the role of small-scale power generation based on solid fuels in developing countries

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The Role of Small-scale Power Generation Based on Solid Fuels in Developing Countries KURT GOLDSMITH 9 The Mall, East Sheen, London SW14 7EN, UK 1. INTRODUCTION Economic progress is not evenly spread over the territory of developing countries. A few urban and industrial centres have absorbed the major share of the development effort. leaving outlying areas well behind, often at no more than subsist- ence level. This diverse and dcccntralized de- velopment pattern is reflected very clearly in the structure of the electricity supply sector which plays such a vital role in the development process. The economically advanced centres benefit from supply conditions approaching those of the indus- trialized world; power plants arc as large as the power system will allow and the electrical net- works are as dense as the load conditions require. The situation is radically different in the outlying and isolated and usually economically retarded areas. Electricity demands are small and dis- persed. Electricity supply, where it exists at all, has to rely on small power plants or long transmission lines: both of which are inherently expensive because of their scale in relation to the amount of power they handle. The approach to electricity supply development under these conditions demands utmost care in the selection of energy sources for conversion into electricity and in the conception of the power plants, especially because the small scale of the facilities involved, tends to lead to relatively high costs per unit of capacity installed and per unit of energy generated. Where local cnergy resources are suitable for exploitation on a small scale, they are usually in the form of hydropower or solid fuels. Small-scale production of oil or gas is an unlikely option at present. The renewables, principally sun and wind power, arc potentially of interest but have not yet progressed far beyond the development stage. Where an exploitable hydropower source is available sufficiently close to the potential de- mand centres, it will generally have the advantage over other energy sources, but locally-produced solid fuels may then still have a role to play, in preference to imported fuels, for firming up or complementing a variable hydro output. It should be borne in mind that the range of solid fuels suitable for combustion in thermal power plants is quite large and the variation in the quality of the fuel, even for a single given type, can be very considerable. This poses significant design problems for the fuel handling and com- bustion systems and can lead to operational and maintenance difficulties with which developing countries with their restricted technological re- sources may not find easy to cope. The problems and difficulties tend to be accentuated in small plants which do not allow the same technological effort to be brought to bear on their design as larger power units now in common use in central stations. The reason is that, because the smaller plants are inherently more expensive per kilowatt installed, the margin available for peripheral expenditure on their development and design is greatly restricted. All of these matters justify a detailed and Kurt Goldsmith 1,s u Consulranr for the Natural Resourci>s and Energy Divirion, Depar/men/ oJ Technical Co-operation for Development. United Narions. New York. The vicws cxprcsscd in this paper are those of the author and do not necessarily reflect the views of the United Nations. Natural Resources ForumQ Unitcd Nations, New York, 1987 285

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The Role of Small-scale Power Generation Based on Solid Fuels in Developing Countries

KURT GOLDSMITH 9 The Mall, East Sheen, London SW14 7EN, UK

1. INTRODUCTION

Economic progress is not evenly spread over the territory of developing countries. A few urban and industrial centres have absorbed the major share of the development effort. leaving outlying areas well behind, often at no more than subsist- ence level. This diverse and dcccntralized de- velopment pattern is reflected very clearly in the structure of the electricity supply sector which plays such a vital role in the development process. The economically advanced centres benefit from supply conditions approaching those of the indus- trialized world; power plants arc as large as the power system will allow and the electrical net- works are as dense as the load conditions require. The situation is radically different in the outlying and isolated and usually economically retarded areas. Electricity demands are small and dis- persed. Electricity supply, where it exists at all, has to rely on small power plants or long transmission lines: both of which are inherently expensive because of their scale in relation to the amount of power they handle.

The approach to electricity supply development under these conditions demands utmost care in the selection of energy sources for conversion into electricity and in the conception of the power plants, especially because the small scale of the facilities involved, tends to lead to relatively high costs per unit of capacity installed and per unit of energy generated.

Where local cnergy resources are suitable for

exploitation on a small scale, they are usually in the form of hydropower or solid fuels. Small-scale production of oil or gas is an unlikely option at present. The renewables, principally sun and wind power, arc potentially of interest but have not yet progressed far beyond the development stage. Where an exploitable hydropower source is available sufficiently close to the potential de- mand centres, it will generally have the advantage over other energy sources, but locally-produced solid fuels may then still have a role to play, in preference to imported fuels, for firming up or complementing a variable hydro output.

It should be borne in mind that the range of solid fuels suitable for combustion in thermal power plants is quite large and the variation in the quality of the fuel, even for a single given type, can be very considerable. This poses significant design problems for the fuel handling and com- bustion systems and can lead to operational and maintenance difficulties with which developing countries with their restricted technological re- sources may not find easy to cope. The problems and difficulties tend to be accentuated in small plants which do not allow the same technological effort to be brought to bear on their design as larger power units now in common use in central stations. The reason is that, because the smaller plants are inherently more expensive per kilowatt installed, the margin available for peripheral expenditure on their development and design is greatly restricted.

All of these matters justify a detailed and

Kurt Goldsmith 1,s u Consulranr for the Natural Resourci>s and Energy Divirion, Depar/men/ oJ Technical Co-operation for Development. United Narions. New York. The vicws cxprcsscd in this paper are those of the author and do not necessarily reflect the views of the United Nations.

Natural Resources F o r u m Q Unitcd Nations, New York, 1987

285

286 K. GOLDSMITH NRF VOL. 11, NO. 3, 1987

searching revicw, with the objective of providing guidance to both power plant suppliers and users on thc best way of utilizing solid fuels on a small scale.

2. DEFINITION OF SCALE

It is important to define at the outset what might be meant by ‘small scale’. The size of a generating facility is usually determined by the power market that can be supplied from it. In an isolated locality the power market can be fairly clearly delineated. The market will increase, gencrally at a com- pound rate, with the more widespread and more intensive use of electricity, with the growth of population and with the greater inccntive induced by growth, to interconnect adjacent localities to form local networks supplied from key power plants in the area. One of the difficulties in determining the size of the market in the early stages of supply development is that a partial supply may already be available but may be inadequate. Part of the demand will then be suppressed, but the extent of the demand sup- pression will not be known until electricity has become available in adequate amounts and at prices which can encourage the local consumers to expand their consumption. Demand suppres- sion is normally caused by shortfalls in production and delivery of power, but it can also be caused by unduly high prices and occasionally by undue breakdown and interruptions of the supply.

Electricity demand estimates for remote loca- tions in developing countries vary widely, typical figures being of the order of 20 W per capita and 200-500 W per household. If allowance is made for the greater needs for electricity of small commercial and industrial enterprises and the consumption for public buildings and services, a demand of some 400-800 W per urban household can be reached; this might be translated into an initial demand of 100 W per capita in total. A town of 10,000 inhabitants in a tropical or subtropical environment could thus be expected to have an initial demand of about 1 MW, assuming it is fully electrified for the first time. This demand is likely to rise quite rapidly as the advantages of a rcgular supply of electricity become appreciated. The system load factor will also initially be low, perhaps only around 25-

30%, but it will increase quite quickly in step with the rise of demand. Energy consumption will, however, remain very sensitive to the cost of the supply because the price resilience of new con- sumers in transition from a subsistence economy is generally low.

On balance, there is no strictly lower limit for solid-fuel fired power generation, as indeed there is no lower limit for generation from hydrocarbon fuels. For practical purposcs the lower capacity limit for a station serving the public-say a mixed domestic, commercial and industrial commun- ity-might be set arbitrarily at 1 MW. Smaller plants may be treated as special cases.

The upper limit of the small-scale range is determined by the type of the fuel used and by the difficulties of its transport, handling and combus- tion. For fuels of high quality in terms of calorific value per unit of weight-anthracite, coal and even lignite-’small’ may be defincd as a size at the lower end of the unit ratings conventionally installed in central power stations. This lowcr rating has increased progressively over the past 40 years from 30 MW to perhaps 150 MW under the influence of standardization and the economies of scale.

For fuels of lower quality-refuse, wood and agricultural waste-a practical upper limit to thc unit size is set by the amount of combustible material that can be fed into the boiler system within a given time. A sizc limitation can be imposed anywhcre along the chain from fuel gathering to combustion, and is dependent mainly on the large volumes of the material involved. A small steam power station will typically consume, per megawatt-hour sent out:

Wood, agricultural waste or refuse (best case) in dry condition Refuse (worst case) Bituminous .coal Heavy fuel oil Fibrous materials in a ‘green’ condition will

increase the volumes required by 60-80% so that the amount of material that needs to be harvested and transported prior to drying will be about 4-4.5 m3 MWh-’ sent out. If 150 MW is accepted as the largest size for coal-fired plant warranting consideration under the term ‘small-scale’, a corresponding size for fibrous fuels would be of

1000 kg or 2.50 m3 2400 kg or 6.00 m3 450 kg or 0.33 m3 280 kg or 0.29 m3

NRF VOL. 1 1 , NO. 3,1987 SHORT NOTES 287

the order of 10-15 MW, but only as low as 7-9 MW for high-volume fuels of low calorific value such as some types of refuse. As a target figure, a 10 MW plant operating at 50% load factor will require a ‘green’ fuel supply of around 75,000 tonnes year-’.

3. FUEL CHARACTERISTICS

The considerable variability in the quality of solid fuels is compensated for by building power plants dedicated to one fuel type and allowing for some operational tolerance in the design so that reason- able variations in fuel composition can be accommodated. Combustion can also be stabil- ized with auxiliary oil firing which is normally available in coal-fired plants for start-up from cold.

The problem areas in the case of coal are not so much the calorific value, which is reasonably steady at 28,000-30,000 kJ kg-’ for a wide range of steaming coals, although it can fall to about 23,000 kJ kg-’ for the poorer qualities. Of more concern are the ash and sulphur contents; this can cause problems in combustion and when dealing with the waste products. Low-quality coal is generally associated with an ash content of 20% and more (by weight) compared with an ash content of 10% and less for high quality washed coal. Small-scale power plants intended for re- mote places are likely to have access primarily to relatively poor qualities of coal obtained from small local surface or drift mines. Oil for flame stabilization will be difficult to come by, and expensive. There is therefore an incentive to conceive the combustion system in the planning and design stages for permanent operation with poor-quality coals, even if some operational efficiency has to be sacrificed.

Lignite, with a calorific value of about 20,000 kJ kg-’, is a more difficult fuel on account of its high moisture and ash content. The combustion problems associated with lignite have, however, been largely solved satisfactorily, and the mate- rial is now a frequently used fuel. As in the case of low-quality coals, transportation from source to power plant needs to be minimized to ensure an economic fuel cycle. Lignite-fired plants are therefore sited as close as possible to the fuel source. The problem of entrained moisture is

more serious in the case of peat. With a ‘dry’ calorific value of only about half that of bitumi- nous coal-in the range of 14,000-15,000 kJ kg-’-and a moisture content which can exceed SO%, the quantities of raw peat needed for power generation can reach an order of magnitude of 2 tonnes MWh-’, or roughly four times the amount of bituminuous coal needed for the same output. This does not invalidate the use of peat in suitable cases, but the transportation, drying and combus- tion problems need careful study before a peat- fired scenario can be adopted under developing country conditions. Peat reclamation and hand- ling is relatively labour-intensive even though considerable strides have been made to mecha- nize this process with good effect.

Wood and agricultural waste (’biomass’) offer basically a good boiler fuel. The calorific value for this type of material in dry condition is generally of the same order of ma nitude as that of

up to +20% can be experienced, not only from species to species but also from sample to sample of the same species. This is an important point which the designer of the combustion system must bear in mind. Fibrous materials have the advan- tage of low sulphur and ash content, although the volatility of the ash can cause problems, as indeed it does with lignite and peat. On the other hand, the high moisture content of the material har- vested in the ‘green’ state, which can exceed 70%, is fairly difficult to dislodge. Uniform drying is not easily achieved and the combustion of mate- rial containing pockets of entrained moisture sometimes proceeds in an explosive way in the boiler; the equipment designer and the user must be aware of this. Heat release tends generally to be more spontaneous than in the case of higher- quality fuels, and this demands care in the combustion arrangements to ensure that the released energy is properly captured.

The combustion of refuse serves the dual purpose of protection and improvement of the environment and of energy reclamation. Refuse is a difficult fuel because of its inherent variability, the often high moisture content, the entrainment of inert solids and the sometimes undesirable composition, especially of some types of plastic waste which can cause combustion problems. Industrialized countries produce around 400-500

peat-14,000-15,000 kJ kg- I g -but variations of

288 K. GOLDSMITH NRF VOL. 11, NO. 3,1987

kg of refuse per year and per capita; it is reasonable to assume that urban centres in developing countries will not fall far short of that level. Because collection and handling problems restrict the available quantities, refuse incinera- tion can be combined with power production on only a relatively small scale. In the developing world, therefore, energy rccovery from refuse collected in urban centres will involve power plant capacities at the lower end of the size range considered here. Refusc utilization in outlying areas will probably require very small power plant sizes unless the refuse can be upgraded by mixing it with other solid fuels which will also help to improve the combustion characteristics of the material. The calorific value of refuse can reach about thc same level a4 that of fibrous fuels at the top of the range (say 14,000-15,000 kJ kg-') but it can fall to less than half that figure at the lower end (6000-6500 kJ kg-'). Unless combustible refuse can be graded and mixed, considerable variations in the useful output of a refuse-fuelled plant must be expected. This means in practice that the amount of electricity generated is unlike- ly to be sufficiently firm to meet a given demand, but i t can nevertheless makc a useful contribution if pooled with other power sources in a combined network.

4. ECONOMIC ASPECTS

Every power scheme must be of adequate econo- mic merit if it is to attract financial support on whatever terms. Criteria for economic appraisal havc been laid down by bilateral and multilateral financing agencies, and have become largely standardized. Every parameter of the proposed schemc has to be valued in numerical terms and the merit of the scheme then expressed as a benefit, or a return, over an alternative solution which will meet the same objectives in precisely the same way. This approach assumes two pre- conditions: that there is a viable alternative solution and that all the parameters of the scheme can be valued in numerical terms.

If one is dealing with the initial electrification of an outlying area, neither of these preconditions necessarily obtains. An alternative technical solu- tion may well be available-possibly a diesel power scheme-but costs of the diesel fuel may

be so high and the electricity produced so expensive that the scheme could be considered for no more than minimal supplies to essential local services. On the other hand, solid fuel may be available cheaply in large quantities, and would permit a much more ambitious power scheme to be developed. This scheme may also provide important socio-economic benefits, cre- ate local employment opportunities and raise the quality of public services and of life in general in the area concerned. but these features are diffi- cult to value numerically.

The valuation of the costs of solid fuels can also bring difficulties. Commercial fuels of high quali- ty will be priced at production plus delivery costs. The pricing of non-commercial fuels, especially waste products of no intrinsic value, can be more complex. Such fucls could indeed have a negative value; if they are not used for power generation their disposal might have to be financed. Once the possibility of their beneficial use arises, the waste material tends to assume a virtual value depending largely on the handling and transporta- tion charges incurred in presenting the fuel to the power plant. A base price is, however, often assigned to a material which, though a waste product for onc party, can be of beneficial use to another, and a fuel price is thus established at a level above the cost of handling and transporta- tion alone. If the economic merit rests on the price advantage of low-quality fuels, the sensitiv- ity of the conclusion to substantial increases of the fuel price should also be tested to ensure that the scheme remains viable if, during its lifetime, higher-quality fuels have to be brought in to make up for shortfalls in thc availability of the low- quality material.

Such a development is quite feasible in cases where waste from commodity processing is the primary fuel, because the processing activity may well extend over a much shorter timespan than the life of the power plant. The impact of higher fuel prices arising later in the life-cycle of the power station will be cushioned by the discount- ing process by which the present merit of the scheme is generally computed.

An industrially tied power plant will have to meet the economic criteria appropriate to the particular process industry which it serves. A payback period of 5 years at most is commonly

NRFVOL. 11, N O . 3.1987 SHORT NOTES 2x9

expected in such cases, which means that the benefits from the scheme will have to redeem the capital outlay on i t within 5 years. A profitable scheme will naturally be expected to have a longer life. Fuel price escalation experienced after the end of the payback period will no more than moderate the long-term profitability; it will not affect the basic economic merit.

5 . INSTITUTIONAL FACTORS Management effort in utility operations on what- ever scale will tend to concentrate on those activities which make the greatest financial im- pact and embrace the largest number of consum- ers: they concern thc urban and industrial cen- trcs, and the central stations and networks sup- plying them. There is then a danger that the outlying areas with small and dispersed demands will be starved of institutional support and that their development will be retarded. Special mea- sures will have to be taken to ensure that adequate encouragement for the development of small-scale power generation will be provided.

If a public utility is entrusted with the supply development. responsibility for the promotion of small-scale schemes can be assigned to a regional or functional sub-group of the utility; a functional sub-group could, for example, specializc in plan- ning, engineering and project management. The sub-group must havc sufficient autonomy and authority as well as budgetary freedom to develop electrification programmes in outlying areas with- out having to submit every decision to a central authority already overburdened with the prob- lems of the central areas. This is a difficult requirement to meet, because the central author- ity will undoubtedly wish to be involved in negotiations with outside parties on matters of technical assistance and loan arrangements with- out which the electrification programme may not be feasible. A directive is needed in such cases for allocating an adequate amount of management effort to small-scale programmes; this effort must be in scale with the implications of the decisions to be taken. Responsibilities can be assigned on a split level, perhaps as follows:

decisions involving major financial or contrac- tual commitments are referred to the central authority;

decisions dealing with the day-to-day planning, development and implementation of small elec- trification proposals and negotiations on fuel procurement are dealt with by the regional or functional sub-group. It is, of course, a matter of governmental

prerogative to decide to what extent utility management might act on its own in these matters, or within broad government guidelines, and to what extent government agencies should become directly involved in decision-making and even in management. Where experienced tech- nical manpower is scarce it is important to concentrate available resources in a single unit as far as possible and not to spread them thinly over a number of agencies. Extensive institutional interfaces tend to impede the development pro- cess.

An alternative solution ~ particularly appropri- ate to projects involving the utilization of local resources, is to form co-operatives of interested parties in the area concerned and let them initiate, install and manage the project in ques- tion. Technical and financial backing from a central agency will probably be needed, but day-to-day project management at a local level and close inter-linkage with local interests, say with commodity processing and waste-fuel pro- curement arising from it, can do much to over- come the development inertia sometimes experi- enced with an outside agency.

Private developers can also play a role in providing power supplies on a small scale for local use. They may be industrial enterprises which, by over-dimensioning the power plant needed for their own purposes, can offer surplus electricity to neighbouring settlerncnts and thereby initiate the development process for a regular power supply. Once this supply has been established and has been in service for some time, the appropriate public utility or authority usually finds it more interesting to step in and take ovcr the operation- al service.

The institutional problems of small-scale de- velopment are caused by the size of the opera- tion, in relation to the whole electricity supply system of a country, and are not confined to any particular energy form. It is important that they should be recognized and dealt with before active development work is initiated, so that any assist-

290 K..GOLDSMITH NRF VOL. 11, NO. 3,1987

ance given from outside can be properly targeted and programmes set up which will permit max- imum benefit to be derived from them.

6. CONCLUSIONS Technological progress in the development and design of small-scale power plant has produced several attractive concepts for the utilization of solid fuels ranging in quality from anthracite and bituminous coal to agricultural waste and domes- tic refuse. Solid fuels can have a substantial price advantage over oil products, which have tended to monopolize the small-scale power generation field; solid fuels are particularly interesting where local commercial and non-commercial sources can be tapped. The advantage of solid fuels is achieved at the cost of a higher bulk density and a more variable quality of the fuel, and this leads in turn to more expensive handling, transportation and combustion arrangements. A thorough inves- tigation of the technical and economic feasibility of a solid-fuel scenario extending as far into the future as can be foreseen is therefore necessary before the use of solid fuel can be selected. The investigation will need to consider alternative fuels, probably of higher quality, which may have to be substituted in the longer term, especially if

by-products from commodity processing are un- likely to become available because of the shorter asset life of the processing facility.

It is to be hoped that demonstration schemes can be set up in outlying areas of developing countries to test the performance of promising new design concepts. The operation of power plants which have not previously been run under .the conditions obtaining in such areas entails some risk for the operator. The operator will need to be given technical and financial assistance to offset this risk, say by way of engineering support and training, as well as by grants and soft loans. The benefits derived from this assistance should accrue to the electricity consumers in the first instance; it should encourage them to accept a new supply and gradually increase their con- sumption. Economic growth resulting from the greater availability of electricity will increase the consumers’ ability to pay equitable rates once the power supply has grown beyond its initial phase and additional power plants have been installed on a fully commercial basis. Technical assistance, in whatever form it is given, should be looked upon as ‘seed money’ to encourage and support the progression from a subsistence to a monetary economy.