEATING ARNASCO is a small district heating system running with olive

pit separated at source by the local cooperative olive mill.

! The district heating is made of a pit fuelled high temperature 69.8 kW boiler and a 60

meters pipeline. 3

! Quantity of nut used each year is 14.3 tons to heat up 700 m (Church and annexed

building).

! Total cost of plant: € 9,500.

www.moreintelligentenergy.eu

The sole responsibility for the content of this documet lies with the authors. It does not necessarily reflect the opinion of the European Communities.The European Commission is not responsible for any use that may be made of the information contained therein.

Via XX Settembre 41 - 16121 Genova, Italy

T. +39 010 548 8730 - Fax +39 010 570 0490

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57001 thermi, Greece

T. +30 2 310463930


C/ Paseo de la Estación 10, 7°A - 23003

Jaén, Espana

T. +34 953 294750


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T. +385 52 408 332


Garibaldijeva 1 6000 Koper, Slovenia

T. +38 6 5 663 77 13


Via Garibaldi, 4 - 1° piano - 16124 Genova, Italy

T. +39 010 270 4251/296 - Fax +39 010 270 4296


MORE - Market of Olive Residues

for Energy - is funded by the EU

Programme “Intelligent Energy

for Europa” (IEE)

The main objective of "M.O.R.E." is to generate renewable energy using solid residues

(pomace) deriving from olive oil production process. The project involves 5 European

countries (the main world olive oil producers): Italy, Spain, Greece, Croatia and Slovenia, by

means of six different local organizations that make up the partnership. In Italy, two partners

are involved: the project leader - Liguria regional agency for energy, ARE Liguria - and the

regional association of the four Ligurian Chambers of Commerce - Unioncamere Liguria.

In Croatia the partner is IPTPO, the Institute for Agriculture and Tourism

In Greece the partner is the Regional Agency for Energy of Central Macedonia

In Slovenia the partner is the Science and Research Centre in Koper

In Spain the partner is AGENER, the Agency for Energy Management of Jean province.

Running from November 2007 to April 2010, the project MORE aimed to:

! Identify different methodologies to generate renewable energy using solid olive residues

and produce related guidelines;

! Involve public and private stakeholders to develop the local markets and create supply

chains;

! Carry out training and promotional activities;

! Define business plans for energy facilities running on olive solid residues;

! Deliver policy recommendations for local, national, EU governments.

Full documents on: www.moreintelligentenergy.eu

The IEE Project "M.O.R.E.: MARKET of OLIVE RESIDUES for ENERGY"

olive oil 13 05 10

Documents

tons of olive pomace

exhausted pomace

olive stone

olive mills

depleted pomace

olive oil extraction

pomace oil refineries

olive pulp skin