encon BV FinalReport

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					National Energy Policy
        Office
        (NEPO)




   FINAL REPORT



      Thailand
Biomass-Based Power
   Generation and
 Cogeneration Within
Small Rural Industries




BLACK & VEATCH (THAILAND)
       November 2000

             1
                                                 Table of Contents


1.0 Executive Summary (Thai Version) .......................................................................... 1-1

2.0 Executive Summary ................................................................................................... 2-1
    2.1 Introduction .......................................................................................................... 2-1
        2.1.1 Study Objective ........................................................................................... 2-1
        2.1.2 Study Scope of Work .................................................................................. 2-1
        2.1.3 Biomass Energy Overview ......................................................................... 2-2
        2.1.4 Small Power Producers (SPP) Program Overview ..................................... 2-3
    2.2 Thailand Biomass Resource Assessment ............................................................. 2-3
    2.3 Candidate Technologies ....................................................................................... 2-6
        2.3.1 Biomass Fuel Concerns............................................................................... 2-6
        2.3.2 Thermochemical Conversion Options ........................................................ 2-6
    2.4 Candidate Facility Selection ................................................................................ 2-6
        2.4.1 Identification and Screening of Candidate Facilities .................................. 2-7
        2.4.2 Memorandum of Understanding (MOU) Development ............................. 2-7
        2.4.3 Data Collection ........................................................................................... 2-7
        2.4.4 Preliminary Assessment .............................................................................. 2-8
    2.5 Facility Feasibility Studies ................................................................................... 2-8
    2.6 Promotion of Biomass in Thailand’s Energy Future ......................................... 2-14
        2.6.1 Black & Veatch Comments on the SPP Program Regulations ................. 2-14
        2.6.2 Other Factors Impacting Biomass Project Development .......................... 2-14
        2.6.3 Incentives .................................................................................................. 2-15

3.0 Introduction ................................................................................................................ 3-1
    3.1 Study Objective .................................................................................................... 3-1
    3.2 Study Scope of Work ........................................................................................... 3-1
        3.2.1 Task Details ................................................................................................ 3-2
        3.2.2 Activities by Task ....................................................................................... 3-4
    3.3 Biomass Energy Overview .................................................................................. 3-6
        3.3.1 Modern Biomass Applications .................................................................... 3-6
        3.3.2 Biomass Energy in Thailand ....................................................................... 3-8
        3.3.3 Small Power Producers Program Overview ............................................... 3-9

4.0 Thailand Biomass Fuel Resource Assessment (Task 1.1) ......................................... 4-1
    4.1 Fuel Supply Overview ......................................................................................... 4-1
    4.2 Rice Husk ............................................................................................................. 4-6
    4.3 Palm Oil Residues ................................................................................................ 4-8
    4.4 Bagasse .............................................................................................................. 4-11



November 7, 2000                                           TC-1                                             Final Report
     4.5 Wood Residues .................................................................................................. 4-13
     4.6 Corncob .............................................................................................................. 4-16
     4.7 Cassava Residues ............................................................................................... 4-18
     4.8 Distillery Slop .................................................................................................... 4-21
     4.9 Coconut Residues............................................................................................... 4-23
     4.10 Sawdust ............................................................................................................ 4-26

5.0 Identification of Candidate Technologies (Task 1.7) ................................................ 5-1
    5.1 Biomass Fuel Concerns........................................................................................ 5-1
    5.2 Thermochemical Conversion Options ................................................................. 5-1
        5.2.1 Mass Burn Stoker Boiler ............................................................................. 5-2
        5.2.2 Stoker Boiler ............................................................................................... 5-2
        5.2.3 Bubbling Fluidized Bed .............................................................................. 5-2
        5.2.4 Circulating Fluidized Bed ........................................................................... 5-3
        5.2.5 Gasification ................................................................................................. 5-3
        5.2.6 Conversion Options Conclusion ................................................................. 5-4
    5.3 Emission Controls ................................................................................................ 5-6
        5.3.1 Nitrogen Oxide Control .............................................................................. 5-6
        5.3.2 Particulate Emissions Control ..................................................................... 5-7

6.0 Identification and Screening of Candidate Facilities (Task 1.2 & Task 1.3) ............. 6-1
    6.1 Identification Process ........................................................................................... 6-1
    6.2 Screening of Candidate Facilities ........................................................................ 6-1

7.0 Development of a Memorandum of Understanding (Task 1.4) ................................. 7-1
    7.1 Potential Project Owners...................................................................................... 7-1
        7.1.1 Facility Owner ............................................................................................ 7-1
        7.1.2 Developer .................................................................................................... 7-1
        7.1.3 Advisor ........................................................................................................ 7-2
    7.2 Generic MOU....................................................................................................... 7-2

8.0 Candidate Facility Data Collection (Task 1.5) .......................................................... 8-1

9.0 Preliminary Assessment of Selected Facilities (Task 1.6) ......................................... 9-1

10.0 Feasibility Study Summary Results (Task 2) ......................................................... 10-1
   10.1 Facilities Studied .............................................................................................. 10-1
   10.2 Study Assumptions .......................................................................................... 10-3
   10.3 Summary Results ............................................................................................. 10-4
       10.3.1 Sommai Rice Mill Co., Ltd. .................................................................... 10-6
       10.3.2 Sanan Muang Rice Mill Co., Ltd. ........................................................... 10-7
       10.3.3 Thitiporn Thanya Rice Mill Co., Ltd. ..................................................... 10-7


November 7, 2000                                           TC-2                                            Final Report
          10.3.4 Plan Creations Co., Ltd. .......................................................................... 10-8
          10.3.5 Chumporn Palm Oil Industry Plc. ........................................................... 10-8
          10.3.6 Karnchanaburi Sugar Industry Co., Ltd. ................................................. 10-9
          10.3.7 Woodwork Creation Co., Ltd. ............................................................... 10-10
          10.3.8 Mitr Kalasin Sugar Co., Ltd. ................................................................. 10-11
          10.3.9 Liang Hong Chai Rice Mill Co., Ltd. ................................................... 10-11
          10.3.10 Southern Palm Oil Industry (1993) Co., Ltd....................................... 10-12

11.0 Presentation of Study Results to Facility Owners (Task 3.1 and Task 3.2) ........... 11-1
   11.1 Sommai Rice Mill Co., Ltd. ............................................................................. 11-1
   11.2 Sanan Muang Rice Mill Co., Ltd. .................................................................... 11-2
   11.3 Thitiporn Thanya Rice Mill Co., Ltd. .............................................................. 11-3
   11.4 Plan Creations Co., Ltd. ................................................................................... 11-4
   11.5 Chumporn Palm Oil Industry Plc. .................................................................... 11-4
   11.6 Karnchanaburi Sugar Industry Co., Ltd. .......................................................... 11-6
   11.7 Woodwork Creation Co., Ltd........................................................................... 11-7
   11.8 Mitr Kalasin Sugar Co., Ltd. ............................................................................ 11-8
   11.9 Liang Hong Chai Rice Mill Co., Ltd. .............................................................. 11-9
   11.10 Southern Palm Oil Industry (1993) Co., Ltd................................................ 11-10

12.0 SPP Program Regulations Review ......................................................................... 12-1
   12.1 SPP Program Regulations Overview ............................................................... 12-1
       12.1.1 Basis for the SPP Program ...................................................................... 12-1
       12.1.2 Least Cost Planning and the SPP Regulations ........................................ 12-2
       12.1.3 SPP Regulations ...................................................................................... 12-2
   12.2 Current Status of the SPP Program .................................................................. 12-7
   12.3 Black & Veatch Comments on Current Regulations ....................................... 12-9
       12.3.1 Capacity and Energy Payments .............................................................. 12-9
       12.3.2 Contract Term ....................................................................................... 12-10
       12.3.3 Comments on EGAT Regulations ........................................................ 12-10
   12.4 Conclusion ..................................................................................................... 12-12

                                                  List of Tables

Table 2-1      Most Viable Biomass Fuels in Thailand a ...................................................... 2-4
Table 2-2      Facility Summary ........................................................................................... 2-9
Table 4-1      Most Viable Biomass Fuels ............................................................................ 4-2
Table 4-2      Comparison of Thailand Biomass Fuel Supply Studiesa ................................ 4-4
Table 4-3      Rice Husk Characteristics............................................................................... 4-6
Table 4-4      Palm Oil Residue (EFB, Fiber, Shell) Characteristics ................................... 4-9
Table 4-5      Bagasse Characteristics ................................................................................ 4-11


November 7, 2000                                        TC-3                                           Final Report
Table 4-6 Wood Residue Characteristics ...................................................................... 4-14
Table 4-7 Corncob Characteristics................................................................................ 4-16
Table 4-8 Cassava Residue Characteristics .................................................................. 4-19
Table 4-9 Distillery Slop Characteristics ....................................................................... 4-21
Table 4-10 Coconut Residue Characteristics ................................................................ 4-24
Table 4-11 Sawdust Characteristics .............................................................................. 4-26
Table 5-1 General Technical Compatibility Ratings (L-Low, M-Medium, H-High) for
            Various Fuels and Boiler Types .................................................................. 5-4
Table 5-2 Steam Generator Technology Comparison for Different Plant Sizes                                          5-5
Table 5-3 Steam Generator Technology Ash Characteristics Comparison                                                5-6
Table 10-1 Summary of Financial Analyses                                                                         10-6
Table 10-2 Summary Results of Proposed New Power Facilities ............................... 10-14
Table 10-3 Summary Results of Proposed Facility Modifications ............................. 10-15
Table 10-4 Summary Results of Proposed New Power Facilities .............................. 10-16
Table 11-1 Summary Results Sommai Rice Mill Facility ............................................ 11-1
Table 11-2 Summary Results Sanan Muang Rice Mill Facility ................................... 11-2
Table 11-3 Summary Results Thitiporn Thanya Rice Mill Facility ............................. 11-3
Table 11-4 Summary Results Plan Creations Facility ................................................. 11-4
Table 11-5 Summary Results Chumporn Palm Oil Facility ......................................... 11-6
Table 11-6 Summary Results Karnchanaburi Sugar Industry Facility ......................... 11-7
Table 11-7 Summary Results Woodwork Creation Facility ......................................... 11-8
Table 11-8 Summary Results Mitr Kalasin Sugar Facility ........................................... 11-9
Table 11-9 Summary Results Liang Hong Chai Facility ............................................ 11-10
Table 11-10 Summary Results Southern Palm Oil Facility ........................................ 11-11
Table 12-1 Power Purchases from Small Power Producers as of February 2000 ........ 12-8




November 7, 2000                                     TC-4                                       Final Report
                                               List of Figures

Figure 2-1. Aggregate Potential Net Electric Capacity From Most Viable Residues
             And Candidate Facility Locations. ............................................................ 2-5
Figure 3-1. Fresh Oil Palm Bunch At A Thailand Palm Oil Mill. .................................. 3-7
Figure 3-2. Harvesting Of Rubber From A Parawood Plantation. ................................. 3-8
Figure 3-3. Industrial Energy Use In Thailand. .............................................................. 3-9
Figure 4-1. Aggregate Potential Net Electric Capacity From Most Viable Residues. ... 4-3
Figure 4-2. Rice Husk Distribution. ................................................................................ 4-7
Figure 4-3. Palm Oil Residue Distribution. .................................................................. 4-10
Figure 4-4. Bagasse Distribution. ................................................................................. 4-12
Figure 4-5. Parawood Residue Distribution.................................................................. 4-15
Figure 4-6. Corncob Distribution. ................................................................................. 4-17
Figure 4-7. Cassava Residue Distribution. ................................................................... 4-20
Figure 4-8. Distillery Slop Distribution. ....................................................................... 4-22
Figure 4-9. Coconut Residue Distribution. ................................................................... 4-25
Figure 10-1. Candidate Facility Locations. ................................................................... 10-2
Figure 10-2. Baht/Us$ Daily Average Interbank Exchange Rate ................................. 10-3
Figure 10-3. Typical Biomass Power Plant Configuration. .......................................... 10-5
Figure 12-1. Variation In Sugarcane Output Between 1993 And 1999. ..................... 12-11

                                              List Of Annexes

Annex 1            Rice Husk
Annex 2            Palm Oil Residues
Annex 3            Bagasse
Annex 4            Wood Residues
Annex 5            Corncob
Annex 6            Cassava Residues
Annex 7            Distillery Slop
Annex 8            Coconut Residues
Annex 9            Biomass Questionnaire Form
Annex 10           MOU Form




November 7, 2000                                     TC-5                                         Final Report
                           1.0        Executive Summary
                                 รายงานฉบับย่อ




 1.1           บทนา                                                1-2
               1.1.1                                               1-2
               1.1.2                                               1-2
               1.1.3                                               1-3
               1.1.4                                               1-3
1.2                                                                1-4
1.3                                                                1-6
               1.3.1                                               1-6
               1.3.2                                               1-6
1.4                                                                1-6
               1.4.1                                               1-6
               1.4.2                                               1-7
               1.4.3                                               1-7
                                                                   1-7
1.5                                                                1-8
1.6                                                                1-11
               1.6.1                                               1-11
               1.6.2                                      ชีวมวล   1-12
               1.6.3                                               1-12



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        1.1.4                                      ้
                      โครงการการรับซื้ อไฟฟ้ าจากผูผลิตรายเลก

                       อุตสาหกรรมขนาดเลกที่เกี่ยวข้องกับการผลิตไฟฟ้ าจากชีวมวล สามารถขายไฟฟ้ าที่เหลือให้แก่ กฟผ. ตาม ระเบียบการรับซื้ อไฟฟ้ าจากผูผลิตรายเลก
                                                                                                                                                         ้
        โครงการนี้ ริเริ่ มโดยคณะกรรมการนโยบายพลังงานแห่ งชาติและดาเนิน-                   การโดยรัฐวิสาหกิจด้านไฟฟ้ า      (กฟผ.         กฟน.             และกฟภ.)
        ประโยชน์ที่ได้รับคือเปนการอนุรักษ์เชื้อเพลิงฟอสซิ ล ลดการ นาเข้าเชื้อเพลิง ประหยัดเงินตราต่างประเทศ และทาให้แหล่งผลิตไฟฟ้ ากระจายตัวออกไป
        จุดมุ่งหมายของโครงการ นี้คือให้ตระหนักว่าผลประโยชน์ภายนอกดังกล่าว มีผลทาให้ตนทุนของผูซ้ื อไฟฟ้ าไม่สูงกว่าต้นทุนจากแหล่งอื่นๆ
                                                                                                ้         ้
                                                     ้
                       โครงการการรั บซื้ อไฟฟ้ าจากผูผลิตรายเลกดังกล่าวมีเงื่อนไขหลายประการคือ กาหนดปริ มาณรับซื้ อไม่เกิน 60 เมกกะวัตต์ (อาจสู งถึง 90
        เมกกะวัตต์ในบางพื้นที)  ่    กฟผ.               ้
                                                  เปนผูรับซื้ อแต่ผเู ้ ดียว  และการจ่ายเงินมี       2      แบบ      แบบแรก     จ่ายเฉพาะค่าพลังงาน(Non-firm)
        แบบสองจ่ายทั้งค่าพลังงานและพลังไฟฟ้ า              (Firm)               ซึ่ งต้องทาสัญญาซื้ อขาย        5-25         ปี         และมีเงื่อนไขอื่นๆเพิ่มเติมอีก
        ถึงแม้แบบสองจะทาให้ผูผลิตไฟฟ้ ามีรายได้ที่แน่นอน แต่มีเพียง 3 ใน 24 รายเท่านั้น ของจานวนโครงการโรงไฟฟ้ าชีวมวลทั้งหมด2 นอกจากนี้้ มีเพียง 6.8 %
                                  ้
        หรื อ 101 เมกกะวัตต์ จาก 1,491 เมกกะวัตต์ ที่มาจากพลังงานนอกรู ปแบบ 3


1.2                     น                        น         ท

                                                                                                                                                                  -

1
  “World Energy Council, Renewable Energy Resource: Opportunities and Constraints 1990-2020, 1993”
2
  NEPO Website, www.nepo.go.th/power/pw-spp-purch00-02-E.html
3
  Arthur Anderson, “Thailand Power Pool and Electricity Supply Industry Reform Study- Phase 1 Final Report,”
Volume 5, March 1, 2000.
                                                                             1-3
                    -
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                                                                      1-1



                                                             20                  2.2             50           5.8
                                           *               2.3-3.7            0.41-0.74       2.25-3.5        1.8
                                                           14,100              10,800          10,000        10,000
                                               - **         9,800              14,050          14,100        15,500
                                                          234-375               33-53         160-248         118
           :
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    แกลบ                          ้
               - ประเมินจากโรงสี ขาวที่มีขนาดกาลังผลิต 100 ตันข้าวเปลือก/วันขึ้นไป
    กากปาล์ม - ประเมินจากโรงงานสกัดน้ ามันปาล์มดิบที่ได้มาตรฐาน จานวน 17 โรง ประกอบด้วยกะลาไฟเบอร์และ
                    ทะลายเปล่า
    กากอ้อย - ประเมินจากโรงงานผลิตน้ าตาลทราย จานวน 46 โรง
                                                         ั่
    เศษไม้ - ประเมินจากเศษไม้และขี้เลื่อยของโรงเลื่อยไม้ทวๆ ไป และโรงงานแปรรู ปไม้ยางพาราและจากจานวน
                   ปลายไม้ของสวนยางพารา
                                           85%

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      1. . ท                                 น    นท                    น          น

                              Mass burn stoker boiler
                              Stoker boiler (stationary sloping grate, traveling grate, and vibrating grate)
                              Fluidized bed boiler (bubbling and circulating)
                              Gasification with combustion in a close-coupled boiler
                              Pulverized fuel suspension fired boiler
                                  ่                      ั                       ้
                 แต่ละเทคโนโลยีที่กล่าวมานี้สามารถใช้ได้กบชีวมวลทุกชนิ ด แต่จะมีขอดี ข้อเสี ย แตกต่างกันออกไป Stoker boiler เปนที่นิยมมากที่สุด
      แต่ไม่ใช่ดีที่สุด ยกตัวอย่างเช่น แกลบจะเผาไหม้ได้ดีใน Fluidized bed และ Gasifier เพราะ อุณหภูมิเผาไหม้ต่าช่วยลดการจับตัวเปนก้อนของขี้เถ้า
                                                                                                               ้
      เตาเผาแบบ Stoker และ Suspension-firing สามารถใช้ได้แต่ ต้องระวังให้การจับตัวเปนก้อนของขี้เถ้ามีนอยสุ ด โดยทัวไป Fluidized Bed
                                                                                                                       ่
      เปนทางเลือกที่ดีที่สุดเพราะสามารถใช้        กับเชื้อเพลิงที่มีความชื้นสู ง       และมีหลายขนาด
                                                                    -

               การศึกษานี้ได้แนะนา Stoker boiler เพราะมีใช้แพร่ หลาย ราคาถูก และประสิ ทธิภาพพอสมควร

1.4   การคัดเลือกโครงการ




      1.4.1
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                                                                        1-6
      1. .            นท


                                                                                                                                                 23
      %)   เจ้าของโครงการต้องพัฒนาโรงไฟฟ้ าต่อไปจนสาเรจ ถ้าไม่ดาเนินต่อเจ้าของโครงการอาจจะต้องออกค่าใช้จ่าย ของการศึกษานี้จานวนครึ่ งหนึ่งให้แก่ สพช.
                                             ั
      ถ้าไม่แจ้งเหตุผลที่เพียงพอต่อการไม่ปฏิบติตามข้อผูกพันต่อสพช.
                                      ู้                               ั
                    อย่างไรกตามได้มีผสนใจในโครงการนี้ จานวนหลายราย แต่คดเลือกเหลือเพียง 10 รายด้วยกันคือ
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        
                                      ั
            ร่ วมมือกับอุตสาหกรรมที่มีศกยภาพสู ง          (เช่น       โรงงานน้ าตาล)   ในการเพิ่มประสิ ทธิภาพเครื่ องจักรและ
            สนับสนุนให้มีการผลิตไฟฟ้ าจากชีวมวลมากขึ้น
        




                                   00




                                                         1-12
                                                                                                      ตาราง 1-2



                                                                            น          น        ท2                                                                         น   น       ท3

                                                                        นน                            .        น    .                   .        น            .                .             น              .ท




                                                      98,670          13,800            27,600        4,000         89,100                   20,834               31,680           76,000        33,000     73,500
                                                      86,900          79,000            79,000       134,000        111,860                  34,216               54,000           76,000        33,000     73,500

                                                                                                                                                          a                                                                 a
                                                     1,225,868       1,113,900         1,113,900     1,380,200                      b       406,980               510,300          725,040       465,300                    b
                                                                                                                   1,564,000                                                                               1,072,932
                                             -        18,708          18,708            18,708        21,015                    c                    cd           21,900           17,400        18,700                 e
                                                                                                                    49,500                  47,205                                                          21,700
                                                       8,800          8,000                8,000      8,800             4,550                1,850                 3,100            5,600         3,300      6,200
                                                       8,800          8,000                8,000      8,800             2,520                1,850                 3,100            5,600         3,300      5,366
                                                                                                                        31.85                                                                                       e
                                                                                                                                                                                                             13.9
                                                       9.71            9.27                9.27       10.59              5.0                  1.95                 8.65             13.4          9.73        14.6
                                                       32.6            25.5                26.4           7.95          20.4                  18.9                  4.4             13.3           7.6        11.6
                                     ฿   $               –              –                   –              –            15.8                  15.9                 2.1              9.8           5.1         8.4
                            20 %, %                      –              –                   –              –            29.4                  26.7                 8.5              20.1          12.6       17.9
                                ,%                       –              –                   –             38.5       39-69                    27.5                  25               46          13-29      13-25
        :

b บ.ชุมพรฯ ใช้ก๊าซชีวภาพ 6,000,000 ลบ.เมตร/ปี ส่ วนบ.ทักษิณ ใช้ 3,570,000 ลบ.เมตร/ปี
c อ้างอิงจากประสิ ทธิภาพของโรงไฟฟ้ าในโรงงานปั จจุบน ั
d รวมส่ วนที่เปนกาลังไฟฟ้ าส่ วนเกินของโรงงานน้ าตาลช่วงเปิ ดหี บ
e เปนค่าโดยเฉลี่ย เนื่องจากอัตราการใช้มีการเปลี่ยนแปลงตามฤดูกาล

                                                                                                           1-13
                            2.0 Executive Summary


2.1 Introduction
        This Executive Summary and Final Report have been prepared by Black & Veatch
according to the Terms of Reference for the Thailand Biomass-Based Power Generation
and Cogeneration within Small Rural Industries study.            This study has been
commissioned by the National Energy Policy Office (NEPO) of Thailand. The report
presents many aspects related to biomass energy and includes summaries of biomass
power plant feasibility studies done for ten sites in Thailand.
        The Executive Summary presents key concepts and findings of the study and
includes discussion of the study background, resource assessment, technologies, facility
selection, feasibility study summaries, and promotion of renewables in Thailand’s future.

2.1.1 Study Objective

       The ultimate objective of this study is to develop biomass-based power generation
as a source of electricity in Thailand. Using biomass agricultural residues in power
generation and cogeneration schemes have the benefits of helping the involved facility to
be self-sufficient in meeting its own electricity and process heat demands, while
eliminating the problem of waste disposal. Developing the biomass energy resource will
also benefit Thailand’s economy because it helps the country to become less dependent
on imported fossil fuels. The specific goals of this study are as follows:
              To review the existing status of biomass fuels in Thailand.
              To conduct feasibility studies on 10 small rural industries in order to
               assess their potential for biomass-based power generation and
               cogeneration.
              To demonstrate the financial viability of biomass-based power
               generation or cogeneration at the facilities in order to encourage
               investment decisions of the owners towards implementing the projects.
              To assist the facilities to implement power generation and
               cogeneration, and to enter EGAT’s SPP Program.

2.1.2 Study Scope of Work
       In support of the objective given above, three main study tasks were identified as
outlined below:
Task 1    Data Collection and Prefeasibility Study
          This task included preliminary work in support of the feasibility studies.
          Black & Veatch collected data and conducted prefeasibility studies to identify
          potential fuels, facilities, and technology for biomass-based power generation


November 25, 2011                          2-1                               Final Report
              or cogeneration. A standard Memorandum of Understanding (MOU) between
              NEPO, the facility owner/developer, and Black & Veatch was developed and
              the regulations of the SPP program were reviewed.
Task 2        Feasibility Studies
              Black & Veatch performed feasibility studies for ten power plants burning
              biomass fuels (rice husks, bagasse, wood, etc.) at sites throughout Thailand.
              The feasibility studies are contained in a separate report to the Final Report.
              The studies assess feasibility in the following areas: technical, economic,
              financial, commercial, socioeconomic, ecological, juridical, and political.
Task 3        Assist Development of Biomass-Based Power Generation
              Owners were presented the results of their respective feasibility studies and
              then assisted in initial project implementation activities. A handbook was
              developed outlining the procedure for entering the SPP program, including all
              responsibilities and performance standards for the SPP.

2.1.3 Biomass Energy Overview
        About 12 percent of the world's energy comes from the use of biomass fuels,
which include items as diverse as residential yard waste, manure, agricultural residues,
and dedicated energy crops.1 In industrialized nations, bioenergy facilities typically use
biomass fuels in large industrial cogeneration applications (pulp and paper production,
sugar cane milling, etc.). Conversely, developing nations largely rely on biomass for
rural cook stoves or small industries. Such applications are relatively inefficient and
dirty. Increasing industrialization and household income are driving the economies of
developing nations to implement cleaner and more efficient biomass technologies.
        Environmental concerns may help make biomass an economically competitive
fuel. Because biomass fuels are generally less dense, lower in energy content, and more
difficult to handle than fossil fuels, they usually do not compare favorably to fossil fuels
on an economic basis. However, biomass fuels have several important environmental
advantages. Biomass fuels are renewable, and sustainable use is greenhouse gas neutral
(biomass combustion releases no more carbon dioxide than absorbed during the plant’s
growth). Biomass fuels contain little sulfur compared to coal (reduced sulfur dioxide
emissions) and have lower combustion temperatures (reduced nitrogen oxide emissions).
However, unless biomass is efficiently and cleanly converted to a secondary energy form,
the environmental benefits are only partially realized, if at all. For this reason, efficient,
modern biomass utilization must be favored over traditional applications.
        The use of biomass as an energy source is widely practiced throughout Thailand
industries, particularly in rural and agricultural areas. Major industrial users of biomass
energy include sugar cane milling, rice milling, palm oil production, and the wood


1
    World Energy Council, “Renewable Energy Resources: Opportunities and Constraints 1990-2020,” 1993.


November 25, 2011                                 2-2                                   Final Report
products industry. Although biomass energy use has been increasing at 8 percent annual
growth recently, this rate has not been as fast as the overall growth in industrial energy
use. Consequently, the share of biomass energy used in industrial processes has steadily
dropped from 46 percent in 1985, to 25 percent in 1996. Interestingly, although overall
industrial energy use declined when the financial crisis started in 1997, use of agricultural
and wood residues actually climbed, increasing the share of biomass energy to 28 percent.

2.1.4 Small Power Producers (SPP) Program Overview
        Small rural industries engaged in biomass power production may sell excess
generation back to the grid through the SPP program. The SPP program was initiated by
the National Energy Policy Council and is implemented by Thailand electricity authorities
(EGAT, PEA, MEA). Benefits of the program include conservation of fossil fuels,
reduced fuel imports, conservation of foreign hard currency, and distributed generation.
The intent of the program is to realize these external benefits, yet result in a direct cost to
ratepayers that is no higher than supplying electricity without SPP projects.
        The SPP regulations establish several conditions for purchases from SPPs. These
include a purchased capacity limitation of 60 MW (up to 90 MW in certain locations) and
the stipulation that EGAT be the sole purchaser of electricity. Payments to the SPP can
consist of an energy-only payment for electricity delivered (kWh) or an energy and a
capacity payment. Capacity payments are made for contracts that are 5 to 25 years
(“firm”) and that meet certain other requirements. Although capacity payments provide
substantial revenue to power projects, only three out of the 24 biomass projects accepted
so far into the SPP program receive such payments.2 Furthermore, only 6.8 percent
(101 MW) of the total SPP capacity connected to the EGAT system (1,491 MW) involves
waste or renewable resources.3

2.2 Thailand Biomass Resource Assessment
         Black & Veatch conducted a biomass fuel supply review for Thailand. The
review investigated nine types of biomass as possible fuel for power and cogeneration
plants: rice husk, oil palm residues, bagasse, wood residues, corncob, cassava residues,
distillery slop, coconut residues, and sawdust. Availability, distribution, production rates
and forecasts, involved industries, prices, and the general suitability of the fuels for power
production were assessed. This section provides a summary of the investigation.




2
 NEPO website, www.nepo.go.th/power/pw-spp-purch00-02-E.html
3
 Arthur Anderson, “Thailand Power Pool and Electricity Supply Industry Reform Study-Phase 1 Final
Report,” Volume 5, March 1,2000.


November 25, 2011                             2-3                                  Final Report
        Table 2-1 provides basic information on the most viable fuels identified: rice husk,
palm oil residues, bagasse (from sugar cane milling), and wood residues. Other fuels
examined are not considered as viable for various reasons. Corncobs and coconut
residues are generally left scattered, making collection difficult. They are suitable
supplementary fuels but are not a significant source of energy for power generation.
Because of their high moisture content, cassava residues and distillery slop are not likely
to find widespread implementation as fuels.


                                            Table 2-1
                              Most Viable Biomass Fuels in Thailand

                                                           Palm Oil                    Wood
Fuel                                          Rice husk                  Bagasse
                                                           Residues                   Residues
Source output, 106 tonne/yr                       20          2.2           50           5.8
                    6            a
Available residue, 10 tonne/yr                 2.3-3.7     0.41-0.74     2.25-3.5        1.8
Higher heating value, kJ/kg                     14,100      10,800        10,000        10,000
Fuel consumption, tonne/yr/MW b                  9,800      14,050        14,100        15,500
Aggregate power generation potential, MW       234-375       33-53       160-248         118
Notes:
  a
    Each biomass was estimated based on the following assumptions.
     Rice-husk –Based on rice mills of capacity minimum 100 tonnes of paddy/day.
     Palm Oil Residues – Based on the 17 crude palm oil extracting facilities. Residues consist
       of shells, fibre, and empty fruit bunch.
     Bagasse – Based on the 46 Sugar mills.
     Wood Residues – Included discarded processed wood and sawdust from general sawmills
       and parawood processing facilities and small logs from parawood plantation forest.
  b
    A uniform 85 percent capacity factor is assumed in this study.

        Aggregate power generation potential from all residues surveyed in this study
ranges from 779 to 1,043 MW. This value is for residues not already in use and does not
account for generation gains by increases in existing process or power generation
efficiency (e.g., sugar cane milling). Figure 2-1 shows distribution of capacity
developable from the four most viable fuels. The most promising provinces account for
about 300 MW of developable capacity and include Suratthani, Suphan Buri,
Kanchanaburi, Nakhon Sawan, Nakhon Ratchasi, Udon Thani, Kamphaeng Phet, Krabi,
Trang, and Nakhon Sri Thammarat.




November 25, 2011                             2-4                                   Final Report
                                                 Khon Kaen                Kalasin
Kamphaeng Phet
Nakorn Sawan
                                                                 Roi Et
Uthai Thani




                            Chumporn




                          Surat Thani




                  Krabi

                    Trang




Figure 2-1.      Aggregate Potential Net Electric Capacity from Most Viable Residues and
                 Candidate Facility Locations.



November 25, 2011                             2-5                                   Final Report
2.3 Candidate Technologies
       This section discusses the various technology considerations applicable for the
candidate facilities included in this project.

2.3.1 Biomass Fuel Concerns
        Experience has shown that biomass fuels can be successfully burned by all of the
major combustion technologies provided that characteristics of the biomass have been
properly evaluated and accounted for in the design. Compared to coal, biomass fuels are
generally less dense, have a lower energy content, and are more difficult to handle. In
addition to these concerns, the ash of biomass fuels usually has high levels of alkali
components, which can cause slagging, fouling, and tube wastage. The ash of some
biomass fuels is also highly abrasive (notably rice husks). The problems associated with
alkali materials vary widely between different fuels and are best determined through
experience, although slagging potential can be determined by analysis of fuel properties
to a limited extent. Lower combustion temperatures reduce slagging significantly.

2.3.2 Thermochemical Conversion Options
      Proven conversion systems for burning biomass fuels include the following:
          Mass burn stoker boilers.
          Stoker boilers (stationary sloping grate, travelling grate, and vibrating grate).
          Fluidized bed boilers (bubbling and circulating).
         Gasification with combustion in a close-coupled boiler.
         Pulverized fuel suspension fired boilers.
        Each of these technologies has advantages and disadvantages, and all have been
commercially proven with biomass. Stoker boilers are widely in use but are not always
the most appropriate choice. For example, rice husks are most easily fired in fluidized
beds or gasifiers because the lower operation temperatures reduce the risk of slagging.
Stokers and suspension-fired units may also be used, but precautions should be taken to
minimize slagging potential. Fluidized beds are good choices in general because they can
tolerate wide variations in fuel moisture and size. Suspension firing is not suitable for
most biomass fuels because they are usually difficult to grind. Gasification may be a
suitable choice, but lacks widespread technical and commercial acceptance.
        Due to their widespread availability, relatively low cost, and reasonable
efficiency, stoker boilers were recommended for the facilities studied in this report.

2.4 Candidate Facility Selection
         Candidate facility selection involved identification and screening of candidate
facilities, development of MOUs, data collection, and preliminary assessment of
promising sites for full feasibility study.




November 25, 2011                           2-6                                Final Report
2.4.1 Identification and Screening of Candidate Facilities
         To identify potential sites, the study team contacted various agro-industrial
associations, approached sites that generate large amounts of residues, and developed a
questionnaire to solicit facility information and interest in project development. Initial
site selection guidelines for identification of suitable facilities included:
           Availability of biomass supply for power generation or cogeneration.
           Biomass disposal concerns and the intention to develop a power plant.
         Capability and experience of the facility owner(s) in developing power plants.
        One of the most important aspects in site selection was owner willingness to
proceed with a power project. Because of the downturn in the economy, many facilities
were uncomfortable with making large investments, especially in power generation, a
field outside their regular business. For this reason, the study team had more difficulty
than expected locating candidate facilities.

2.4.2 Memorandum of Understanding (MOU) Development
        Having identified potential sites and established a desire in the facility owners to
proceed with the study, the next step in the process was to develop a MOU between the
owner, NEPO, and Black & Veatch. The MOU outlines the commitment of the owner to
pursue development of a biomass power facility if the feasibility study determines the
proposed facility to be technically, environmentally, and financially viable. Through
execution of the MOU, it is understood that NEPO is financing the study under the
assumption that the facility owner will pursue further development of a viable project or
refund half the cost of the study unless acceptable reasons are provided to NEPO in
writing. The MOU defines the internal rate of return (IRR) for determining financial
viability at 23 percent.
        The study team eventually received signed MOUs from each of the ten facilities:
          Sommai Rice Mill Co., Ltd. Facility in Roi Et Province
          Sanan Muang Rice Mill Co., Ltd. in Kamphaeng Phet Province
          Thitiporn Thanya Rice Mill Co., Ltd. in Nakorn Sawan Province
          Plan Creations Co., Ltd. in Trang Province
          Chumporn Palm Oil Industry Plc., in Chumporn Province
          Karnchanaburi Sugar Industry Co., Ltd. in Uthai Thani Province
          Woodwork Creation Co., Ltd. in Krabi Province
          Mitr Kalasin Sugar Co., Ltd. in Kalasin Province
          Liang Hong Chai Rice Mill Co., Ltd. in Khon Kaen Province
          Southern Palm Oil Industry (1993) Co., Ltd. in Surat Thani Province

2.4.3 Data Collection
      Following identification and initial screening of prospective facilities, Black &
Veatch provided detailed data requests to facility owners. Data requests were facility


November 25, 2011                           2-7                               Final Report
specific and were used to help Black & Veatch identify the optimal configuration of the
power facility, evaluate project feasibility, and identify other benefits of the project. Of
particular importance was the quantity of biomass fuel available to the project, reliability
of supply, and other characteristics of the fuel. Other information collected included
water resource data, process descriptions, plant layouts, maps, labor requirements, current
waste disposal practices, cost of electricity purchases, process steam needs, hours of
operation, and plans for future expansion.

2.4.4 Preliminary Assessment
         When review of this information indicated a favorable potential for development,
facility site visits were arranged to perform a preliminary assessment of the selected
facility. The assessment was accomplished through review of the existing facilities,
discussions with the staff, and gathering of other pertinent facility information.
         Each assessment addresses the facility’s potential for power plant development or
modification. None of the assessments completed identified any obvious development
problems that would preclude further investigation in a feasibility study.

2.5 Facility Feasibility Studies
        This section summarizes the feasibility studies for the ten facilities and the
presentations made to facility owners. Figure 2-1 shows the location of the facilities and
Table 2-2 summarizes results of the studies.
        Due to the length of the project and other factors, two major assumptions were
changed during the course of the study. These are the exchange rate for financial
evaluation and the capital cost basis. Because the study commenced near the start of the
financial crises, the Baht to US dollar exchange rate has fluctuated significantly over the
course of this study. Evaluation of the first four sites was initially issued in June 1998
and used an exchange rate of 43.53 Baht/US$. Since that time the exchange rate has
dropped significantly. The financial analysis for the last six sites reflects this drop and
assumes an exchange rate of 37.15 Baht/US$.
        Secondly, there is an overall increase in project costs for facilities. This increase
is due to two factors.
           Assumed equipment sourcing changed from Pacific Rim (e.g. Chinese)
            suppliers to higher cost European and US suppliers. These suppliers
            provided higher cost information.
           The last six sites were smaller resulting in higher specific costs due to
            economies of a scale.




November 25, 2011                           2-8                                Final Report
                                                                                   Table 2-2
                                                                                Facility Summary

                                                      Sanan       Thitiporn                                 Karnchan-                     Mitr           Liang
                                        Sommai                                   Plan       Chumporn                      Woodwork                                   Southern
Facility                                              Muang        Thanya                                     aburi                      Kalasin       Hong Chai
                                        Rice Mill                              Creations     Palm Oil                      Creation                                  Palm Oil
                                                     Rice Mill    Rice Mill                                 Sugar Mill                  Sugar Mill     Rice Mill
Facility type                           Rice mill    Rice mill    Rice mill      Wood          Palm oil     Sugar mill      Wood         Sugar mill     Rice mill     Palm oil
                                                                                products         mill                      products                                     mill
New plant or modifications?               New          New          New           New          Mods.          Mods.          New            New            New          New
Residue available from facility, t/yr    98,670       13,800       27,600        4,000         89,100         20,834        31,680         76,000        33,000        73,500
Total residue use, t/yr                  86,900       79,000       79,000       134,000        111,860        34,216        54,000         76,000        33,000        73,500
Residue type                            Rice husk    Rice husk    Rice husk      Wood         Palm oil       Bagasse,       Wood          Bagasse       Rice husk     Palm oil
                                                                                 waste       res. othersa    corncob        waste                                    res. othersa
Annual heat available, GJ/yr            1,225,868    1,113,900    1,113,900    1,380,200     1,564,000b      406,980       510,300        725,040        465,300     1,072,932b
Net plant heat rate, kJ/kWh              18,708       18,708       18,708        21,015        49,500c       47,205c d      21,900         17,400        18,700       21,700e
Net plant output, kW                     8,800         8,000        8,000        8,800          4,550         1,850          3,100         5,600          3,300        6,200
Output sold to EGAT, kW                  8,800         8,000        8,000        8,800          2,520         1,850          3,100         5,600          3,300        5,366
Cogeneration? Steam flow, tonne/hr         No           No           No            No        Yes, 31.85        No             No             No            No        Yes, 13.9e
Est. total project cost, US$ mil          9.71         9.27          9.27        10.59           5.0           1.95          8.65           13.4           9.73         14.6
IRR (base case), percent                  32.6         25.5          26.4          7.9          20.4           18.9           4.4           13.3           7.6          11.6
IRR at 43.5 Baht/US$ exchange rate          –            –            –            –            15.8           15.9           2.1            9.8           5.1           8.4
IRR at 20% reduced capital cost             –            –            –            –            29.4           26.7           8.5           20.1           12.6         17.9
IRR for alternative study (see              –            –            –           38.5          39-69          27.5           25             46           13-29        13-25
writeup)
Notes:
  a
     Chumporn Palm: palm oil residues (fiber, shells, empty fruit bunch), biogas, coconut husks; Southern Palm: palm oil residues (fiber and shells only), biogas.
  b
     Chumporn Palm: includes biogas use of 6,000,000 m3/yr (136,000 GJ/yr); Southern Palm: includes biogas use of 3,570,000 m3/yr (80,682 GJ/yr).
  c
     Based on existing power facility performance information considering proposed modifications.
  d
     Includes credit for surplus power generated by the existing sugar mill during the on-season.
  e
     Average value. Southern Palm Oil requires varying amounts of process steam depending on the season.




November 25, 2011                                                                   2-9                                                                       Final Report
         Based on the assumptions noted in each study, the results of the studies indicate
that all ten of the candidate facilities are technically and environmentally viable. A
variety of biomass fuels were examined in the studies including rice husk (4 facilities),
wood waste (2), palm oil residues (2), and bagasse (2) as primary fuels and coconut husks
(1), biogas (2), and corncobs (1) as supplementary fuels. Both entirely new power
facilities and modifications to existing plant power facilities were examined.
         The power outputs examined ranged from 1.9 MW to 8.8 MW net for the base
case analyses.       In support of financial sensitivity analyses, some preliminary
investigations were done for facilities sized up to 30 MW. Cogeneration of steam was a
very significant design factor for the two palm oil mills and played a lesser role for the
other facilities. In general, the studies found relatively few technical or environmental
obstacles.
         In base case analyses, the financial viability of the facilities was mixed. Three of
the facilities identified (Sommai, Sanan Muang, and Thitiporn Thanya rice mills)
surpassed the financial IRR hurdle of 23 percent in the base case analyses. Black &
Veatch investigated alternative scenarios aimed at improving the financial rating of the
other facilities. These studies, which are preliminary in nature, indicate that several
factors could change to raise the IRR above 23 percent for these projects. In some cases,
such as simply accounting for the value of cogenerated steam at the Chumporn Palm Oil
Mill, the improvement in IRR can be dramatic and is compelling from an investment
standpoint.
         The results of the studies for each site and owner reaction to the studies are briefly
discussed below.


    Sommai Rice Mill Co., Ltd.
        A new power facility was studied at the Sommai Rice Mill Co., Ltd. located in
Roi Et. After an expansion that would raise the facility milling capacity to 1,300 tonnes
of paddy per day, it is estimated that 100,000 tonne/year of rice husk could be available
for power production. The proposed rice husk power plant would have a gross output of
10.0 MW (8.8 MW net). The feasibility study concludes that the proposed development
is technically, environmentally, and financially viable (IRR of 32.6 percent).
        The study results were presented to the facility owner who decided to pursue
further project development. The development is proceeding well as a joint venture
between Sommai and EGCO (Electricity Generating Plc.), and has reached the step at
which a contractor is being selected to provide engineering, procurement, and
construction services for the project.


 Sanan Muang Rice Mill Co., Ltd.
     A new power facility was studied at the Sanan Muang Rice Mill Co., Ltd. in
Kamphaeng Phet. Rice husk from the 250 tonne paddy per day mill would be


November 25, 2011                           2-10                                 Final Report
supplemented with husks from five other area mills. Total husks available for power
production are estimated to be 79,000 tonne/year. The proposed power plant would have
a gross output of 9.1 MW (8.0 MW net). The study concludes that the proposed
development is technically, environmentally, and financially viable (IRR of 25.5 percent).
        The study results were presented to the facility owner. The owner is interested in
further project development through a joint venture with other interested investor(s).


   Thitiporn Thanya Rice Mill Co., Ltd.
        A new power facility was studied at the Thitiporn Thanya Rice Mill Co., Ltd.
located in Nakorn Sawan. Rice husk from the 500 tonne paddy per day mill would be
supplemented with husks from seven other area mills. Total husks available for power
production are estimated to be 79,000 tonne/year. The proposed power plant would have
a gross output of 9.1 MW (8.0 MW net). The study concludes that the proposed
development is technically, environmentally and financially viable (IRR of 26.4 percent).
        The study results were presented to the facility owner who is interested in further
project development through a joint venture with interested investor(s). However, the
owner has exhibited some hesitancy since the plant would depend on outside fuel sources.


    Plan Creations Co., Ltd.
        A new power facility was studied at the Plan Creations Co., Ltd. parawood
processing plant located in Trang. Only about 4,000 tonne/year of wood waste would be
available from the facility. Additional residues could be obtained from other area mills
and a large forestry residue collection operation. Total wood waste would be about
134,000 tonne/year, which is sufficient to power a facility with a gross output of
10.0 MW (8.8 MW net). The feasibility study concludes that the proposed development
is technically and environmentally viable, but financially marginal (IRR of 7.95 percent)
in the base case analysis. If a larger facility could be built, the project may be more
viable. Black & Veatch investigated the economics at a plant size of 28 MW and found
that the IRR would increase to 38.5 percent at this size. The owner was presented the
study results but is interested in implementation of a small (about 2 MW) system at the
site. At present the owner is soliciting project price information from a vendor.


   Chumporn Palm Oil Industry Plc.
        Power facility modifications were studied at the Chumporn Palm Oil Industry Plc.
palm oil mill located in Chumporn. Preliminary technical and economic analysis found
that combustion of additional fuels using existing equipment for power generation up to
3.7 MW is viable. The fuels used include facility wastes of palm shell, fiber, and empty
fruit bunch (EFB); biogas produced by the processing facility; and coconut husk and
additional palm shell procured from the surrounding area. In addition, modifications to
the facility to allow greater power production were studied. The configuration selected


November 25, 2011                          2-11                               Final Report
utilizes a low pressure condensing turbine to capture and generate power from the exhaust
of the existing back pressure steam turbine, a condenser to recover turbine and process
exhaust steam, an improved makeup water treatment system, and other modifications.
The average gross plant output under this configuration would be approximately 5.4 MW
(3.0 MW increase over the current capacity).
        The feasibility study concluded that the proposed development is technically and
environmentally viable, and financially viable under certain conditions (base case IRR of
20.4 percent). The new power plant will allow CPOI to operate at a higher palm oil
production capacity because of increased steam cogeneration. It was found that inclusion
of this benefit would make the project very attractive financially (IRR ranging from 39 to
69 percent for steam value of 5 to 15 US$/tonne, respectively).
        Study results were presented to the facility, who generally concurred with the
study but expressed some concern over recent fluctuations in the price of outside
supplementary fuel. The facility would like to expand their processing capabilities in the
near future. This will likely require some sort of upgrade to the power and steam
systems.


   Karnchanaburi Sugar Industry Co., Ltd.
        Power facility modifications were studied at the Karnchanaburi Sugar Industry
Co., Ltd. located in Uthai Thani. The sugar mill currently operates a cogeneration facility
with a maximum gross electrical output of 17.5 MW. Depending on the steam needs of
the sugar mill, there is unused and unsold electrical capacity averaging about 455 kW at
the plant. In addition, excess bagasse and/or supplemental corncobs could be burned in
the off-season to provide power to the grid on a firm basis. The combination of the
excess existing power production, excess bagasse fuel, and supplemental corncob fuel can
provide a total of 1,850 kW net (capacity factor: 53.2 percent). Minor plant modifications
and new equipment additions would be required. The feasibility study concludes that the
proposed development is technically and environmentally viable, and financially viable
under certain conditions (IRR of 18.9 percent). Additional analysis found that increases
in sugar milling efficiency would allow enough bagasse to be produced so that
combustion of supplemental corncob fuel would not be required. The IRR under this
scenario increases significantly to 27.5.
        Study results were presented to the facility owner who is interested and agreed to
further development.


  Woodwork Creation Co., Ltd.
       A new power facility was studied at the Woodwork Creation Co., Ltd. parawood
processing plant located in Krabi. A total of 31,680 tonne/yr of wood residue will be
available at the facility after an upcoming expansion. In the base case analysis, a small
amount of fuel from the surrounding are is used, bringing the total fuel consumption to


November 25, 2011                          2-12                               Final Report
54,000 tonne/year and allowing a plant with a gross output of 3.55 MW (3.1 MW net).
The analysis for this case was financially marginal (IRR of 4.4 percent). If a larger
facility (about 30 MW) could be built at the site or in the area, more favorable economics
would be achieved. Black & Veatch estimates an IRR of 25 percent that at this size,
subject to the assumptions presented in the full report. The study results are under further
consideration by the owner.


   Mitr Kalasin Sugar Co., Ltd.
        A new power facility was studied at the Mitr Kalasin Sugar Co., Ltd. sugar mill
located in Kalasin. The high pressure boiler for the proposed power plant would be
fueled with 76,000 tonne/yr of excess bagasse produced by the sugar mill. The new
power plant would have a gross output of 6.1 MW (5.6 MW net) and would operate year-
round. The existing power facility (16.4 MW gross) would remain and would supply the
processing operations with the required steam and power. The feasibility study concludes
that the proposed development is technically and environmentally viable, but financially
marginal (base case IRR of 13.3 percent). An alternative option utilizes the existing
equipment with minor additions and modifications to produce about 3.2 MW. This
preliminary option has a much higher IRR of 46 percent. Both options were presented to
the facility, which is considering further development.


   Liang Hong Chai Rice Mill Co., Ltd.
        A new power facility was studied at the Liang Hong Chai Rice Mill Co., Ltd.
located in Khon Kaen. Liang Hong Chai owns two rice mills that together could supply
approximately 33,000 tonne/yr of rice husk for power production. This level of residue
would allow a power plant of 3.8 MW gross (3.3 MW net). At this size, the financial
feasibility of the site is marginal (IRR of 7.6 percent). If a larger facility (about
13.4 MW) could be built at the site, more favorable economics would be achieved. Black
& Veatch estimates an IRR of 29 percent that at this size, subject to assumptions
presented in the full report. The study results are under further consideration by the
owner.


   Southern Palm Oil Industry (1993) Co., Ltd.
        A new power facility was studied at the Southern Palm Oil Industry (1993) Co.,
Ltd. mill located in Surat Thani. The boiler for the proposed power plant would be fueled
with fiber, shells, and biogas produced by the processing facility. The power plant would
have a gross output of 7.0 MW (6.2 MW net) and would generate process steam. The
existing power facility (880 kW) would remain and would be used for backup purposes.
The feasibility study concludes that the proposed development is technically and
environmentally viable, but financially marginal (IRR of 11.6 percent) in the base case.



November 25, 2011                          2-13                               Final Report
        However, due to increased steam production, the new power plant will allow
SPOI to operate at a higher palm oil production capacity. If this benefit is included in the
financial analysis and a larger plant size (28.3 MW) is assumed, significantly higher
financial returns are attainable. Black & Veatch estimates that IRR of about 25 percent
are possible under this scenario.
        The study results were presented to the facility owner. Although the financial
performance of the power project is marginal under base case assumptions, the facility
would like to expand their palm oil processing capabilities in the near future. This will
likely require some sort of upgrade to the mill power and steam systems.

2.6 Promotion of Biomass in Thailand’s Energy Future
       As discussed previously, the percent of biomass capacity in the SPP program is
small and mostly contracted on a non-firm basis. Black & Veatch feels that there are
several reasons for this relating to the current SPP program regulations (dated
January 1998) and other factors.

2.6.1 Black & Veatch Comments on the SPP Program Regulations
      The present SPP regulations for biomass were established for payment of capacity
and energy based on the long-term avoided cost of electricity from a fuel oil plant.
However, biomass plants cannot be economically competitive on this basis:
       Due to dispersed fuel, most biomass plants are small (about 5-30 MW)
          compared to fuel oil based plants. Thus, the capital cost per megawatt of a
          biomass power plant is usually higher than that for fuel oil power plants.
           The fixed rate for the energy payment is based on the net plant heat rate for a
            combined cycle power plant, which is 9,070 kJ/kWh (8,600 Btu/kWh). Even
            with leading edge technology, biomass plants cannot achieve this level of
            efficiency and are thus less competitive.

2.6.2 Other Factors Impacting Biomass Project Development
        Owing to the existing regulations and other factors, very few biomass power
plants have sold electricity to the grid through firm contracts. Other reasons for the lack
of biomass-based power generation in Thailand include:
           Energy prices do not reflect external social costs such as air pollution, carbon
            dioxide emissions, socioeconomic impacts, fuel imports, etc.
           Investors or lenders would like to minimize biomass fuel supply risk simply
            by establishing long term supply contracts, but these are very difficult to
            achieve. Alternative methods of risk management are often not explored.
           Host facilities are often not familiar with the power generation business and
            are wary of making large investments in businesses outside their core
            experience.


November 25, 2011                          2-14                               Final Report
          In addition to relatively high specific capital costs, development costs for
           biomass plants are similar to larger plants, even though the capacities are
           much smaller.
       The combination of high up-front capital costs, unfamiliar technology, and
unmanageable fuel supply risk, makes financing of biomass projects more difficult and
expensive than conventional energy plants. The result is that those plants that are built
may not be able to produce electricity at rates as low as conventional technologies.

2.6.3 Incentives
       A variety of incentive measures have been implemented around the world to
encourage biomass and other renewable energy sources. Beyond direct increases in
capacity and energy prices, Thailand should examine several measures:
        Set a target for biomass and other renewable power plant generating capacity
            for the next 10 years.
          Establish a competitive subsidy scheme to encourage development of new
           renewable energy power plants.
          Promote marketing of biomass and other renewable energy sources as
           “green” energy to encourage public support of projects.
          Collaborate with specific high potential industries (e.g., sugar cane milling) to
           promote higher efficiency plants and expanded biomass power generation.
           Investigate alternative funding mechanisms to provide long-term loans with
            low interest rates to biomass projects.
        Any incentive offered should be cognizant of the liberalization of the electricity
supply industry and flexible enough to respond to changing market conditions.
        NEPO has begun a successful campaign to promote renewable energy. This effort
will be further strengthened by the recent commissioning of an initiative to subsidize up
to 300 MW of renewable energy projects through the Energy Conservation Promotion
Program (ENCON) fund. The capacity, which will be bid on a competitive basis, will be
an important step to further the long-term energy policy goals of Thailand.




November 25, 2011                         2-15                                Final Report
                                  3.0 Introduction

        This Final Report has been prepared by Black & Veatch according to the Terms of
Reference (TOR) for the “Biomass-Based Power Generation and Cogeneration Within
Small Rural Industries” study commissioned by the National Energy Policy Office
(NEPO) of Thailand. NEPO is promoting the use of biomass, such as wood waste,
bagasse, rice husks, and oil palm residues, as fuel for electricity and steam production in
small rural industries. The benefits of this policy include reduction of petroleum imports,
conservation of natural resources, and strengthening of rural economies. Under the Small
Power Producers (SPP) program, electricity generated by such plants can be sold to the
Electricity Generating Authority of Thailand (EGAT). NEPO has commissioned Black &
Veatch to perform a study of biomass power and cogeneration projects and to prepare this
Final Report to summarize the results of the project. This report presents many aspects
related to biomass energy and includes summaries of ten biomass power plant feasibility
studies done for sites around Thailand.
        This section of the report provides a description of the study objective, scope of
work, and approach. The section also includes a brief overview of biomass energy.

3.1 Study Objective

       The ultimate objective of this study is to develop biomass-based power generation
as a source of electricity in Thailand. Using biomass agricultural residues in power
generation and cogeneration schemes have the benefits of helping the involved facility to
be self-sufficient in meeting its own electricity and process heat demands, while
eliminating the problem of waste disposal. Developing the biomass energy resource will
also benefit Thailand’s economy because it helps the country to become less dependent
on imported fossil fuels. The specific goals of this study are as follows:
                To review the existing status of biomass fuels in Thailand.
                To conduct feasibility studies on 10 small rural industries in
                   order to assess their potential for biomass-based power
                   generation and cogeneration.
                To demonstrate the financial viability of biomass-based power
                   generation or cogeneration at the facilities in order to
                   encourage investment decisions of the owners towards
                   implementing the projects.
                To assist the facilities to implement power generation and
                   cogeneration, and to enter EGAT’s SPP Program.

3.2 Study Scope of Work
      This subsection details the scope of work for the project.




November 25, 2011                          3-1                                Final Report
3.2.1 Task Details

Task 1 – Data Collection and Prefeasibility Study
1. Review the existing status of biomass fuels in Thailand, including types, availability,
   production rates, forecasts, and the specific industry involved. Review the potential
   of each type of biomass resource for electricity generation, the prices of each type of
   biomass resource in the existing market, and other uses of the biomass resources.
   Geographical location of the biomass resources is also important.
2. Gather background information regarding the existing small rural industries
   producing agricultural residues which can be used as biomass fuels in Thailand.
   Review technical aspects of the industries including the process energy requirements
   and energy consumption. Review the standards and regulations of the Small Power
   Producers Program.
3. Locate a minimum of 10 facilities which have potential for biomass-based power
   generation or cogeneration. Touch base with personnel of the identified facilities in
   order to initiate a working relationship.
4. Develop a Memorandum of Understanding (MOU). The MOU will commit the
   facility owners to pursue project implementation if the project provides to be
   commercially viable. The Consultant should seek to sign MOUs with 10 facilities.
   Projects with MOUs will have the highest priority for subsequent feasibility studies.
5. Conduct detailed data collection of the 10 facilities which have signed MOUs. This
   may include field surveys of the actual site. The data collected in this step will be
   used in the detailed feasibility study of Task 2, therefore the data should include
   technical, economic, and ecological information.
6. Evaluate the collected data and make preliminary assessment of biomass-based power
   generation and cogeneration in specific small rural industries. Complete other
   appropriate pre-feasibility tasks.
7. Compile a list of local and/or foreign suppliers of biomass-based power generation
   and cogeneration equipment. Locate contractors capable of installation of the
   equipment. Obtain prices of the equipment, installation costs, operations and
   maintenance costs, etc.

Task 2 – Feasibility Study
        The tasks to be undertaken are identical for each of the 10 small rural industries
which are capable of implementing biomass-based power generation or cogeneration
projects and have signed MOUs. A project to be suitably evaluated is the to be placed
within the system to which it belongs, and therefore, the evaluation is to consider the
interrelationships of the project and the other natural and socioeconomic components of
the project system. The basic components of a detailed feasibility study are:
1. Technical Feasibility: Determine the present status and future prospects of the local
    technological capacity, and requirement for foreign technology. Conduct preliminary


November 25, 2011                          3-2                               Final Report
     designs. Assess human and material requirements. Evaluate topographical and
     geological conditions, etc.
2.   Economic Feasibility: Establish costs and benefits related to the project from an
     overall economic and social point of view. Assess indirect effects and evaluate the
     project economic attractiveness.
3.   Financial Feasibility: Establish costs and benefits related to the project from the point
     of view of the beneficiary of the project. Assess the financial attractiveness through
     the use of financial indicators. Establish a financing plan for the project. Assess the
     past financial performance of the beneficiary of the project and potential for future
     sound financial performance.
4.   Commercial Feasibility: Assess the status and prospects for the project product(s) to
     meet demands of the current market. Survey the suitability of commercial systems for
     distribution of the project product(s), and of the systems to supply raw materials and
     other inputs.
5.   Socioeconomic Feasibility: Evaluate the effects of the project with regard to the
     society involved, for instance creation or reduction of employment, etc.
6.   Ecological Feasibility: Asses the impacts and benefits of the project to the ecological
     environment. Check standards on ecological pollution.
7.   Juridical Feasibility: Check existing laws and other juridical constraints, and
     obligations favoring (or discouraging) the development and operation of the project.
8.   Political Feasibility: Evaluate the regional and sectoral planning, policy, and
     objectives. Determine whether the project implementation is consistent with relevant
     sectoral/energy policies.

Task 3 – Assist Facility Owners to Invest in Biomass-Based Power Generation and
Cogeneration
        Once biomass-based power generation and cogeneration has proved to be feasible,
the next step is to assist the facilities to implement the project. The details of this work
are as follows:
1. Present the results of the feasibility studies to the respective facility owner. The
    presentation should emphasize how implementing cogeneration can help the owners
    save operation costs by producing electricity on-site and negating the cost of
    disposing biomass residue.
2. Demonstrate the commercial viability of implementing biomass-based power
    generation and cogeneration to the facility owners. This includes briefing the owners
    on EGAT’s SPP Program, and how owners can sell excess electricity back to the grid.
    Substantial economic and financial data should be presented to the owners in order to
    persuade them to invest in cogeneration projects are their facilities.
3. Produce a handbook for facility owners in Thai and English explaining the procedure
    for entering EGAT’s SPP Program, including all relevant implications concerned such



November 25, 2011                            3-3                                Final Report
   as commercial and juridical aspects. The handbooks should also identify financing
   sources for the project implementation.

3.2.2 Activities by Task
        This section describes the task activities undertaken by Black & Veatch
(corresponding sections of this report are given to the right of the task title). Details on
these tasks are provided in the Detailed Work Plan and Methodology document prepared
by Black & Veatch.
Task 1    Data Collection and Prefeasibility Study
          Black & Veatch collected data and conducted prefeasibility studies to identify
          potential fuels, facilities, and technology for biomass-based power generation
          or cogeneration. The following subtasks were performed.
Task 1.1 Status of Fuel Supply                                                    Section 4
         The existing status of biomass fuels in Thailand was reviewed. Fuels reviewed
         included rice husk, palm oil residues, bagasse, wood residues, corncobs,
         cassava residues, distillery slop, coconut residues, and sawdust. Availability,
         location, production rates, forecasts, industries involved, prices, and the general
         suitability of the fuel for power production were assessed.
Task 1.2 Identification of Candidate Facilities                        Section 6 and 12
         Candidate industries and specific facilities with good potential for biomass
         power generation were identified (Section 6). Such facilities included rice
         mills, sugar mills, palm oil mills, etc. This task also reviewed the regulations
         and requirements of the SPP program (Section 12).
Task 1.3 Screening of Candidate Facilities                                 Section 6
         A screening approach was used to select ten preferred facilities for further
         analysis. A key consideration in light of the economic crisis was owner
         willingness to proceed with the project.
Task 1.4 Development of a Memorandum of Understanding                               Section 7
         A generic Memorandum of Understanding (MOU) was developed. The MOU
         commits facility owners to pursue project implementation in the event the
         project proves to be financially viable. An MOU was signed with each of the
         ten selected facilities and is included with the site feasibility studies.
Task 1.5 Detailed Data Collection for Selected Facilities                  Section 8
         Site visits followed by continued dialog were used to collect data from the
         selected facilities for use in the feasibility studies.
Task 1.6 Preliminary Assessment of Selected Facilities                        Section 9
         Black & Veatch made a preliminary evaluation of each of the biomass facilities
         based on data collected in Task 1.5. Topics covered generally included current
         operations, power potential, proposed facility features, environmental aspects,
November 25, 2011                           3-4                                Final Report
          socioeconomic aspects, economic aspects, and elevation and climatological
          data. In addition, a conclusion is provided for each of the preliminary
          assessments that indicates whether a full feasibility study of the proposed
          power plant is warranted.
Task 1.7 Identification of Candidate Technologies                              Section 5
         Technologies appropriate for biomass power plants were characterized. This
         characterization takes into account potential fuels and plant size range. A list
         of relevant equipment vendors was produced.
Task 2    Feasibility Studies
          Black & Veatch performed a feasibility study for each of the ten sites for which
          an MOU had been signed. The feasibility studies are available as separate
          documents. The feasibility studies consider the interrelationship of the project
          with all surrounding systems. The basic components of each feasibility study
          are:
                Technical Feasibility
                 Economic Feasibility
                 Financial Feasibility
                 Commercial Feasibility
                 Socioeconomic Feasibility
                 Ecological Feasibility
                 Juridical Feasibility
                 Political Feasibility
Task 3    Assist Development of Biomass-Based Power Generation
          Owners were given the results of their respective feasibility studies and then
          assisted in initial project implementation activities. The following subtasks
          were performed.
Task 3.1 Presentation of Feasibility Study Results to Facility Owners     Section 11
         Representatives of Black & Veatch made presentations to facility owners for
         each of the facilities found to be viable.
Task 3.2 Develop Owner Understanding of Project Benefits                   Section 11
         In addition to making the presentation above, Black & Veatch presented and
         explained the financial results of the project pro forma and the benefits and
         regulations of the SPP program to the facility owners.
Task 3.3 SPP Program Handbook Preparation
         Black & Veatch has prepared a handbook outlining the procedure for entering
         the SPP program, including all responsibilities and performance standards for
         the SPP. The Handbook itself is issued concurrently with the Final Report.



November 25, 2011                          3-5                               Final Report
3.3 Biomass Energy Overview
        Biomass has been used by human civilization as a primary energy source for more
than 1 million years. Today, about 12 percent of the world's energy comes from the use
of biomass fuels.4 In industrialized nations, bioenergy facilities typically use waste fuels
such as residue from pulp and paper production in large scale power and process steam
applications. Conversely, developing nations have largely relied on biomass to provide
fuel for rural cook stoves. These stoves are relatively inefficient and dirty. Increasing
industrialization and household income are driving the economies of developing nations
to implement cleaner and more efficient biomass technologies.
        Biomass is any material of recent biological origin. Biomass fuels include items
as diverse as residential yard clippings, manure, urban wood waste, and dedicated energy
crops. Compared to coal, biomass fuels are generally less dense, have a lower energy
content, and are more difficult to handle. With some exceptions, these qualities generally
make biomass fuels economically disadvantaged compared to fossil fuels.
        Environmental concerns may help make biomass an economically competitive
fuel. Unlike fossil fuels, biomass fuels are renewable and do not contribute to greenhouse
gas emissions. Biomass combustion releases no more carbon dioxide (CO2) than the
plant absorbed during its growing cycle and which would be released during the biomass
natural decay process. Fossil fuel combustion releases CO2 into the atmosphere that has
been stored for centuries under the surface of the earth. Biomass fuels contain little sulfur
compared to coal, resulting in decreased production of sulfur dioxide (SO 2). They also
have lower combustion temperatures that help reduce nitrogen oxide (NOx) emissions.
        However, unless biomass is efficiently and cleanly converted to a secondary
energy form, the environmental benefits are only partially realized, if at all. For this
reason efficient, modern biomass utilization must be favored over traditional applications.

3.3.1 Modern Biomass Applications
        Besides such simple changes as improved cook stoves, modern biomass
technology has many applications throughout the world. Three of these applications are
distributed generation, utility plants, and industrial cogeneration.

 3.3.1.1 Distributed Generation. There are many situations where the development
of small, modular distributed generators can be more economical than investing in
expensive transmission and distribution systems. One possible scenario is the use of an
anaerobic digester or biomass gasifier coupled with an engine-generator to provide gas,
heat, and electricity at the village scale.




4
    World Energy Council, “Renewable Energy Resources: Opportunities and Constraints 1990-2020,” 1993.

November 25, 2011                                 3-6                                   Final Report
 3.3.1.2 Utility Plants. For environmental reasons, utilities are increasingly looking
for renewable resources to add to their generation mix. Biomass is an attractive
renewable option because the technology is well understood and can be baseloaded,
unlike the intermittent output of solar and wind plants. Properly conceived, a biomass
plant can use waste fuels from the surrounding area that are available at low, zero, or even
negative cost (tipping fees). Fuels can consist of urban wood waste, agricultural residues,
and other waste fuels.

 3.3.1.3 Industrial Power Generation and Cogeneration. Many agricultural
processing and rural industries have large electrical and thermal demands and a ready
supply of biomass waste fuels. In many cases, these facilities can economically burn the
waste to met at least a portion of their electrical demand and possibly generate process
steam as well. Specific industries with potential include palm oil (Figure 3-1), sugar cane
milling, wood processing (Figure 3-2), and rice milling.
       Thailand, which has been an agrarian country for most of its history, has
widespread agricultural and rural industry that could benefit from modern application of
biomass technologies. Biomass energy use in Thailand is discussed in the next section.




                Figure 3-1. Fresh Oil Palm Bunch at a Thailand Palm Oil Mill.




November 25, 2011                           3-7                                 Final Report
                Figure 3-2. Harvesting of Rubber from a Parawood Plantation.


3.3.2 Biomass Energy in Thailand
        The use of biomass as an energy source is widely practiced throughout Thailand
industries, particularly in rural and agricultural areas. Out of 754 industries surveyed in
recent study, 71 percent still use fuelwood as a source of energy. 5 Figure 3-3 shows
industrial energy use and the amount of industrial energy derived from two biomass
types: fuelwood and agricultural residues. This figure also plots the fraction of total
industrial energy use derived from biomass sources.
        Use of biomass as an energy source has not been rising as fast as total industrial
energy use. For this reason, the share of biomass energy used in industrial processes has
steadily dropped from 46 percent in 1985, to 25 percent in 1996, despite averaging
8 percent annual growth over the period. Although overall industrial energy use declined
in 1997 with the financial crisis, use of agricultural and wood residues actually climbed,
increasing the share of biomass energy to 28 percent. The increase was nearly entirely
due to an almost 25 percent surge in fuelwood consumption. This increase in fuelwood
consumption underscores its importance as a locally available inexpensive fuel.




5
 Panyathanya, W., S. Rawiwan, S. Benjachaya, “A Survey of Industrial Fuelwood Consumption in
Thailand,” 1993.

November 25, 2011                           3-8                                Final Report
                     Figure 3-3. Industrial Energy Use in Thailand.6

        As Thailand’s economy recovers, the share of biomass energy used in industry is
likely to continue falling even though overall use of biomass as a primary energy source
will likely rise. In either case, biomass use could be reduced even while maintaining
electrical capacity growth if modern, efficient biomass energy conversion systems were
widely adopted. Properly implemented policy encouraging sustainable and efficient use
of biomass fuels will benefit Thailand in several ways. Benefits include reduced
dependency on foreign energy sources, strengthening of rural economies through creation
of local fuel markets and jobs, and addition of renewable baseload power with minimal
environmental impact. Regardless of policy, biomass will continue to be heavily relied
on in many industries such as sugar cane and palm oil milling.

3.3.3 Small Power Producers Program Overview
       Small rural industries engaged in power production from biomass may sell their
excess energy generation back to the electrical grid through the Small Power Producers
(SPP) Program. The SPP program was initiated by the National Energy Policy Council
and implemented by the Electricity Generating Authority of Thailand (EGAT),
Metropolitan Electricity Authority (MEA), and Provincial Electricity Authority (PEA).
The SPP program was initiated based on the conclusions of the National Energy Policy
Council that:

6
 Extracted from the Regional Wood Energy Development Programme in Asia (RWEDP) biomass energy
use database located at: http://www.rwedp.org/cgi-bin/consumptionQuery.pl.

November 25, 2011                           3-9                                Final Report
       “generation from non-conventional energy, waste or residual fuels and
       cogeneration increases efficiency in the use of primary energy and by-product
       energy sources and helps to reduce the financial burden of the public sector with
       respect to investment in electricity generation and distribution.”

        The national and external benefits of the SPP program include the conservation of
fossil fuels, reduced fuel imports, conservation of foreign hard currency, and distributed
generation benefits. The intent of the program is to realize these external benefits, yet
result in a direct cost to ratepayers that is no higher than the alternative of supplying
electricity without SPP projects.
        The SPP regulations establish several conditions for purchases from SPPs. These
include a purchased capacity limitation of 60 MW (up to 90 MW in certain locations) and
the stipulation that EGAT be the sole purchaser of electricity. Payments to the SPP can
consist of an energy-only payment for electricity delivered (kWh) or an energy and a
capacity payment. No capacity payments are made for contracts with a term of less than
5 years (“non-firm” contracts). In order to receive capacity payments (given under “firm”
contracts) the SPP must meet certain criteria (for example, contract length of 5 to
25 years, minimum hours of operation, etc.). Although capacity payments provide
substantial revenue to power projects, only three out of the 24 biomass projects accepted
so far into the SPP program receive such payments. All projects examined in this study
were designed from the outset to qualify for the capacity payments.
        Candidate SPPs must file applications for sale of power to EGAT and must
undergo evaluation to be certain the proposed project meets all terms of the SPP program.
Black & Veatch has prepared guidelines to assist developers and facilities entering the
SPP program. These are included in the Development and Construction Handbook of this
study, issued jointly with this Final Report.




November 25, 2011                            3-10                                 Final Report
   4.0 Thailand Biomass Fuel Resource Assessment (Task 1.1)

        This fuel supply review investigates nine types of biomass resources as potential
fuel for power and cogeneration plants:
           Rice husk
           Oil palm residues
           Bagasse
           Wood residues
           Corncob
           Cassava residues
           Distillery slop
         Coconut residues
         Sawdust
        This section of the Final Report provides updated information on the fuels and
draws conclusions concerning the viability of each biomass fuel. Availability,
distribution, production rates, forecasts, industries involved, prices, and the general
suitability of the fuels for power production are assessed and presented in the following
sections. The section starts with a general overview of the biomass fuel supply situation
in Thailand.

4.1 Fuel Supply Overview
        Thailand is a nation rich in agricultural and forestry resources that provide
potential sources for biomass fuel. This study attempted to identify viable biomass fuels
and quantify their attributes. Table 4-1 provides basic information on the most viable
fuels identified: rice husk, palm oil residues, bagasse, and wood residues (including
sawdust). Each of these fuels is associated with a particular industry where they are
produced as byproducts (rice milling, palm oil production, sugar cane milling and wood
products, respectively). Since the fuel is concentrated at the milling site, it is generally
inexpensive – transportation costs are avoided and the resource might otherwise represent
a disposal problem.
        The other fuels are not considered as viable for various reasons. Corncobs and
coconut residues are generally left scattered, making collection difficult. They are
suitable supplementary fuels but are not a significant source of energy for power
generation. Because of their high moisture content, cassava residues and distillery slop
are not likely to find widespread implementation as fuels.




November 25, 2011                           4-1                               Final Report
                                              Table 4-1
                                      Most Viable Biomass Fuels

                                                                  Palm Oil                       Wood
Fuel                                               Rice husk                      Bagasse
                                                                  Residues                      Residues
Source output, 106 tonne/yr                            20            2.2             50            5.8
Available unused residue, 106 tonne/yr a            2.3-3.7       0.41-0.74       2.25-3.5         1.8
Higher heating value, kJ/kg                          14,100        10,800          10,000        10,000
Fuel consumption, tonne/yr/MW b                       9,800        14,050          14,100        15,500
Aggregate power generation potential, MW            234-375         33-53         160-248         118
Notes:
    a
        Each biomass was estimated based on the following assumptions.
         Rice-husk –Based on rice mills of capacity minimum 100 tonnes of paddy/day.
         Palm Oil Residues – Based on the 17 crude palm oil extracting facilities. Residues consist
           of shells, fibre, and empty fruit bunch.
         Bagasse – Based on the 46 Sugar mills.
         Wood Residues – Included discarded processed wood and sawdust from general sawmills
           and parawood processing facilities and small logs from parawood plantation forest.
    b
        A uniform 85 percent capacity factor is assumed in this study.

       Aggregate power generation potential from all residues surveyed in this study
ranges from 779 to 1,043 MW. It should be noted that this value is for residues not
already in use and does not account for generation gains by increases in existing process
or power generation efficiency (e.g., sugar cane milling). As such, the estimates are for
incremental capacity and are slightly conservative. Figure 4-1 shows distribution of this
capacity in the various provinces. The most promising provinces account for about
300 MW of developable capacity and include Suratthani, Suphan Buri, Kanchanaburi,
Nakhon Sawan, Nakhon Ratchasi, Udon Thani, Kamphaeng Phet, Krabi, Trang, and
Nakhon Sri Thammarat.
       Similar fuel supply studies have been performed by other researchers and
organizations. These are compared in Table 4-2.7, 8 The results of these investigations
vary widely depending on three primary factors:
        Initial assessment of residue source production. Estimates can be based on
            crop production, which vary significantly from year to year.
               Amount of residue potentially available and ultimately suitable for economic
                power generation. Some fuels, such as palm oil residues, are concentrated at
                few sites and are thus easy to collect and highly suitable for power generation.
                Others, such as rice husk, are scattered over thousands of mills throughout the
                country and have alternative competitive uses. The viability of this fuel is
                highly site specific.



7
  EC-ASEAN COGEN Program, “Evaluation of Conditions for Electricity Production Based on Biomass,”
August 1998, available at: http://www.nepo.go.th/encon/encon-DANCED.html.
8
  Charles M. Kinoshita, et al, “Potential for Biomass Electricity in four Asian Countries,” presented at the
32nd Intersociety Energy Conversion Engineering Conference, 1997.


November 25, 2011                                  4-2                                       Final Report
     Figure 4-1. Aggregate Potential Net Electric Capacity from Most Viable Residues.



November 25, 2011                          4-3                                Final Report
                                         Table 4-2
                    Comparison of Thailand Biomass Fuel Supply Studiesa

                                                         Palm Oil                         Wood
Industry                              Rice husk                            Bagasse
                                                         Residues                        Residues
Source output, 106 tonne/yr           Rice paddy      Fresh fruit bunch   Sugar cane      Wood
  Black & Veatch (average)                20                 2.2             50            5.8
  EC-ASEAN COGEN                          22                2.25            50.5b         >17b
  Kinoshita, et al                        20                 <1              43             –
Residue produced, 106 tonne/yr
  Black & Veatch (average)                4.6               0.97            14.5           3.48
  EC-ASEAN COGEN                          4.8               0.95            14.6b        Unknown
  Kinoshita, et ala                       5.6               0.31            10.3            –
Available residue, 106 tonne/yrc
  Black & Veatch (average)                3.0               0.58            2.88           1.8
  EC-ASEAN COGEN Program                 0.79               0.95            14.6b        Unknown
  Kinoshita, et ala                      2.77               0.16            5.16            –
Potential power generation, GWh/yr
   Black & Veatch (average)              2,270              320             1,520          880
   EC-ASEAN COGEN                         400               350             5,700        Unknown
   Kinoshita, et al                      1,261               27              970            –
Capacity factor, percent
   Black & Veatch                         85                 85              85             85
   EC-ASEAN COGEN                         68                 63              29          Unknown
   Kinoshita, et al                       85                 85              30              –
Potential generation capacity, MW
   Black & Veatch (average)               305                43              204           118
   EC-ASEAN COGEN                          66                69             1,900          950
   Kinoshita, et al                       170                 4              370            –
Notes:
  a
     Values in italics are derived. Values in bold are assumed. All residue quantities from
     Kinoshita have been converted from dry-basis assuming moisture contents of 10, 30, and
     50 percent, for rice husk, palm oil residues, and bagasse, respectively
  b
     There is some uncertainty as to the number used to calculate to the power potential.
  c
     Different assumptions are used for residue availability. In general, B&V estimate is for
     residues readily collectible and not already in use, COGEN number is for residue
     “structurally” available, Kinoshita estimate is 50 percent of total production.


           Assumptions concerning power conversion efficiency, plant capacity factor,
            and operation profile (year-round or seasonal). These factors affect the
            potential energy production (MWh) and the associated plant capacities (MW).
       As an example of the differences that can arise, the specific case of bagasse-based
power generation, one of the most promising fuels, is examined. Black & Veatch
assumed that production of sugar cane, the source of bagasse, would average about
50 million tonnes per year. This assumption is based on the production target set by the
Thailand government. Actual production has varied from 37.8 to 58 million tonnes


November 25, 2011                               4-4                                    Final Report
(average 49.4) over the period from 1993 to 1999. Kinoshita assumed production of
43 million tonnes, whereas COGEN used the value for 1994/95 of 50.5 million tonnes.
The percent bagasse residue produced from the sugar cane was similar for the three
studies: 29, 24, and 29 percent for Black & Veatch, Kinoshita, and COGEN, respectively.
         The largest differences between the three estimates arise due to the assumptions
used to determine what percentage of the potential residue is ultimately available for
power production. Black & Veatch assumed that only those residues that are not used
currently at the mills would be available (about 20 percent of the total bagasse). This
estimate does not include upgrades of existing mills to higher efficiency power systems.
Kinoshita and COGEN assume that 50 and 100 percent, respectively, of total bagasse
supply could be used. These assumptions would require replacement or extensive
upgrades to a significant portion of the existing mill systems in Thailand.
         To determine the electricity generation potential from the available residues, an
energy conversion efficiency factor is applied. Black & Veatch estimates 527 kWh/tonne
bagasse (TB). This number is equivalent to a net plant heat rate of about 19,060 kJ/kWh
(LHV). Kinoshita and COGEN appear to use estimates of 190 and 333 kWh/TB,
respectively. For reference, the two sugar mills examined for this study currently have
very low conversion efficiencies of about 60 kWh/TB. The higher conversion efficiency
estimated by Black & Veatch is due to the assumption that the bagasse would be used in
dedicated (non-cogeneration) power plants built alongside existing mill systems, which
would be retained to meet process steam and power requirements. The new power
facilities would burn the excess bagasse produced by the mills. Such an arrangement
allows for year-round operation of the power plant to provide firm power to the grid. As
such, Black & Veatch assumed a capacity factor of 85 percent compared to about
30 percent used for each of the other two studies. Ultimately, this results in a smaller
estimate of new capacity of 204 MW for this study. The much higher COGEN program
estimate (1900 MW) is more indicative of the industry potential if most mill power
systems in Thailand are upgraded or replaced. The Kinoshita estimate (370 MW) lies
between the two extremes.
         Black & Veatch feels that, given observed reluctance of the sugar mill industry to
develop higher efficiency plants, the estimate prepared for bagasse-based power
generation is a realistic view of the near-term potential. To the extent that sugar mills
migrate towards higher efficiency equipment (which is advisable when plants are
established, relocated, or rehabilitated), the potential for power generation from bagasse
will increase. As there is tremendous potential in this industry, such a transition should
be encouraged.
         The following sections present data on availability, distribution, production rates,
involved industries, prices, etc., of nine biomass fuels: rice husk, oil palm residues,
bagasse, wood residues, corncob, cassava residues, distillery slop, coconut residues, and
sawdust.


November 25, 2011                           4-5                                Final Report
4.2 Rice Husk
        Rice is grown in every region of Thailand including the Southern region. Paddy
production over the period from 1986/87 to 1995/96 has averaged about 20 million tonnes
per year. Despite decreasing planted and harvested area and a strong dependence on
weather, production over the 5 year period from 1992 to 1996 was stable. The
government has targeted a 1 to 2 percent increase in production through increased yield
while maintaining nearly the same planted area.
        Rice husk is produced during paddy milling. Information on this resource is given
in Table 4-3. Based on milling statistics, rice husk constitutes about 23 percent of the
paddy weight. Potential residue availability by province is shown in Figure 4-2.
Assuming an annual paddy production of 20 million tonnes and a residue collectivity of
50 to 80 percent, the availability of this resource is estimated at 2.3 to 3.68 million tonnes
per year. Based on a heating value of 13,500 kJ/kg and the preceding assumptions,
aggregate power generation potential from rice husk ranges from 234 to 375 MW.
        Rice husk has been used as fuel for power plants in Thailand. There are currently
four power plants with the ability to burn rice husk accepted into the EGAT SPP program.
The total capacity of the plants is 66.8 MW. Some of the plants burn other biomass fuels
(e.g., wood chips) with the rice husk. Three of the plants are contracted to sell power to
EGAT on a firm basis. Plans to develop other rice husk based power plants have stalled
since the financial crisis began.
        Most of the 40,000 rice mills located in Thailand are small and are not suited for
power production from their own supply of rice husk. However, there are 215 mills with
capacities ranging from 100 to 2,000 tonnes of paddy per day. Five of these mills are


                                           Table 4-3
                                    Rice Husk Characteristics

Source industry                                       Rice mills, ~40,500 mills in country
Source of biomass                                                  Rice paddy
Source output, tonne/yr                                  20,000,000 (avg. 1986-1995)
Supply forecast                                     Slightly increase, 1 to 2 percent per year
Biomass production rate, percent of source                              23
In process use, percent of source                                   negligible
Total biomass supply, percent of source                                 23
Biomass collectivity, percent of supply                                50-80
Total biomass availability, tonne/yr                            2,300,000-3,680,000
Higher heating value, kJ/kg                                           14,100
Fuel consumption, tonne/yr/MW                                         9,800
Aggregate power generation potential, MW                             234-375
Price, Baht/tonne                                                     50-100
Other uses                                            Soil conditioner, fuel, brick making



November 25, 2011                             4-6                                     Final Report
                    Figure 4-2. Rice Husk Distribution.



November 25, 2011                  4-7                    Final Report
large and have capacities over 1,000 tonne/day. Because of the limited number of large
mills, it may be necessary to build central power plants fed with husks from several mills
in the surrounding area. This concept was shown to be technically and economically
feasible for two sites evaluated in this study: Sanan Muang, a 250 tonne/day mill, and
Thitiporn Thanya, a 500 tonne/day mill.
         In conclusion, in combination with appropriate technology and sufficient quantity,
rice husk is a viable fuel for power plants. Detailed study of specific sites and the
surrounding area is required to ensure adequate fuel supply and long-term availability.
         Additional information on rice husk as a potential biomass fuel is available in
Annex 1.

4.3 Palm Oil Residues
        Palm oil is produced throughout tropical regions of the world from oil palm trees.
In Thailand, oil palm trees are grown mainly in the Southern region in Krabi, Surat Thani,
Chumporn, and Satun. In 1995, about 886,000 rai were harvested producing 2.17 million
tonnes. Oil palm production has been increasing rapidly (22 percent per year over the
period form 1987 to 1995), and future annual growth rates are predicted to be 10 to 15
percent. This will be achieved through increased productivity and harvested area.
        Fresh fruit bunches (FFB) harvested from oil palm trees are the raw material for
the palm oil industry. FFB consist of fruit stems, commonly known as empty fruit
bunches (EFB), and fruits, which contain crude palm oil, fiber, and nuts. The nut portion
of the fruits contains a shelled kernel, which can be further processed to produce palm
kernel oil. Solid residues (EFB, fiber, and shells) account for about 44 percent of the FFB
weight. Properties of the solid residues are given in Table 4-4. Potential residue
availability by province is shown in Figure 4-3.
        In general, palm oil mills use the solid byproducts (primarily shells and fiber) of
the processing operations to provide steam to mill operations. The fuels are typically
burned in low pressure watertube boilers. Some mills also include back pressure steam
turbines for cogeneration of electricity and diesel generators for backup power
production. In general, production of steam and electricity is not given much economic
value by mill owners, and overall system efficiencies are poor. Biogas produced by
anaerobic treatment of mill effluents may be used as fuel, but this is not common practice.
In addition, oil palm trees at the end of their useful production life might be used as fuel.
These trees otherwise represent a disposal problem. There are no known power facilities
utilizing this resource.




November 25, 2011                           4-8                                Final Report
                                          Table 4-4
                      Palm Oil Residue (EFB, Fiber, Shell) Characteristics

Source industry                                                 Palm oil mills
Source of biomass                                             Fresh fruit bunches
Source output, tonne/yr                                        2,176,000 (1995)
Supply forecast                                         10 to 15 percent growth per year
Biomass production rate, percent of source          44 (EFB: 23-25; Fiber: 11-15, Shell: 6-8)
In process use, percent of source                                    10-20
Total biomass supply, percent of source                              24-34
Biomass collectivity, percent of supply                              90-100
Total biomass availability, tonne/yr                           470,000-740,000
Higher heating value, kJ/kg                               8,400-18,250 (avg. ~10,800)
Fuel consumption, tonne/yr/MW                                        14,050
Aggregate power generation potential, MW                             33-53
Price, Baht/tonne                                                    0-200
Other uses                                                         Fertilizer


         Assuming an annual FFB production of 2.2 million tonnes, the availability of this
resource is estimated at 470 to 740 thousand tonnes per year. Based on an average
heating value of 10,800 kJ/kg and the preceding assumptions, power generation potential
ranges from 33 to 53 MW. This figure does not include any contribution from biogas
produced by treatment of mill effluent, old age palm trees, or palm fronds. In addition,
the figure does not consider improvements to existing mill power systems.
         A study by Songkla University indicates that there are 52 palm oil mills in
Thailand. Of this number only about 20 percent have cogeneration systems, ranging from
less than 1 MW to 3.5 MW in electrical capacity. There are currently no palm oil mills
enrolled in the SPP program. A 40 MW plant was proposed, but plans did not materialize
after the financial crisis.
         In conclusion, palm oil residues are a proven fuel for cogeneration plants.
Cogeneration at new facilities, in addition to modernization and expansion of existing
facilities, appears viable. Combustion of EFB and other process residues will allow for
significantly larger plants that can benefit from economies of scale. Nevertheless,
detailed site-specific study is required to ascertain the viability of individual projects.
         Additional information on palm oil residues as a potential biomass fuel is
available in Annex 2.




November 25, 2011                             4-9                                   Final Report
                    Figure 4-3. Palm Oil Residue Distribution.



November 25, 2011                     4-10                       Final Report
4.4 Bagasse
        Bagasse is the fiber residue remaining after sugar cane has been processed to
remove the sugar laden juice. In Thailand, sugar cane is grown primarily in the Central
region with some production in the Northern and Northeast regions. Annual production
of sugar cane over the period from 1985 to 1996 was about 40 million tonnes. During
this period, production grew at an average rate of 13.7 percent per year. The government
has set a target annual production of 50 million tonnes. Sugar milling is seasonal and
only lasts 4 to 5 months. During the off-season, mill maintenance is performed.
        Sugar mills require large amounts of steam and electricity to process sugar cane.
Sugar mills burn bagasse to provide the steam for these operations. (Bagasse properties
and distribution are given in Table 4-5 and Figure 4-4, respectively.) The steam drives
cane shredders, mills, and other mechanical drive turbines. The steam is also passed
through back pressure turbine generators for cogeneration of electricity. Turbine exhaust
steam is used for sugar juice heating and evaporation. The high demand for steam and
large quantities of bagasse may result in excess electricity production. Fourteen sugar
mills have entered the SPP program to sell excess power to EGAT on a non-firm basis.
        Based on milling statistics, bagasse constitutes 28 to 30 percent of the cane.
Because of the large amount of bagasse used for steam and power supply, typically
7 percent of the cane weight remains as excess. Assuming an annual cane production of
50 million tonnes, the annual availability of this resource is estimated at 2.25 to
3.5 million tonnes. Based on a heating value of 10,000 kJ/kg, power generation potential
from the excess bagasse ranges from 160 to 248 MW. Significant additional capacity
could be obtained through upgrades of existing mill power systems.


                                           Table 4-5
                                     Bagasse Characteristics

Source industry                                                   Sugar mills
Source of biomass                                                 Sugar cane
Source output, tonne/yr                                     50,000,000 (as planned)
Supply forecast                                                     Stable
Biomass production rate, percent of source                           28-30
In process use, percent of source                                     23
Total biomass supply, percent of source                               5-7
Biomass collectivity, percent of supply                             90-100
Total biomass availability, tonne/yr                   2,250,000-3,500,000 (excess only)
Higher heating value, kJ/kg                                         10,000
Fuel consumption, tonne/yr/MW                                       14,100
Aggregate power generation potential, MW             160-248 (existing excess bagasse only)
Price, Baht/tonne                                                    0-150
Other uses                                      Production of medium density fiber board, fuel



November 25, 2011                             4-11                                 Final Report
                    Figure 4-4. Bagasse Distribution.



November 25, 2011                4-12                   Final Report
        Because it is viewed as a waste product, bagasse generally has low economic
value to mill owners in Thailand. For this reason, mill power systems are typically
inefficient and do not attempt to conserve bagasse. Mills can employ many methods to
increase bagasse production, and reduce steam and power requirements. These
approaches could allow a mill to build sufficient bagasse supply to operate a power plant
year-round and sell to EGAT on a firm basis as an SPP. (Alternatively, other fuels could
be burned during the off-season.) This approach is not currently taken. Although there
are fourteen sugar mills accepted into the SPP program, all are scheduled to sell power on
a non-firm basis. Contracted sales to EGAT total 70.5 MW.
        Various approaches can be taken to upgrade mills to allow for power export to the
grid. These range from simple upgrades to sell existing excess capacity to the grid (on-
season operation), to development of new central power plants with associated mill
processing improvements (year-round operation). The condition and age of existing mill
power equipment, as well as the willingness of the mill owner to invest capital in a power
project, is a strong factor in the approach taken. Options must be assessed at each site to
determine the most viable alternative. In general, improvements can usually be made.
        Additional information on bagasse as a potential biomass fuel is available in
Annex 3.

4.5 Wood Residues
        Wood residues include chips, bark, and sawdust produced within various wood
processing industries including sawmills, furniture factories, and other industries (e.g.,
toys, packing cases, crates, etc.). Excluding parawood from rubber tress, in-country wood
production in Thailand has decreased dramatically from about 2,000,000 m3 in 1988, to
35,000 m3 in 1995. The deficit has been made up with imports of raw saw logs and
processed wood. From 1991 to 1995, wood imports averaged about 3.7 million m3 or
2.6 million tonnes annually; processed wood was about 55 percent of total imports. A
major source of domestic wood is parawood from old age para-rubber trees. An IFTC
marketing study estimates that parawood production averages about 4.57 million m 3 or
3.2 million tonnes annually. Unlike the other wood resources, parawood production is
relatively stable. It is planted largely in the Southern region as shown in Figure 4-5.
        Processing of parawood, saw logs, and processed wood occurs at sawmills and
production plants and is accompanied by residue production of 30 to 60 percent (average
53 percent). There are more than 400 sawmills and 400 parawood factories in Thailand.
The aggregate properties of residues produced in these industries are given in Table 4-6.




November 25, 2011                          4-13                              Final Report
                                          Table 4-6
                                  Wood Residue Characteristics

Source industry                                         Sawmills, production plants
Source of biomass                                 Saw logs, parawood trees, processed wood
Source output, tonne/yr                                           5,800,000
Supply forecast                                                  Fluctuating
Biomass production rate, percent of source                       53 (average)
In process use, percent of source                                 negligible
Total biomass supply, percent of source                              53
Biomass collectivity, percent of supply                              60
Total biomass availability, tonne/yr                              1,836,000
Higher heating value, kJ/kg                                         10,000
Fuel consumption, tonne/yr/MW                                      15,500
Aggregate power generation potential, MW                            118
Price, Baht/tonne                                                  50-100
Other uses                                              Fuel, particle board, charcoal


        Based on a residue percentage of 53 percent and a collectivity of 60 percent, the
annual availability of this resource is estimated at 1.84 million tonnes. Based on a heating
value of 10,000 kJ/kg, power generation potential from wood residues is about 118 MW.
There are currently five power plants with the ability to burn wood residues accepted into
the EGAT SPP program. The total capacity of the plants is 120 MW. Most of the plants
burn other biomass fuels (e.g., rice husk, black liquor) with the wood. Two of the plants
are contracted to sell power to EGAT on a firm basis. The largest of the five is a 56.7
MW plant located at a paper mill. The plant is owned by Advance Agro, Plc.
        Wood combustion for power production is well understood. In the U.S., there is
about 7,000 MW of installed wood power capacity. However, in Thailand, alternative
uses compete strongly for wood residues. These include fuel for domestic heating and
cooking, charcoal production, and particle board production. Because of these alternate
uses, the fuel supply of any proposed power plant will have to be examined in detail.
        Additional information on wood residues as a potential biomass fuel is available
in Annex 4.




November 25, 2011                            4-14                                  Final Report
                    Figure 4-5. Parawood Residue Distribution.



November 25, 2011                     4-15                       Final Report
4.6 Corncob
        Corn plants are the source of corncob, which remains after the ear is milled to
remove the corn seed. Corn is grown mainly in the Northern region (about 48 percent),
with the remainder grown primarily in the Central and Northeast regions. Annual
production of corn over the period from 1986 to 1996 was about 3.88 million tonnes. The
government has set a target for increased corn production through increased planted area
and productivity. Accordingly, it is expected that production will increase at about
5 percent annually. Generally, corn is grown in two crops per year. The growing season
is 90 to 110 days.
        Corn is mostly milled using portable milling machines at locations around the
plantations. Thus, most of the residue (corncob) is left scattered in the field, posing
collection difficulty. A small portion is processed in milling shops located in provinces
that grow the crop. Based on milling statistics, corncob constitutes about 25 percent of
the corn seed weight. Further information on corncob as a potential biomass resource is
given in Table 4-7. Potential residue availability by province is shown in Figure 4-6.
        Based on a residue percentage of 25 percent and a collectivity of 50 percent, the
annual availability of this resource is estimated at 500,000 tonnes. Based on a heating
value of 15,000 kJ/kg, power generation potential from corncobs is estimated at 54 MW.
It is believed that there are currently no power plants burning corncob accepted into the
EGAT SPP program. However, there is a cogeneration plant fired with corncob in Lop
Buri. In addition, one of the sugar mills examined in this study has used corncobs a
supplemental fuel in the past. The corncobs were fed directly into the sugar mill boiler
without need for chipping or grinding.


                                          Table 4-7
                                    Corncob Characteristics

Source industry                                           Corn milling/agriculture
Source of biomass                                                  Corn
Source output, tonne/yr                                           4,000,000
Supply forecast                                          5 percent increase per year
Biomass production rate, percent of source                            25
In process use, percent of source                                 negligible
Total biomass supply, percent of source                               25
Biomass collectivity, percent of supply                              50
Total biomass availability, tonne/yr                               500,000
Higher heating value, kJ/kg                                         15,000
Fuel consumption, tonne/yr/MW                                       9,200
Aggregate power generation potential, MW                              54
Price, Baht/tonne                                                  300-400
Other uses                                             Furfuryl alcohol, fertilizer, fuel



November 25, 2011                            4-16                                   Final Report
                    Figure 4-6. Corncob Distribution.



November 25, 2011                4-17                   Final Report
        Based on experience with corncobs it appears to be a viable fuel. However,
collection of large enough quantities to support a central power plant would likely be
difficult and costly. The most likely role for corncobs will be as a supplementary fuel.
This concept was examined in the feasibility study for Karnchanaburi Sugar Industry Co.,
Ltd.
        Additional information on corncobs as a potential biomass fuel is available in
Annex 5.

4.7 Cassava Residues
        Cassava, the source of tapioca, is a bushy tropical plant producing starch-rich
tubers (the underground portion of the plant). In Thailand, cassava is produced mainly in
the Northeast region, with some production in the Central and Northern regions.
Production of cassava roots over the period from 1987 to 1995 has averaged about
20 million tonnes per year. Production has been decreasing slightly due to competitive
export market conditions.
        Cassava is processed to make to make two major products: tapioca pellets and
starch/flour. Approximately 75 to 80 percent of cassava production is exported (primarily
as pellets). The remainder is consumed in country. Direct use of cassava as fuel for
power generation is not economically viable because the present cost is too high
compared to other alternative fuels. However, production of tapioca starch produces
waste tapioca skin (peelings) and slurry that could be potential low cost fuels.
Information on these residues is given in Table 4-8. Based on milling statistics, slurry
production is about 30 percent of the raw cassava weight, while skin production is 5 to
10 percent. Potential residue availability by province is shown in Figure 4-7. Tapioca
starch factory capacity is about 7 million tonnes in terms of raw cassava. Based on this
level of production and a collectivity of 90 to 100 percent, total residue availability is
2.5 to 2.8 million tonnes per year.
        Laboratory tests of skin and slurry samples reveal that they have high moisture
contents of 67 and 83 percent, respectively. Dry heating values were measured at 15,100
and 15,500 kJ/kg, respectively. In order to utilize cassava residues as fuel, a moisture
separation or drying process would be necessary. This would imply additional cost and
overall efficiency loss. Based on a reduction in moisture content to 40 percent, it is
estimated that heating values would be around 9,150 kJ/kg. Using the residue availability
given above, power potential from this resource is estimated at 75 to 84 MW.




November 25, 2011                         4-18                               Final Report
                                           Table 4-8
                                 Cassava Residue Characteristics

Source industry                                              Tapioca starch factory
Source of biomass                                                  Cassava
Source output, tonne/yr                                            7,000,000
Supply forecast                                                      Stable
Biomass production rate, percent of source                  40 (Slurry: 30; Skin: 10)
In process use, percent of source                                  negligible
Total biomass supply, percent of source                                40
Biomass collectivity, percent of supply                              90-100
Total biomass availability, tonne/yr            2,520,000-2,800,000 (67-83 percent moisture)
Higher heating value, kJ/kg                          9,150 (dried to 40 percent moisture)
Fuel consumption, tonne/yr/MW                        17,100 (average at 40 percent moisture)
Aggregate power generation potential, MW                             75-84
Price, Baht/tonne                                       Slurry: 100-200; Skins: 250-300
Other uses                                     Slurry: alcohol, pellet admixture; Skins: fertilizer


       Slurry waste may be used for alcohol production or as an admixture for pellet
production. The skins are normally left to decompose as fertilizer. The prices of cassava
wastes vary by location and quantity available and range from 100 to 300 Baht/tonne.
Limited information is available on the use of cassava wastes as a boiler fuel. Because of
the high moisture content, the residues would require drying before use in a boiler. More
research is required to determine if such a scheme is feasible, both technically and
economically.
       Additional information on cassava residues as a potential biomass fuel is available
in Annex 6.




November 25, 2011                             4-19                                    Final Report
                    Figure 4-7. Cassava Residue Distribution.



November 25, 2011                    4-20                       Final Report
4.8 Distillery Slop
         Distillery slop (also known as spent wash, molasses distiller's solubles, dunder, or
stillage) is a waste product of liquor production from sugar cane molasses. Thirteen
distilleries are located throughout Thailand with the greatest concentration in the Central
region. Most of the distilleries have capacities of 12 to 16 million liters of 100 percent
alcohol per year, with one, located in Pathum Thani having a capacity of 56 million liters
per year. Total liquor production in Thailand has averaged 750 million liters (about
30 percent alcohol) recently. It is expected that production will increase slightly due to
the introduction of competition in the liquor industry.
         The properties of distillery slop are given in Table 4-9. Distribution throughout
the provinces is shown in Figure 4-8. Distillery slop consists of organic substances
including yeast, ammonia phosphate, and molasses residue. Because of the high organic
content, direct discharge of slop into waterways would pollute the water. Thus, distillery
slop requires treatment before disposal is allowed. Modern technology is available for
treatment and includes: evaporation followed by incineration, use of an upflow anaerobic
sludge blanket, and use of an upflow anaerobic sludge blanket followed by activated
sludge. However, these techniques are expensive for distillery owners to implement.
Current recommended practice for the disposal of distillery slop is to contain it in a
closely monitored evaporation pond. When the slop dries, it looks like a solid slurry and
can be used as fertilizer. In Thailand, there have been long term experiments on the direct
use of unconcentrated slop as fertilizer for rice paddy. Encouraging increases in rice yield
have been observed.


                                               Table 4-9
                                    Distillery Slop Characteristics
Source industry                                               Whiskey distillery factory
Source of biomass                                                        Whiskey
Source output, liter/yr                                                 750,000,000
Supply forecast                                                       Slightly increase
                                               *
Biomass production rate, percent of source                  48 (300 percent x 16 percent)
In process use, percent of source                                        negligible
                                           *
Total biomass supply, percent of source                                      48
Biomass collectivity, percent of supply                                   90-100
                                       *
Total biomass availability, tonne/yr                                  356,000-396,000
Higher heating value, kJ/kg*                                               15,500
Fuel consumption, tonne/yr/MW*                                             7,700
                                               *
Aggregate power generation potential, MW                                   46-52
Price, Baht/tonne                                               No commercial value
Other uses                                                         Fuel, fertilizer
*
Values are for concentrated distillery slop (1.35 percent moisture).



November 25, 2011                                  4-21                                   Final Report
                    Figure 4-8. Distillery Slop Distribution.



November 25, 2011                    4-22                       Final Report
        Production of each liter of liquor produces about 3 liters of distillery slop. Based
on an annual liquor production of 750 million liters, about 2,250 million liters of slop are
produced annually. However, due to high moisture content, the slop must be
concentrated before it can be used to fuel a boiler. It is estimated that about 16 percent of
the distillery slop would be available in a concentrated form suitable for use as fuel.
Thus, about 360,000 m3 of concentrated slop is available annually (approximately
396,000 tonne/yr). Assuming a nearly dry (moisture: 1.35 percent) heating value of
15,500 kJ/kg, power generation potential is estimated to be 46 to 52 MW. It needs to be
emphasized that this estimate is based on the indicated moisture content. In order to
utilize distillery slop as fuel, a moisture separation or drying process would be necessary.
This would imply additional cost and overall efficiency loss.
        At least one distillery is equipped with an evaporation and incineration process
that uses evaporated slop as fuel for incinerators. Slop produced in the distillation process
has a solids content of about 16 percent. The diluted slop is passed through an evaporator
system in order to concentrate the slop to a solids content of 60 percent. The concentrated
slop is then burned in the incinerators, which are initially heated using heavy oil. The
incinerators produce process steam for use in the distillery.
        As indicated above, distillery slop can be directly used as a fertilizer. In contrast,
use of slop as fuel for steam generation involves installation of expensive evaporation and
steam generation equipment. The amount of slop generated from one or two distillery
plants may not be sufficient to justify the economics of a power plant. Thus, the potential
for power generation for this resource does not appear viable.
        Additional information on distillery slop as a potential biomass fuel is available in
Annex 7.

4.9 Coconut Residues
        Coconut is grown in every region of Thailand but is concentrated in the Central
and Southern regions, which together produce over 90 percent of the total. Surat Thani,
Prachuap Khiri Khan, and Chumporn are among provinces with the highest production.
Coconut production over the period 1986 to 1995 has averaged about 1.4 million tonnes
per year. Production is relatively stable.
        Coconut is either directly consumed or used to produce coconut oil or milk. A
small fraction (less than 1 percent) is exported. Because of the variety of end uses,
processing of coconut is non-uniform. Generally, coconut fiber is a major waste product
and is peeled off by planters in order to reduce transportation costs. Merchants come to
buy the peeled coconut to sell to distributors who will sell to local markets and factories.
In certain areas, the coconut meat is extracted, chipped, and left to dry in the open air.
These chips are sold to factories to make coconut oil.




November 25, 2011                           4-23                                Final Report
                                          Table 4-10
                                 Coconut Residue Characteristics

Source industry                                 Coconut plantations, peeling shops and oil mills
Source of biomass                                                  Coconut
Source output, tonne/yr                                             1,400,000
Supply forecast                                                       Stable
Biomass production rate, percent of source                  47 (Fiber 35; Shell: 12)
In process use, percent of source                                  negligible
Total biomass supply, percent of source                                 47
Biomass collectivity, percent of supply                        Fiber: 60; shell 40
Total biomass availability, tonne/yr                                361,000
Higher heating value, kJ/kg                                     16,500 (average)
Fuel consumption, tonne/yr/MW                                         8,400
Aggregate power generation potential, MW                               43
Price, Baht/tonne                                          Fiber: 50; Shell: 500-800
Other uses                                       Fiber: furniture, fertilizer; Shell: fuel, carbon
                                                                     powder


        Coconuts are comprised of fiber (35 percent), shell (12 percent), meat
(28 percent), and juice (25 percent). Fiber, shell, and meat residue are the major coconut
residues. Meat residue after extraction of milk is relatively small. Fiber and shell
properties are given in Table 4-10. Distribution of the residues is shown in Figure 4-9.
Based on an annual coconut production of 1.4 million tonnes and assumed collection
levels of 60 percent for fiber and 40 percent for shell, residue availability is
294,000 tonne/yr and 67,200 tonne/yr, respectively. Based on an average heating value of
16,500 kJ/kg, estimated power generation potential is 43 MW.
        Common uses of coconut fiber and coconut shell are as stuffing material for
furniture components and as fuel and carbon powder, respectively.
        This review indicates that there is a potential for power generation using coconut
residues. However, collection of an adequate supply for a power plant may be difficult
because the residues are generally widely scattered. The residues may be more aptly used
as a supplemental fuel. To achieve sufficient economies of scale, a coconut oil factory or
group of factories could be a developer for this resource. However, suitability of this type
of supply needs to be studied in detail and on an area-specific basis.
        Additional information on coconut residues as a potential biomass fuel is available
in Annex 8.




November 25, 2011                             4-24                                     Final Report
                    Figure 4-9. Coconut Residue Distribution.



November 25, 2011                    4-25                       Final Report
4.10 Sawdust
        Sawdust is produced in wood sawing and milling activities. Section 3.4 indicates
that total wood processed in Thailand is on the order of 5.8 million tonnes per year. This
figure includes domestically produced wood, imported wood, and parawood from old age
rubber trees. Industries involved include sawmills and factories that make wood
products. Section 3.5 indicates there are more than 400 saw mills and more than
400 parawood factories in Thailand.
        No statistics were readily available to demonstrate sawdust availability. An
estimate was made based on observations of sawmill operations. A figure of 7 percent in
terms of weight of wood input is considered a reasonable estimate of the sawdust
generated. This number would vary significantly with the number of sawing operations
undergone by a particular piece of wood. Net availability is generally much less because
a significant amount is dispersed in the form of dust, perhaps more than 50 percent.
        Table 4-11 summarizes the potential for this biomass fuel. Based on a net
availability of 4 percent, and an assumed collectivity of 95 percent, this resource would
amount to about 220,400 tonne/yr. With a heating value of 10,300 kJ/kg, power
generation potential is about 16 MW. Distributed over the whole country, this potential is
not significant. Because of the limited quantities, dedicated sawdust fired power facilities
are not likely to be viable. However, sawdust could be easily burned with the other wood
wastes that are in relative abundance at wood processing facilities.


                                            Table 4-11
                                       Sawdust Characteristics
Source industry                                                  Wood products
Source of biomass                                                     Wood
Source output, tonne/yr                                             5,800,000
Supply forecast                                                    Fluctuating
Biomass production rate, percent of source                              7
In process use, percent of source                                       3
Total biomass supply, percent of source                                 4
Biomass collectivity, percent of supply                                 95
Total biomass availability, tonne/yr                                 220,400
Higher heating value, kJ/kg                                           10,300
Fuel consumption, tonne/yr/MW                                         13,400
Aggregate power generation potential, MW                                16
Price, Baht/tonne                                                     0-300
Other uses                                              Joss-stick, fuel, mushroom planting




November 25, 2011                               4-26                                 Final Report
           5.0 Identification of Candidate Technologies (Task 1.7)

         Worldwide experience indicates that biomass fuels can be successfully burned by
all of the major combustion technologies currently used in steam generation provided that
characteristics of the biomass have been properly evaluated and accounted for in the
design. This section discusses the various technology considerations as applicable for the
candidate facilities included in this project.

5.1 Biomass Fuel Concerns
        Compared to coal, biomass fuels are generally less dense, have a lower energy
content, and are more difficult to handle. In addition to these concerns, the ash of
biomass fuels usually has high levels of alkali components. The alkali components,
typically potassium and sodium compounds such as potassium oxide (K2O) and sodium
oxide (Na2O), cause the ash to remain sticky at a much lower temperature than coal ash.
This increased stickiness creates the potential for substantial slagging and fouling
problems, along with accelerated tube wastage. The ash of some biomass fuels is also
highly abrasive (notably rice husks).
        The problems associated with alkali materials in biomass vary widely between
different biomass fuels. To a certain extent, slagging potential can be determined by
analysis of fuel properties. However, the slagging tendency of a particular fuel cannot be
predicted from fuel properties alone. Boiler design and operating conditions (especially
temperature) have a large impact on the nature of deposits. Gasification of high alkali
fuels and subsequent combustion of the gas in the boiler may reduce ash deposition. The
success of this approach depends on maintaining gasification temperatures below
combustion temperatures. Temperatures of 1,400F (760C) and below have been shown
to significantly reduce deposition.9
         Common biomass fuels with the highest alkali contents are typically nut hulls, rice
and grain straws, and grasses. The hulls of rice and grains typically have a much lower
alkali content than the straw. Therefore, if a unit will only burn rice husks, some of the
design parameters applied to biomass fuels with much higher alkali material contents may
be relaxed. However, if any rice straw or other local biomass is likely to be included in
the fuel mix in addition to the rice husks, the design parameters discussed should be
strictly applied.

5.2 Thermochemical Conversion Options
       There are several proven conversion systems for burning biomass fuels. These
include the following:
        Mass burn stoker boilers.

9
    Thomas R. Miles, et al, “Alkali Deposits Found in Biomass Power Plants,” April 15, 1995.


November 25, 2011                                     5-1                                      Final Report
           Stoker boilers (stationary sloping grate, travelling grate, and vibrating grate).
           Bubbling fluidized bed boilers.
           Circulating fluidized bed boilers.
           Gasification with combustion in a close-coupled boiler.
           Pulverized fuel suspension fired boilers.

5.2.1 Mass Burn Stoker Boiler
         Mass burn stoker boilers offer very good fuel flexibility, but these units are
typically larger and more costly than the other types of boilers. This is because mass burn
units have historically been designed to burn unprocessed municipal solid waste (MSW).
MSW can vary significantly in size, heating value, and moisture content, and thus
requires special accommodations in the boiler design. Fuel flexibility and the ability to
accommodate a wide variation in fuel properties are generally not required for biomass
boilers.

5.2.2 Stoker Boiler
        Stoker combustion is a proven technology that has been successfully used with
biomass fuels (primarily wood) for many years. In the vibrating grate variety, fuel is fed
through the front wall of the boiler above the grate. Because most biomass readily
devolatilizes, much of the fuel burns in suspension above the grate. Unburned particles
and ash settle on the grate and protect it from the high combustion temperatures. The
vibration of the grate causes ash accumulated on the grate to move toward the discharge
end of the grate where it falls into the bottom ash collection and conveying system.
        Because stoker boilers have been in widespread use for many years, local
manufacturers and maintenance companies are available in many countries (including
Thailand). For this reason, capital costs for stoker boilers can be comparatively low.

5.2.3 Bubbling Fluidized Bed
        Combustion of biomass fuels in fluidized beds has been commercially applied for
more than 20 years. A bubbling fluidized bed consists of fuel, ash from the fuel, inert
material (sand), and possibly a sorbent (e.g. limestone) to reduce sulfur emissions. The
fluidized state of the bed is maintained by hot air flowing upward through the bed. The
air causes the bed material to rise and separate, and creates circulation patterns throughout
the bed. Because of the turbulent bed mixing, heat transfer rates are very high and
combustion efficiency is good. Consequently, combustion temperatures can be kept low
compared to stoker boilers. This reduces NOx formation and is an advantage with
biomass fuels, because they may have relatively low ash fusion temperatures. Low ash
fusion temperatures can lead to excessive boiler slagging.
        Due to the large amount of heat stored in the bed material, the bubbling fluidized
bed has the potential to accommodate a wider range of fuel heating values and moisture


November 25, 2011                             5-2                               Final Report
contents than the stoker boiler. This may make them an ideal choice for centrally located
power plants fed with several different biomass residues. However, despite the apparent
acceptance of bubbling bed technology, recent bubbling bed experience in Thailand is
somewhat discouraging.

5.2.4 Circulating Fluidized Bed
        Circulating fluidized bed units also offer a high degree of fuel flexibility and
would be a suitable technology for burning biomass. While early circulating fluidized
bed units were in the size range appropriate for most biomass plants (10-50 MW), present
circulating fluidized bed technology is focusing on fossil fueled units of 200 to 300 MW.
Although manufacturers quote small circulating fluidized bed units, these units generally
cost more than other combustion technologies, making them difficult to justify for
biomass plants. Additionally, on a recent 35 MW rice husk power project, one of the
major circulating fluidized bed suppliers declined to bid. The supplier stated that the
technology was not the best approach to burning rice husk or rice straw.

5.2.5 Gasification
        Another potential conversion option is gasification. Gasification is typically
characterized as incomplete combustion of a fuel to produce a fuel gas of low to medium
heating value. Gasification lies between the extremes of combustion and pyrolysis
(anaerobic thermal decomposition) and occurs as the amount of oxygen supplied to the
burning biomass is decreased. Combustible constituents in the fuel gas include methane,
carbon monoxide, hydrogen, and some higher hydrocarbons; inert constituents are
primarily nitrogen, carbon dioxide, and water vapor. Depending on the gasification
scheme used, the heating value of the fuel gas generally ranges between 3.7 and
7.5 MJ/Nm3 (100-200 Btu/scf) for direct gasifiers, and between 11 and 17 MJ/Nm3 (300-
450 Btu/scf) for indirect gasifiers. By comparison, natural gas has a heating value of
around 37 MJ/Nm3 (1,000 Btu/scf). Direct gasifiers have been used extensively
worldwide, including over 1 million small vehicles gasifiers used during World War II.
Most development effort is now focussed on generally higher efficiency indirect gasifiers.
        Gasification expands the use of solid biomass to include all the uses of natural gas
and petroleum-based fuels, giving it a distinct advantage over combustion. Besides
providing higher efficiency power generation through advanced processes, the fuel gas
can be used for the chemical synthesis of methanol, ammonia, and gasoline. Gasification
is also better suited for providing precise process heat control (e.g., for glass-making).
Energy conversion options for the fuel gas include close-coupled boilers, internal
combustion engines, gas turbines, and fuel cells. Of these, only close-coupled boilers are
considered technically mature for large scale applications.




November 25, 2011                           5-3                               Final Report
        There are only a few suppliers of proven gasification systems in the world. One
of the most successful fuels gasified is rice husk, which can be troublesome to combust
directly. Several rice husk gasifiers are located in Malaysia.

5.2.6 Conversion Options Conclusion
         Although stoker boilers are widely in use, they are not always the most
appropriate technical choice. For example, rice husks are most easily fired in fluidized
beds or gasifiers because the lower operation temperatures reduce the risk of slagging.
Stokers and suspension-fired units may also be used, but precautions should be taken to
minimize the slagging potential. Fluidized beds are good choices in general because they
can tolerate wide variations in fuel moisture content and size. Suspension firing is not
suitable for most of the biomass fuels (except rice husks) due to their higher moisture
contents and densities (which make them more difficult to be ground) compared to non-
biomass fuels. Gasification may be a suitable choice, but lacks widespread technical and
commercial acceptance. A comparison of the capital cost, ash characteristics and fuel
compatabilities of the various combustion technologies are provided in Tables 5-1, 5-2
and 5-3, respectively.
         Due to their widespread availability, relatively low cost, and reasonable
efficiency, stoker boilers were recommended for each of the new power facilities studied
in this report.



                                          Table 5-1
            General Technical Compatibility Ratings (L-Low, M-Medium, H-High)
                             for Various Fuels and Boiler Types
                                                    Boiler Type
                                                                            Pulverized Fuel
Fuel type                      Stoker               Bubbling Bed
                                                                           Suspension Fired
Rice husk                        M                       H                        M
Oil palm residues                 L                      M                        L
Bagasse                          M                       H                        L
Wood chip                         H                      H                        L
Corncob                          M                       M                        L
Cassava residues                 M                       M                        L
Distillery slop*                  L                      M                        L
Coconut residues                 M                       M                        L
*Assuming that the distillery slop has undergone an evaporation process.




November 25, 2011                             5-4                                 Final Report
                                        Table 5-2
            Steam Generator Technology Comparison for Different Plant Sizes
                                                       Boiler type
Plant Size1                             Stoker2    Bubbling Bed         Pulv. Fuel
                                                                       Susp. Fired
Gross: 3.4 MW Net: 3.0 MW

 Boiler cost (equipment only), $M3          3.6             4.30             4.20

 Balance of plant cost over base, $M         --             0.37             0.37

 Total cost over base, $M                    --             1.07             0.97

 Total cost over base, $/kWnet               --             357               323
Gross: 5.7 MW Net: 5.0 MW
 Boiler cost (equipment only), $M3          3.8             4.80             4.60
 Balance of plant cost over base, $M         --             0.50             0.50
 Total cost over base, $M                    --             1.50             1.30
 Total cost over base, $/kWnet               --             300               260
Gross: 8.0 MW Net: 7.0 MW

 Boiler cost (equipment only), $M3          4.0             5.30              5.00

 Balance of plant cost over base, $M         --             0.61              0.61

 Total cost over base, $M                    --             1.91              1.61

 Total cost over base, $/kWnet               --             272               229

Gross: 10.0 MW Net: 8.8 MW

 Boiler cost (equipment only), $M3         4.25             5.70              5.40

 Balance of plant cost over base, $M         --             0.86              0.86

 Total cost over base, $M                    --             2.31              2.01

 Total cost over base, $/kWnet               --             263               229
Notes
1. 12% auxiliary load assumed in calculating net output.
2. Stoker used as base plant for cost comparisons.
3. Values represent approximate costs for European supplied boiler and auxiliaries.




November 25, 2011                         5-5                               Final Report
                                      Table 5-3
              Steam Generator Technology Ash Characteristics Comparison
                                                Boiler type
                               Stoker                  Bubbling             Pulverized Fuel
                                                                           Suspension Fired
      Fly Ash:
Percent of total ash             40                       90                       90
Particle size                   Fine                     Fine                  Extra Fine
   Bottom Ash:
Percent of total ash            60                      Waste                      10
Particle size                  Coarse                   N/Aa                      N/Ab
a
  Bottom ash from bubbling fluidized beds may include scrap metal, rocks, agglomerated bed
material, etc.
b
  Bottom ash from pulverized fuel boilers may be gathered through either a wet or dry collection
system. Particle size is thus not applicable.


5.3 Emission Controls
        Emissions of concern from biomass plants include nitrogen oxides and
particulates (sulfur content of biomass is typically very low). Injection of urea or
ammonia (selective non-catalytic reduction) can be used to reduce nitrogen oxide
emissions, while electrostatic precipitators (ESP) or fabric filters (FF) can be used to
control particulate emissions.

5.3.1 Nitrogen Oxide Control
       The large majority of biomass boilers rely on selective non-catalytic reduction
(SNCR) for control of nitrogen oxide emissions. SNCR is a commercially available
technology to control NOx emissions from fossil fueled boilers. Rather than a catalyst to
achieve NOx reductions, SNCR systems rely on an appropriate reagent injection
temperature, good reagent-gas mixing, and adequate reaction time. SNCR systems can
use either ammonia (marketed as Thermal DeNOX systems) or urea (marketed as
NOxOUT systems) as a reagent. Ammonia or urea is injected into areas of the steam
generator where the flue gas temperature ranges from 1,500 to 2,200F. It is expected
that the SNCR system would achieve approximately 50 percent NOx reduction, with
ammonia slip between 10 and 15 ppmvd. Lower ammonia slip values can be achieved
with lower reduction capabilities.
        The major considerations for the NOx reduction potential of an SNCR system are
1) the boiler temperature profile, as a function of load, and 2) the geometry, which affects
reagent and flue gas mixing. The ideal temperature ranges from 1,500 to 2,200F based
on the inlet concentration of NOx. Injection above the high end of the temperature range
will result in increased NOx emissions. Hydrogen can be injected along with ammonia


November 25, 2011                             5-6                                 Final Report
(or additives to the urea reagent) to extend the effective range of the SNCR process down
to 1,300F. The specific geometry of each boiler dictates the positioning of reagent
injection lances to ensure relatively good NOx reduction performance with relatively low
ammonia slip.

5.3.2 Particulate Emissions Control
        A review of the United States Environmental Protection Agency database shows
that both ESPs and FFs have been used in biomass-fired power plants. A general review
of these two technologies is provided in this section.
        ESPs have several advantages over the FFs in biomass applications. ESPs have
low risk potential for fire while the bags in FFs are combustible to varying degrees
depending on the material of the bags. These bags can be set on fire by hot embers
carried over from the boiler. Typically, the ESPs have lower O&M costs since they
operate on lower pressure drop that relates to lower power usage by the fans compared to
the FFs. In addition, the ESPs do not have maintenance costs related to periodic bag
replacement that are inherent in the FFs. Black & Veatch has designed biomass fired
power plants that utilize ESPs as the emission control technology.
        FFs hold the advantages of potential capital cost savings and offer greater
flexibility in maintaining emission limits over a wide range of conditions compared to the
ESPs. The capital cost savings are realized in cases when the ash is difficult to collect,
the emission limits are strict, or the ash loading is large. These factors impact the ESP
sizing such that an ESP gets proportionally large as compared to an FF, which is
unaffected by these same parameters. The ESP must be designed for the worst fuel
analysis and flue gas conditions. The FF performance is not as sensitive as the ESP to
changes in operating parameters such as flue gas temperature and flow rate. These
parameters can adversely impact ESP performance to a significant extent.
        In summary, the ESPs and the FFs have advantages and disadvantages that may
favor their selection in a given application. The selection of the appropriate control
technology for a biomass project can only be made based upon a comprehensive
evaluation of the specific project design and economic analysis criteria.




November 25, 2011                          5-7                               Final Report
6.0 Identification and Screening of Candidate Facilities (Task 1.2
                           & Task 1.3)

        Section 4 and Section 5 of this report established the various biomass fuels and
technologies suitable for further study. Application of these fuels and technologies at
selected sites was investigated for ten facilities. The first step in this process was
identification and screening of candidate facilities, as discussed in this section.

6.1 Identification Process
         In parallel with the collection of agricultural biomass data, the study team
contacted various associations of agro-industries to make known to them this feasibility
study of the biomass fired power/generations sponsored by NEPO and conducted by
Black & Veatch. In the beginning, the associations contacted included Federation of Thai
Industries, Sugarcane Factories Association, Thai Rice Mills Association, and Tapioca
Factories Association. The intent was to seek interest of their members in pursuing
development of the biomass projects. The team also approached directly, either in person
or by correspondence, the selected agro-industrial firms or factories which appear to
generate large quantity of residues. The team also developed a questionnaire form for
the facility owners to indicate their interest in development of a biomass fired power plant
and to provide the biomass information. This questionnaire is attached in Annex 9.
         The initial site selection guidelines developed for identification of suitable
facilities include the following:
           Availability of biomass supply for power generation or cogeneration at each
            site.
           Biomass disposal concerns and the intention to develop a power plant.
           Capability of the facility owner(s) to develop the power plant.
           Experience of the facility owner(s) involving power plant development.

6.2 Screening of Candidate Facilities
         As it turned out, one of the most important aspects in initial site selection was
owner willingness to proceed with a power project. Because of the downturn in
Thailand’s economy, many facilities were uncomfortable with making large investments,
especially in power generation, a field that is outside of their regular business.
         For this reason, the study team had difficulty locating facilities interested in
proceeding with the study process. “Screening” to narrow the field of candidate facilities
to a manageable number was not formally practiced. Practically, facilities screened
themselves by either choosing to pursue this opportunity or to forgo it. Fortunately,
facilities making the decision to proceed were generally well suited for further study.




November 25, 2011                           6-1                               Final Report
         One of the first milestones in the process through which potential facilities could
advance to a candidate facility was the execution of a Memorandum of Understanding
(MOU) between NEPO, the facility owner/developer, and Black & Veatch. The purpose
of such an MOU is to have a facility-specific document which clearly illustrates the
interest of the facility in pursuing further facility development should the project be both
technically and commercially viable.
         With these criteria as a basis, a draft generic MOU was approved by NEPO for
use in early discussions with the potential facilities. A copy of the generic (non-facility
specific MOU) is attached in Annex 10. For further discussion of MOU development see
the next section.
         The study team eventually received signed MOUs from each of the following ten
facilities:
          Sommai Rice Mill Co., Ltd. Facility in Roi Et Province
          Sanan Muang Rice Mill Co., Ltd. in Kamphaeng Phet Province
          Thitiporn Thanya Rice Mill Co., Ltd. in Nakorn Sawan Province
          Plan Creations Co., Ltd. in Trang Province
          Chumporn Palm Oil Industry Plc., in Chumporn Province
          Karnchanaburi Sugar Industry Co., Ltd. in Uthai Thani Province
          Woodwork Creation Co., Ltd. in Krabi Province
          Mitr Kalasin Sugar Co., Ltd. in Kalasin Province
          Liang Hong Chai Rice Mill Co., Ltd. in Khon Kaen Province
          Southern Palm Oil Industry (1993) Co., Ltd. in Surat Thani Province

        Each of the ten facilities for which an MOU was obtained underwent preliminarily
assessment and was approved by NEPO as a Candidate Facility for further screening in a
feasibility study.




November 25, 2011                           6-2                               Final Report
7.0 Development of a Memorandum of Understanding (Task 1.4)

        Having identified potential sites and established a desire in the facility owners to
proceed with the study, the next step in the process was to develop a Memorandum of
Understanding (MOU) between the owner, NEPO, and Black & Veatch.
        In general, the MOU outlines the commitment that the owner intends to pursue
development of a biomass power facility if the feasibility study determines the proposed
facility to be technically, environmentally, and financially viable. The MOU generally
identifies the facility, outlines the essential technical requirements, and defines the
expected “successful” internal rate of return. Through execution of the MOU, it is
understood that NEPO is financing the study under the assumption that the facility owner
will pursue further development or, if this is not the case, then the facility will fund one-
half of the cost of the feasibility study performed for their proposed development unless
acceptable reasons notified to NEPO in writing. This last provision is an insurance
measure that the facility truly has the intent of moving forward with development of their
proposed facility in order for NEPO to fund the feasibility study, or will cover a portion
of the costs if they do not move forward with a technically and commercially viable
project.

7.1 Potential Project Owners
       There are three categories of people who might qualify as the “project owner” in
developing the project. These are described in the following sections.

7.1.1 Facility Owner
       Facility owners are the owners of biomass residues. A few facility owners could
proceed to develop a project by themselves, but some could not proceed for a variety of
reasons:
           Insufficient biomass residue created by their own processing facilities to fuel
            a plant of sufficient capacity to be economically feasible.
           Lack of experience in initiating and implementing projects of this type.
        Lack of financial support for the project.
       For these reasons, facilities owners may wish to cooperate with other biomass
suppliers in the area or may team with outside developers or advisors.

7.1.2 Developer
         Another possible role is one of a developer. Usually the developer has no
facilities that produce biomass residues but knows how to obtain financial support,
develop a procedure for project implementation, etc. The developer may join the facility
owners to form a project development team.



November 25, 2011                           7-1                                Final Report
7.1.3 Advisor
        Sometimes a project may be developed through a promoter or an advisor, who
normally has creditability to locate financing sources. Most developers or facility owners
usually have limited capital investment. In order to finance the whole project, they
usually have a financial advisor and developer (or facility owner) who can act as the
project owner/developer.

7.2 Generic MOU
         After review of the MOU relationship discussion submitted in the Detailed Work
Plan and Methodology, it was strongly recommended that one standard MOU be used for
each potential project. Black & Veatch believes a separate but standard form for each
facility will best protect NEPO’s interest in future commitments. By utilizing a separate
MOU for each facility, the process is simplified and the commitment is specific to a
potential facility. Therefore, if a developer is pursuing three potential facility
developments, but only one proves to be viable (as shown in the feasibility study results),
there is no doubt that the commitment for each facility stands on its own.
         A draft generic MOU was developed. This form has been set up to work for each
potential facility with only minor modifications needed based on the number of
developer/owner(s) and location of the potential facility.
         For each of the sites selected for full feasibility study, an MOU was executed prior
to commencement of study work.




November 25, 2011                           7-2                                Final Report
            8.0 Candidate Facility Data Collection (Task 1.5)

         Following identification and initial screening (Task 1.2 and 1.3) of prospective
facilities, Black & Veatch provided detailed data requests to facility owners. Data
requests were facility specific and were used to help Black & Veatch identify the optimal
configuration of the power facility, evaluate project feasibility, and identify other benefits
of the project. Of particular importance was the quantity of biomass fuel available to the
project, reliability of supply, and other characteristics of the fuel (heat content, ash and
moisture content, delivery methods, cost, etc.). When available, detailed historical data
from the facility owner was utilized to develop this information. Other relevant
information collected included process descriptions, plant layouts, maps, labor
requirements, cost of current waste disposal practices, cost of electricity purchases, need
for process steam, hours of facility operation, and plans for future expansion.
         In addition, Black & Veatch personnel visited each of the candidate facilities for
further data collection in support of making a preliminary assessment on project viability.
During the site visits, Black & Veatch personnel met with representatives of the candidate
facilities to discuss different aspects (technical, financial, environmental, and
socioeconomic) of the current plant operations and the proposed power project. Facility
tours were conducted after the discussions and photographs were taken of the facilities.
A field reconnaissance report was prepared summarizing the data collected.




November 25, 2011                            8-1                                Final Report
   9.0 Preliminary Assessment of Selected Facilities (Task 1.6)

        The first milestone indicating a mutual interest in developing the site for power
generation/cogenration is through signature of an MOU between NEPO, the facility
Owner/Developer, and Black & Veatch (see Section 6 of this report). Once this milestone
has been accomplished, a cursory review of the information included in the facility survey
questionnaire (consistency of quantity of fuel, quality of fuel, availability of supplemental
fuel, etc.) was performed. When review of this information indicated a favorable
potential for development, facility site visits were arranged to perform a preliminary
assessment of the selected facility. The assessment was accomplished through review of
the existing facilities, discussions with the staff, and gathering of other pertinent facility
information. These steps were followed and site visits were performed by Black &
Veatch personnel between February 1998 and April 1999 for the following ten facilities:
           Sommai Rice Mill Co., Ltd. in Roi Et Province
           Sanan Muang Rice Mill Co., Ltd. in Kamphaeng Phet Province
           Thitiporn Thanya Rice Mill Co., Ltd. in Nakorn Sawan Province
           Plan Creations Co., Ltd. in Trang Province
           Chumporn Palm Oil Industry Plc. in Chumporn Province
           Karnchanaburi Sugar Industry Co., Ltd. in Uthai Thani Province
           Woodwork Creation Co., Ltd. in Krabi Province
           Mitr Kalasin Sugar Co., Ltd. in Kalasin Province
           Liang Hong Chai Rice Mill Co., Ltd. in Khon Kaen Province
        Southern Palm Oil Industry (1993) Co., Ltd. in Surat Thani Province
       The resulting preliminary assessments for these ten sites were issued to NEPO.
Each preliminary assessment addresses the initial review of a facility’s potential for
power plant development or modification. Topics covered generally include current
operations, power potential, proposed facility features, environmental aspects,
socioeconomic aspects, economic aspects, and elevation and climatological data. In
addition, a conclusion is provided for each of the preliminary assessments that indicates
whether a full feasibility study of the proposed power plant is warranted.
       None of the ten assessments completed identified any obvious development
problems that would preclude further investigation in a feasibility study (although
potential difficulties were occasionally identified for further investigation). The ten sites
were fully investigated in feasibility studies as described in the next section of this report.




November 25, 2011                            9-1                                 Final Report
           10.0 Feasibility Study Summary Results (Task 2)

        In accordance with Task 2, Black & Veatch prepared a full feasibility study for
ten selected agro-industrial facilities. This section presents the facilities studied, structure
of the feasibility studies, general study assumptions, and the summary results of each
study.
        In general, the feasibility studies were performed using the best data available
from the sites. As not all facilities had detailed information readily accessible,
assumptions often had to be made to complete the studies. These assumptions are
identified in the individual study reports.

10.1 Facilities Studied
       As discussed in Section 8 of this report, preliminary assessments of the following
ten potential facilities resulted in the recommendation that these sites be considered
candidate facilities and be further investigated through a full feasibility study:
          Sommai Rice Mill Co., Ltd. Facility in Roi Et Province
          Sanan Muang Rice Mill Co., Ltd. in Kamphaeng Phet Province
          Thitiporn Thanya Rice Mill Co., Ltd. in Nakorn Sawan Province
          Plan Creations Co., Ltd. in Trang Province
          Chumporn Palm Oil Industry Plc., in Chumporn Province
          Karnchanaburi Sugar Industry Co., Ltd. in Uthai Thani Province
          Woodwork Creation Co., Ltd. in Krabi Province
          Mitr Kalasin Sugar Co., Ltd. in Kalasin Province
          Liang Hong Chai Rice Mill Co., Ltd. in Khon Kaen Province
        Southern Palm Oil Industry (1993) Co., Ltd. in Surat Thani Province
       A map showing the location of these candidate facilities is included as Figure
10-1. As can be seen on the map, the facilities are distributed throughout the four regions
of Thailand.




November 25, 2011                            10-1                                 Final Report
                    Figure 10-1. Candidate Facility Locations.




November 25, 2011                     10-2                       Final Report
10.2 Study Assumptions
         Aside from facility specific information, most of the underlying assumptions were
kept the same during the course of the study. There are two exceptions to this: the
exchange rate used in the financial evaluation and the capital cost basis.
         As shown in Figure 10-2, the Baht to US dollar exchange rate has fluctuated
significantly over the course of this study. Evaluation of the first four sites was initially
issued in June 1998 and used an exchange rate of 43.53 Baht/US$. Since that time the
exchange rate has dropped significantly. The financial analysis in the last six sites
reflects this drop and assumes an exchange rate of 37.15 Baht/US$. To determine the
effect of the exchange rate movement, sensitivity analyses for each site assessed in the
last six sites were performed at +/-4 Baht/US$ and at the original exchange rate used for
the first four sites.

                            55



                            50


                                                                                           First 4 Sites – 43.53 Baht/US$
                            45
  Exchange Rate, Baht/US$




                            40



                            35                                                                                              Final 6 Sites – 37.15 Baht/US$




                            30



                            25

                                                                                         Evaluation Period for                     Evaluation Period for
                                                       Initial Investigations
                                                                                           First Four Sites                          Final Six Sites
                            20
                            Jan-97   Apr-97   Jul-97    Oct-97     Jan-98       Apr-98     Jul-98    Oct-98      Jan-99   Apr-99      Jul-99    Oct-99     Jan-00
                                                                                              Date

                                     Figure 10-2. Baht/US$ Daily Average Interbank Exchange Rate (Source:
                                                           http://www.onada.com).


         There is an overall increase in project costs for the last six sites relative to the first
four sites. (Tables 10-2, 10-3, and 10-4 at the end of this section contain pricing
information for the sites). This increase is due to two factors. First, total project costs for
the first four sites were developed assuming aggressive international sourcing (including
Chinese manufacturers). Financial sensitivity analyses were performed to provide
information on alternatively sourced equipment. Costs for the last six sites were
developed assuming that equipment with extensive performance records and proven
reliability would be used. This implies that generally higher cost US, European, and


November 25, 2011                                                                         10-3                                                        Final Report
Japanese equipment suppliers would be specified, resulting in higher total project costs.
Second, the first four sites focused on new facilities 9 to 10 MW gross in size, whereas
the last six sites examined new facilities 3.5 to 7 MW gross in size. Economies of scale
are significant in this size range, with specific costs ($/kW) increasing as project size
decreases. The combination of different suppliers with better costing information and
smaller facility size for the base case analyses results in increased project costs ($/kW) for
the last six sites.
         It is possible that significant cost reductions could be obtained through aggressive
international sourcing while still maintaining technical acceptability. Therefore, an
additional financial sensitivity analysis was performed for each of the last six sites where
the direct EPC cost was reduced 20 percent from the base case.

10.3 Summary Results
        Based on the assumptions noted in each feasibility study, the results of the studies
indicate that all of the ten candidate facilities are technically and environmentally viable.
A variety of biomass fuels were examined in the studies including rice husk (4 facilities),
wood wastes (2), palm oil residues (2), and bagasse (2) as primary fuels and coconut
husks (1), biogas (2), and corncobs (1) as supplementary fuels. Combustion of these fuels
is generally considered proven and stoker grate boilers were specified for all the sites
based on their widespread availability and relatively low capital cost. Both entirely new
power facilities and modifications to existing plant power facilities were examined,
although most studies examined new power facilities. A typical plant configuration for a
new facility is shown in Figure 10-3. The power outputs examined ranged from 1.9 MW
to 8.8 MW net for the base case analyses. In support of financial sensitivity analyses,
some preliminary investigations were done for facilities sized up to 30 MW.
Cogeneration of steam was a very significant design factor for the two palm oil mills and
played a lesser role for the other facilities. In general, the studies found relatively few
technical or environmental obstacles.




November 25, 2011                           10-4                                Final Report
                                                                                                  Flue Gas

                       SYSTEM BOUNDARY
                       POWER PLANT                                       Steam


                                                                                                                       Generator
                                                                                                             Steam                        Power for
                                                                                                             Turbine                      Export

                                                                                                                              Auxiliary
                                                                                       Boiler                                  Power
                                                                                     Feedwater


                                                     B   O   I   L   E    R                                     Condenser /                Makeup
                                   Air
                                                                                                                Process Use                Water

                                                                                    Particulate
                            Fuel           Fuel                                      Control
                         Preparation


    Supplemental
       Fuel from        Fuel Storage
Surrounding Area
                                                                                             SYSTEM BOUNDARY

             Waste Byproduct                        Boiler               Ash
                       (Fuel)                     Blowdown
                                                                         Condensate Return
       Biomass           Processing
      Feedstock          Operations                                       Process Steam

                     Power (from Grid or
                       Power Plant)




                                Figure 10-3. Typical Biomass Power Plant Configuration.


           However, the financial viability of the facilities is mixed as demonstrated in
   Table 10-1. Only three of the facilities identified (Sommai Rice Mill, Sanan Muang Rice
   Mill, and Thitiporn Thanya Rice Mill) surpassed the initial financial internal rate of return
   hurdle of 23 percent in the base case financial analyses. (The 23 percent figure is
   established in the MOU as the minimum rate of return requiring facility
   owners/developers to either proceed with the project or repay NEPO for the cost of the
   study.) Black & Veatch investigated alternative scenarios aimed at improving the
   financial rating of the remaining facilities. These studies, which are preliminary in
   nature, indicate that several factors could change to improve the viability of these
   projects. In some cases, such as simply accounting for the value of cogenerated steam at
   the Chumporn Palm Oil Mill, the improvement in IRR can be dramatic and is compelling
   from an investment standpoint. In other cases, the base case IRR can only be improved
   significantly by a combination of several positive factors, some of which would require
   aggressive implementation. For this reason, the long term prospects for development at
   these sites appears limited.




   November 25, 2011                                                 10-5                                                       Final Report
                                             Table 10-1
                                     Summary of Financial Analyses

                            Base Case   Alternative                                             Development
Facility                                                  Features of Alternative Study
                              IRR       Study IRR                                                  Status
Sommai Rice Mill Co.,         32.6          NA                            NA                    EPC bid stage
Ltd.
Sanan Muang Rice Mill         25.5          NA                            NA                    Under further
Co., Ltd.                                                                                       consideration
Thitiporn Thanya Rice         26.4          NA                            NA                    Under further
Mill Co., Ltd.                                                                                  consideration
Plan Creations Co., Ltd.       8.2          38.5                    Larger facility             Under further
                                                                                                consideration
Chumporn Palm Oil             20.4        39 to 69        Added revenue to account for          Under further
Industry Plc.                                             avoided steam generation cost         consideration
Karnchanaburi Sugar           18.9          27.5          Existing boiler efficiency            Under further
Industry Co., Ltd.                                        increase to save bagasse              consideration
Woodwork Creation Co.,         4.4           25           Larger facility, more efficient       Under further
Ltd.                                                      facility, drier fuel, lower project   consideration
                                                          cost basis ($/kW)
Mitr Kalasin Sugar Co.,       13.3           46           Modification of existing facility     Development
Ltd.                                                      rather than new plant                 proceeding
Liang Hong Chai Rice           7.6        13 to 29        Larger facility, lower project        Under further
Mill Co., Ltd.                                            cost basis ($/kW)                     consideration
Southern Palm Oil             11.6        13 to 25        Added revenue to account for          Under further
Industry (1993) Co., Ltd.                                 avoided steam generation cost,        consideration
                                                          larger facility


        At this time, eight of the ten facilities either are under active development or are
under further consideration by the owners. For any project that proceeds with
development, additional development activities should include detailed evaluations of
fuel supply (quantity, quality, etc.), as well as power facility conceptual design to support
and confirm assumptions in the feasibility study, development of a more detailed project
capital cost estimate with specific vendor pricing on major equipment, and additional pro
forma analyses as new data warrants.
        The first four studies examined building entirely new facilities. Table 10-2 at the
end of this section summarizes the major attributes of these studies. Of the last six
studies, two of the studies examined modifications to existing facility power plants, while
four of the studies examined entirely new power facilities. Table 10-3 summarizes the
results of the two power facility modification studies. Table 10-4 summarizes the results
of the new power facility studies for the last set of sites. (Table 2-2 in the Executive
Summary provides a side by comparison of major facility features for all sites.) The
results of the studies for each site are briefly discussed below.

10.3.1 Sommai Rice Mill Co., Ltd.
      A new power facility was studied at the Sommai Rice Mill Co., Ltd. located in
Roi Et province, Thailand.    The Sommai rice mill currently processes about


November 25, 2011                                  10-6                                         Final Report
1,000 tonne/day of rice paddy in two process lines of 700 tonne/day and 300 tonne/day.
An additional process line of 300 tonne/day is under construction. When the facility
expansion is completed, it is anticipated that an average of 98,670 tonne/yr of rice husk
will be generated at the plant.
        The feasibility of building a new power plant at the Sommai rice mill facility was
studied. The boiler for the plant would be fueled with rice husk and would generate
steam for use in a turbine generator with a gross output of 10.0 MW. Net plant output is
estimated at 8.8 MW. The feasibility study concludes that the proposed development is
technically, environmentally, and financially viable (IRR of 32.6 percent).

10.3.2 Sanan Muang Rice Mill Co., Ltd.
         A new power facility was studied at the Sanan Muang Rice Mill Co., Ltd. located
in Kamphaeng Phet province, Thailand. The Sanan Muang rice mill currently processes
about 250 tonne/day of rice paddy. Typical operation of a rice mill yields 23 tonnes of
rice husks for every 100 tonnes of rice paddy. Thus, on average about 13,800 tonne/yr of
rice husk is generated at the plant. Additional rice husks are also available from five
facilities in the surrounding area (within 50 km). It is anticipated that a total of about
79,000 tonne/yr of rice husks would be available to fuel the proposed power facility.
         The feasibility of building a new power plant at the Sanan Muang facility was
studied. The boiler for the plant would be fueled with rice husk and would generate
steam for use in a turbine generator with a gross output of 9.1 MW. Net plant output is
estimated at 8.0 MW. The feasibility study concludes that the proposed development is
technically, environmentally, and financially viable (IRR of 25.5 percent).

10.3.3 Thitiporn Thanya Rice Mill Co., Ltd.
         A new power facility was studied at the Thitiporn Thanya Rice Mill Co., Ltd.
located in Nakorn Sawan province, Thailand. The Thitiporn Thanya rice mill currently
processes 500 tonne/day of rice paddy. Typical operation of a rice mill yields 23 tonnes
of rice husks for every 100 tonnes of rice paddy. Thus, on average about 27,600 tonne/yr
of rice husk is generated at the plant. Additional rice husks are also available from seven
facilities in the surrounding area (within 50 km). It is anticipated that a total of about
79,000 tonne/yr of rice husks would be available to fuel the proposed power facility.
         The feasibility of building a new power plant at the Thitiporn Thanya facility was
studied. The boiler for the plant would be fueled with rice husk and would generate
steam for use in a turbine generator with a gross output of 9.1 MW. Net plant output is
estimated at 8.0 MW. The feasibility study concludes that the proposed development is
technically, environmentally and financially viable (IRR of 26.4 percent).




November 25, 2011                          10-7                               Final Report
10.3.4 Plan Creations Co., Ltd.
        A new power facility was studied at the Plan Creations Co., Ltd. parawood
processing plant located in Trang province, Thailand. Plan Creations makes educational
toys from rubber wood (parawood). The residue from the process is a combination of
bark, outer cuts, curfs (from sawing), sawdust (from sanding operations), and discarded
stock (low quality, diseased, discolored, etc.). It is estimated that about 4,000 tonne/yr of
residue will be available at the facility. In order to take advantage of economies of scale,
additional wood resources were sought. About 14,000 tonnes of parawood residue could
be delivered from area manufacturing facilities. An additional 116,000 tonnes could be
obtained by implementing forestry residue collection operations over an area of about
15,000 rais. The total fuel available would then be about 134,000 tonne/yr.
        The feasibility of building a power plant at the Plan Creations site was studied.
The boiler for the plant would be fueled with wood residues and would generate steam for
use in a turbine generator with a gross output of 10.0 MW. Net plant output is estimated
at 8.8 MW. The feasibility study concludes that the proposed development is technically
and environmentally viable, but financially marginal (IRR of 7.95 percent).
        Following the base case analysis, the study team investigated what factors would
have to change to increase the viability of a power plant at this site. It was found that a
large increase in fuel consumption and plant size would allow an IRR of about
38.5 percent. In the most optimistic scenario analyzed, where about 74 percent
(356,000 tonnes) of all available parawood logging residues from the Trang province are
collected, a power plant of about 28 MW net is possible. The extent to which additional
fuel can be collected at a relatively low cost (320 Baht/tonne) will determine the ability of
the project to achieve the higher rates of return.

10.3.5 Chumporn Palm Oil Industry Plc.
        Power facility modifications were studied at the Chumporn Palm Oil Industry Plc.
(CPOI) palm oil mill located in Chumporn province, Thailand. CPOI processes fresh oil
palm to produce crude palm oil, refined palm oil, and palm kernel oil. There are various
biomass residues produced in the process including palm shells, fiber, empty fruit bunch
(EFB), and biogas (to be produced from a new wastewater treatment system). CPOI
currently burns all the solid byproducts of the production process in a power plant located
at the site. The plant produces power and process steam for the operations. The power
plant has an installed maximum capacity of 4.3 MW gross but currently only produces
about 2.4 MW gross (1.9 MW net) on average.
        Several modifications were proposed for CPOI to improve efficiency and increase
power output. Preliminary technical and economic analysis found that combustion of
additional fuel up to the current facility capacity (4.3 MW) is viable. Fuels used include
palm shell, palm fiber, EFB, and biogas produced by the expanded processing facility,
and coconut husk fiber and additional shell procured from the surrounding area. Due to



November 25, 2011                           10-8                               Final Report
its lower cost, coconut husk is preferred over old age palm trees, which will become a
disposal problem as the palm plantation matures. Major capital improvements required
for this option include a new shredder to prepare the additional EFB and minor upgrades
to the existing interconnection to allow electricity to be sold to the grid.
        Additional modifications were selected for further analysis.             The final
configuration utilizes a low pressure condensing turbine to capture and generate power
from the exhaust of the existing back pressure steam turbine, a condenser to recover
turbine and process exhaust steam, an improved makeup water treatment system, and
other modifications. The average gross plant output under this configuration would be
approximately 5.4 MW, an increase of 3.0 MW over the existing plant. Peak plant output
will be about 6.4 MW gross. The new configuration would also allow more process
steam to be generated allowing for greater palm oil production capacity.
        The feasibility study concluded that the proposed development is technically and
environmentally viable, but financially marginal (base case IRR of 20.4 percent). These
conclusions are based on preliminary assumptions concerning process data, future
production, and equipment requirements and costs. Additional study work and detailed
data collection may be required to determine the optimal plant modifications and
associated financial returns. In addition, the new power plant will allow CPOI to operate
at a higher palm oil production capacity. The value of this benefit was not included in the
base case financial analysis but was evaluated through sensitivity analysis by assigning a
value to the cogenerated steam. It was found that inclusion of this benefit would make
the project very attractive financially (IRR ranging from 39 to 69 percent for steam value
of 5 to 15 US$/tonne, respectively).

10.3.6 Karnchanaburi Sugar Industry Co., Ltd.
         Power facility modifications were studied at the Karnchanaburi Sugar Industry
Co., Ltd. (KSI) located in Uthai Thani province, Thailand. KSI mills sugarcane to extract
its juice for the production of sugar. Bagasse is produced as residue in the process. KSI
currently burns a portion of the bagasse in a power plant located at the site to produce
power and process steam for the milling operation. The maximum capacity of the power
plant is 17.5 MW gross. Based on recent statistics, about 21,000 tonnes of excess bagasse
remain at the end of the processing season.
         Depending on the steam needs of the processing operations, there is unused and
unsold electrical capacity at the plant. This surplus power could be sold to the grid but is
not currently. During the on-season (about 100 days), the plant could export the excess
power, which is estimated to average about 455 kW. In addition, during both the on and
off-season, excess bagasse could be utilized in existing idle mill power equipment with
the intent to export “firm” power to the grid year-round. To supplement the bagasse
supply, corncobs would be gathered from the surrounding area. The combination of the
excess existing power production, excess bagasse fuel, and supplemental corncob fuel can



November 25, 2011                          10-9                               Final Report
provide a total of 1,850 kW net at an annual capacity factor of 53.2 percent. This option
would use the existing factory boilers, turbine-generators, and tie line to PEA. New
equipment required includes interconnection equipment, additional condensing capacity,
and piping and valving upgrades.
        The feasibility study concludes that the proposed development is technically and
environmentally viable, and financially viable under certain conditions (IRR of
18.9 percent). These conclusions are based on relatively conservative assumptions
concerning process data, future crop production, and equipment requirements and costs.
Additional study work and detailed data collection may be required to determine the
optimal plant modifications and associated financial returns. Additional analysis found
that increases in sugar milling efficiency would allow enough bagasse to be produced so
that combustion of supplemental corncob fuel would not be required. The IRR under this
scenario increases significantly to 27.5.

10.3.7 Woodwork Creation Co., Ltd.
         A new power facility was studied at the Woodwork Creation Co., Ltd. located in
Krabi province, Thailand. Woodwork Creation makes processed wood sheets from
rubber wood (parawood). Residue produced by the process includes bark, sawdust, and
wood chips. A total of 40,320 tonne/yr of residue will be generated at the facility after an
upcoming expansion. Some of this fuel is used to power an existing steam boiler at the
facility. Limited additional fuel could be purchased from the surrounding area. The total
fuel available to the power facility would be 54,000 tonne/yr.
         The feasibility of building a new power plant at the Woodwork Creation site was
studied. The boiler for the plant would be fueled with wood residues and would generate
steam for use in a turbine generator with a gross output of 3.55 MW. Net plant output is
estimated at 3.1 MW. The feasibility study concludes that the proposed development is
technically and environmentally viable, but financially marginal (IRR of 4.4 percent).
         Following the base case analysis the study team investigated what factors would
have to change to increase the viability of a power plant at this site. It was found that the
following factors, when combined, would allow an IRR of almost 25 percent:
           Large increase in base fuel supply (additional 300,000 tonnes).
           Reduced moisture content assumption of 40 percent for the additional fuel
            (base assumption is 60 percent).
           15 percent improvement in net plant heat rate over base assumption.
         25 percent decrease in project cost basis over base assumption.
        The combination of these assumptions resulted in a plant with a net output of
about 30 MW and a total project cost of about US$1,060/kW. The extent to which the
above requirements can be met will determine the ability of the project to achieve the
higher rates of return. As some of these requirements are fairly aggressive, it may be
difficult to obtain acceptable rates of return at this site.


November 25, 2011                          10-10                               Final Report
10.3.8 Mitr Kalasin Sugar Co., Ltd.
        A new power facility was studied at the Mitr Kalasin Sugar Co., Ltd. (MKS)
located in Kalasin province, Thailand. MKS mills sugarcane to extract its juice for the
production of sugar. Bagasse is produced as residue in the process. MKS currently burns
a portion of the bagasse in a power plant located at the site to produce power and process
steam for the milling operation. The maximum capacity of the power plant is 16.4 MW
gross. Based on recent statistics, about 76,000 tonnes of excess bagasse remain at the end
of the processing season.
        The study investigated the feasibility of building an entirely new power plant
fueled with the excess bagasse produced by the processing facility. A boiler would
generate steam for use in a turbine generator with a gross output of 6.1 MW. Net plant
output is estimated at 5.6 MW. The existing power facility would remain and would
supply the processing operations with required steam and power. The feasibility study
concludes that the proposed development is technically and environmentally viable, but
financially marginal (base case IRR of 13.3 percent).
        An alternative generation option, which involves modification to the existing
power facility rather than construction of a new plant, initially appears more promising
from a financial standpoint. The modifications would allow about 3 MW to be exported
from one of the existing generators at an annual capacity factor of 71 percent (firm basis).
Because of greatly reduced capital requirements, the projected IRR for this case is much
higher, 46 percent. Due to time and budget constraints, this option was only briefly
analyzed; additional study work and detailed data collection would be required to
properly assess this option.

10.3.9 Liang Hong Chai Rice Mill Co., Ltd.
        A new power facility was studied at the Liang Hong Chai Rice Mill Co., Ltd.
(LHC) located in Khon Kaen province, Thailand. LHC owns two rice mills, each of
which currently processes a maximum of 250 tonnes of rice paddy per day or about
75,000 tonnes of paddy per year (150,000 tonnes per year total). The proposed
development would be at the newer facility, which is about 5 km from the old plant. A
total of approximately 33,000 tonne/yr of rice husk will be available for power
production.
        The feasibility of building a new power plant at the new LHC facility was studied.
The boiler for the plant would be fueled with rice husk and would generate steam for use
in a turbine generator with a gross output of 3.8 MW. Net plant output is estimated at
3.3 MW. The feasibility study concludes that the proposed development is technically
and environmentally viable, but financially marginal (IRR of 7.6 percent). Following the
base case analysis the study team investigated what factors would have to change to
increase the viability of a power plant at this site. It was found that the following factors,
when combined, would allow an IRR of about 29 percent:



November 25, 2011                          10-11                                Final Report
           Increase in rice husk supply from 33,000 to 133,000 tonne/yr. Additional rice
            husk could be procured from the Nakorn Ratchasima province.
         20 percent decrease in project cost basis over base assumption.
        The combination of these assumptions resulted in a plant with a net output of
about 13.4 MW and a total project cost of about US$1,550/kW. This additional
investigation appears encouraging and indicates that a rice husk power plant in the area, if
not at this site, might be viable.

10.3.10 Southern Palm Oil Industry (1993) Co., Ltd.
        A new power facility was studied at the Southern Palm Oil Industry (1993) Co.,
Ltd. (SPOI) palm oil mill located in Surat Thani province, Thailand. SPOI processes
fresh oil palm to produce crude palm oil. There are various biomass residues produced in
the process including palm shells, fiber, EFB, and biogas (to be produced from a new
wastewater treatment system). SPOI currently burns the shells and fiber in a power plant
located at the site. The plant produces power and process steam for the operations. The
existing power plant has an installed capacity of 880 kW gross. SPOI would like to
expand palm oil production but is limited by the power and steam production of its
existing power plant.
        The feasibility of building an entirely new power plant at the SPOI site was
studied. The boiler for the plant would be fueled with fiber and shells produced by the
processing facility (EFB would not be burned). The boiler would generate steam for use
in a turbine generator with a gross output of 7.0 MW. Net plant output is estimated at
6.2 MW. The existing power facility would remain and would be used for backup
purposes. The feasibility study concludes that the proposed development is technically
and environmentally viable, but financially marginal (IRR of 11.6 percent). However,
due to increased steam production, the new power plant will allow SPOI to operate at a
higher palm oil production capacity. The value of this benefit was not included in the
base case financial analysis but was evaluated through sensitivity analysis by assigning a
value to the cogenerated steam. It was found that inclusion of this benefit would not
improve the IRR above the hurdle rate without making other changes to the project. It
was found that the following factors, when combined, would allow an IRR of about
25 percent:
          Increase in plant size to 28.3 MW through additional fuel supply from the
           surrounding area.
        Increase in palm oil mill processing time such that 40,000 tonne/yr of steam
           are required over current needs. This might be obtained by increasing low
           season operation from 16 hr/day to 24 hr/day. The additional steam is valued
           at $10/tonne in the pro forma analysis.
       The resulting IRR of 25 percent exceeds the hurdle rate. This indicates that
development of an enhanced cogeneration plant at this site is promising. To fully


November 25, 2011                         10-12                               Final Report
establish the financial impact of the modifications, SPOI or an outside developer would
need to investigate this issue further. The investigation would need to consider all
impacts, positive and negative, that the power facility modifications would have on the
processing operations.




November 25, 2011                       10-13                             Final Report
                                                 Table 10-2
                              Summary Results of Proposed New Power Facilities

                                                                 Sanan        Thitiporn         Plan
 Facility                                         Sommai
                                                                 Muang         Thanya         Creations
 General Facility Information
 Facility type                                    Rice mill      Rice mill     Rice mill    Wood products
                                                                Kamphaeng
 Province                                          Roi Et                    Nakorn Sawan      Trang
                                                                  Phet
 Facility annual capacity, tonne/yr               429,000a        60,000       120,000         10,000
 Fuel Information
 Facility residue type (solid fuels)              Rice husk     Rice husk     Rice husk      Wood waste
 Ratio of residue to capacity                       0.23           0.23          0.23           0.40
 Facility residue, tonne/yr                        98,670         13,800        27,600          4,000
 Reserved residue for mill, tonne/yr                 0              0             0              0
 Additional residue purchased, tonne/yr              0            65,200        51,400         130,000
                                                            b
 Total residue available, tonne/yr                 86,900         79,000        79,000         134,000
 Composite heating value (HHV), kJ/kg              14,100         14,100        14,100         10,300
 Annual heat input available, GJ/yr               1,225,868     1,113,900     1,113,900       1,380,200
 Power Plant Characteristics
 Estimated plant capacity factor, percent            85             85            85             85
 Boiler efficiency, percent                          82             82            82             73
 Gross turbine heat rate, kJ/kWh                   13,500         13,500        13,500         13,500
 Auxiliary power, percent                            12             12            12             12
 Calculated net plant heat rate, kJ/kWh            18,708         18,708        18,708         21,015
 Cogeneration? Steam flow, tonne/hr                  No             No            No             No
 Power Potential
 Calculated solid fuel burn rate, tonne/hr          11.7           10.6          10.6           18.0
 Calculated total fuel burn rate, GJ/hr            164.6          149.5         149.5           184.9
 Calculated gross plant capacity, kW               10,000         9,100         9,100          10,000
 Calculated net plant capacity, kW                 8,800          8,000         8,000           8,800
 Average internal process use, kW                    0              0             0              0
 "Firm" capacity for sale to grid, kW              8,800          8,000         8,000           8,800
 Annual energy sales to grid, GWh                   65.5           59.6          59.6           65.5
 Economic Aspects
 Estimated total project cost, US$ milc             9.71           9.27          9.27           10.59
                                              c
 Estimated total project cost, US$/kWnet           1,100          1,160         1,160           1,200
                                          c
 Internal rate of return (IRR), percent             32.6           25.5          26.4           7.95
 IRR for “European equipment,” percent              24.6           19.2          20.0            5.1
 Notes:
  a
    After proposed facility expansion.
  b
    Fuel supply limited to keep plant size at 10 MW gross.
  c
    Costs based on use of Chinese equipment.




November 25, 2011                                     10-14                                  Final Report
                                                 Table 10-3
                              Summary Results of Proposed Facility Modifications

                                                 Chumporn Palm Oil            Karnchanaburi Sugar
 Facility
                                                     Industry                      Industry
 General Facility Information
 Facility type                                       Palm oil mill                    Sugar mill
 Province                                             Chumporn                       Uthai Thani
 Facility annual capacity, tonne/yr                    270,000a                       1,000,000
 Fuel Information
                                              Oil palm fiber, shell, empty
 Facility residue type (solid fuels)                                                   Bagasse
                                                     fruit bunches
 Ratio of residue to capacity                            0.33                            0.25
 Facility residue, tonne/yr                             89,100                         250,000
 Reserved residue for mill, tonne/yr                       0                           229,166
 Additional residue purchased: quantity,     Palm shell and coconut husk:
                                                                                   Corncobs: 13,382
 tonne/yr                                               22,760
 Total residue available, tonne/yr                     111,860                         34,216
 Composite heating value (HHV), kJ/kg                   12,765                         11,895
                                                                     b
 Annual heat input available, GJ/yr                   1,564,000                        406,980
 Power Plant Characteristics
 Estimated plant capacity factor, percent                  82                            53.2
 Boiler efficiency, percent                               70c                           72-80c
 Auxiliary power, percent                                16.1c                            8c
 Average net plant heat rate, kJ/kWh                    49,500c                        47,205c d
 Cogeneration? Steam flow, tonne/hr                   Yes, 31.85                         No
 Power Potential
 Average solid fuel burn rate, tonne/hr                  15.5                            7.3
 Average total fuel burn rate, GJ/hr                     217.1                           87.3
 Average gross plant output, kW                          5,400                          2,000
 Average net plant output, kW                           4,550e                          1,850
                                                                 f
 Average internal process use, kW                       2,030                             0
 "Firm" capacity for sale to grid, kW                    2,520                          1,850
 Annual energy sales to grid, GWh                        18.1                            8.62
 Economic Aspects
 Estimated total project cost, US$ mil                    5.0                            1.95
 Estimated total project cost, US$/kWnet     1,887 (per additional net kW)              1,054
 Internal rate of return (IRR), percent                  20.4                            18.9
 IRR at exchange rate of 43.5 Baht/US$                   15.78                          15.94
 IRR at 20 percent reduced capital cost                  29.41                          26.68
 IRR for alternative study (see writeup)                 39-69                           27.5
 Notes:
  a
    After proposed facility expansion.
  b
    Includes biogas use of 6,000,000 m3/yr (136,000 GJ/yr).
  c
    Based on existing power facility performance information considering proposed modifications.
  d
    Includes credit for surplus power generated by the existing facility during the on-season.
  e
    Previous: approximately 1,900 kW average.
  f
    Electricity required for milling operations.



November 25, 2011                                  10-15                                       Final Report
                                                 Table 10-4
                              Summary Results of Proposed New Power Facilities

                                             Woodwork Mitr Kalasin Liang Hong Southern Palm
 Facility
                                              Creation Sugar Mill Chai Rice Mill Oil Industry
 General Facility Information
 Facility type                               Wood prod.      Sugar mill   Rice mill   Palm oil mill
 Province                                      Krabi          Kalasin     Khon Kaen    Surat Thani
                                                       a
 Facility annual capacity, tonne/yr           80,640         1,360,000     150,000       350,000a
 Fuel Information
                                               Wood                                   Oil palm fiber,
 Facility residue type (solid fuels)                          Bagasse     Rice husk
                                               waste                                       shell
 Ratio of residue to capacity                   0.50           0.27       0.22-0.23          0.21
 Facility residue, tonne/yr                    40,320         369,000      33,000         73,500
 Reserved residue for mill, tonne/yr           8,640          293,000            0             0
 Additional residue purchased, tonne/yr        22,320            0               0             0
 Total residue available, tonne/yr             54,000         76,000       33,000         73,500
 Composite heating value (HHV), kJ/kg          9,450           9,540       14,100         13,500
 Annual heat input available, GJ/yr           510,300         725,040      465,300      1,072,932b
 Power Plant Characteristics
 Estimated plant capacity factor, percent       85              85           85              90.4
 Boiler efficiency, percent                     70              77           82               77
 Gross turbine heat rate, kJ/kWh               13,500         12,400       13,500        14,680d
 Auxiliary power, percent                       12               8c          12               12
 Calculated net plant heat rate, kJ/kWh        21,900         17,400       18,700        21,700d
 Cogeneration? Steam flow, tonne/hr             No              No           No         Yes, 13.9d
 Power Potential
 Calculated solid fuel burn rate, tonne/hr      7.3            10.2          4.4             9.3d
 Calculated total fuel burn rate, GJ/hr         68.5           97.4         62.5          135.5d
 Calculated gross plant capacity, kW           3,550           6,100        3,800            7,000
 Calculated net plant capacity, kW             3,100           5,600        3,300            6,200
 Average internal process use, kW                0               0               0           834d e
 "Firm" capacity for sale to grid, kW          3,100           5,600        3,300         5,366d
 Annual energy sales to grid, GWh               23              42           25              42.5
 Economic Aspects
 Estimated total project cost, US$ mil          8.65           13.4         9.73             14.6
 Estimated total project cost, US$/kWnet       2,800           2,400        2,950            2,350
 Internal rate of return (IRR), percent         4.4            13.3          7.6             11.6
 IRR at exchange rate of 43.5 Baht/US$          2.1             9.8          5.1              8.4
 IRR at 20 percent reduced capital cost         8.5            20.1         12.6             17.9
 IRR for alternative study (see writeup)        25              46          13-29            13-25
 Notes:
  a
    After proposed facility expansion.
  b
    Includes biogas use of 3,570,000 m3/yr (80,682 GJ/yr).
  c
    Based on existing power facility performance information.
  d
    Average value. SPOI requires varying amounts of process steam depending on the season.
  e
    Electricity required for milling operations.



November 25, 2011                                    10-16                             Final Report
 11.0 Presentation of Study Results to Facility Owners (Task 3.1
                         and Task 3.2)

        Before signing MOUs, the facility owners were informed of the merits of using
biomass as fuel for power generation and cogeneration projects including details of the
sale of excess power to EGAT under the SPP program. All of the facility owners were
interested in the potential project benefits and hence signed the MOUs.
        Follow-on presentations were made to facilities for which the study results were
positive in order to assist them with project implementation. The following sections
describe the presentation of study results made to each of the facility owners.

11.1 Sommai Rice Mill Co., Ltd.
        Among the rice mill facilities studied, Sommai is the largest with a milling
capacity of about 1,000 tonnes of paddy per day. The facility aggregately produces about
87,000 tonnes of rice husk per year. It was determined that Sommai can install up to a 10
MW (gross) plant with an investment of US$11.4 million. The financial return on this
investment (Internal Rate of Return, IRR) is very favorable at about 33 percent. Other
details of the Sommai facility are shown in Table 11-1.


                                     Table 11-1
                       Summary Results Sommai Rice Mill Facility

Item                                                                  Result
Gross plant capacity, MW                                                10
Net plant capacity, MW                                                 8.8
Investment, $US million                                              11.424
Fuel type                                                           Rice Husk
Fuel consumption, tonnes/yr                                          87,000
Total fuel cost, Baht/tonne                                            100
Operating hours per year                                              7446
Revenue from EGAT, million Baht/yr                                     114
Internal rate of return, percent                                        33
Source of fuel supply, tonnes/yr
   Sommai Rice Mill                                                   87,000

        The study team went to present the study results to Mr. Sommai in September
1998 in Roi Et. Mr. Sommai had expressed interest in pursuing project development
further. In the meanwhile, EGCO (Electricity Generating Plc.) was interested in
developing a project of this kind. The study team met to present details of the study to
EGCO. Furthermore, the team made arrangements and escorted the EGCO project
development team several times to meet and discuss possible joint venture development

November 25, 2011                         11-1                              Final Report
with Sommai in Roi Et. At present, EGCO has obtained funding support for project
development from OECF of Japan. The development of this facility is proceeding well as
a joint venture with Sommai, and has reached the step at which a contractor is being
selected to provide engineering, procurement, and construction (EPC) services.

11.2 Sanan Muang Rice Mill Co., Ltd.
         Sanan Muang Rice Mill, with a rice husk supply of 13,800 tonne/yr, is smaller
than Sommai and requires additional rice husk from the surrounding area to make a new
power development viable. Three cases were studied (for details see Table 11-2). These
cases vary in plant generating capacity depending on the quantity of rice husk supply.
Case 1 is a study of a power facility with a capacity of 9.1 MW (gross) supplied by the
facility’s own rice husk and supplemental husk from other rice mills within a 25 km
radius. This case yielded an IRR of 25.5 percent, which is greater than the hurdle rate of
23 percent. Case 2 used rice husk produced from three nearby facilities and resulted in a
5.6 MW generating capacity. Case 3 used only the husk available at Sanan Muang and
resulted in a 1.8 MW generating capacity. Due to economies of scale, Case 2 and 3 do
not have attractive IRRs: 13.70 and 0.54 percent, respectively.


                                          Table 11-2
                         Summary Results Sanan Muang Rice Mill Facility

Item                                                      Case 1          Case 2      Case 3
Gross plant capacity, MW                                    9.0            5.6          1.8
Net plant capacity, MW                                      8.0            5.0          1.6
Investment, $US million                                   10.952          9.640        4.931
Fuel type                                                Rice Husk   Rice Husk       Rice Husk
Fuel consumption, tonnes/yr                               79,000      50,000          13,800
Total fuel cost, Baht/tonne                               100-250     100-200           100
Operating hours per year                                   7,446          7,446        7,446
Revenue from EGAT, million Baht/yr                          100            64           20
Internal rate of return, percent                           25.52          13.70         0.54
Source of fuel supply, tonnes/yr
  Sanan Muang Rice Mill                                   13,800          13,800      13,800
  Kanutanjakij Rice Mill                                  16,560          16,560
  Nitinun Supakij # 1 Rice Mill                           11,040          11,040
  Nitinun Supakij # 2 Rice Mill                            8,832          8,832
  Supachai Rice Mill                                      22,080
  Sawangtavorn Rice Mill                                   6,624


       Since the IRR of Case 1 is greater than the hurdle rate of 23 percent, the study
team presented the results of Case 1 to the facility owner, Mr. Sanan. Mr. Sanan
expressed interest in further project development through a joint venture with another

November 25, 2011                            11-2                                  Final Report
interested investor. Mr. Sanan did not express much concern about the long term supply
availability of rice husk from the other facilities in the area.

11.3 Thitiporn Thanya Rice Mill Co., Ltd.
        Thitiporn Thanya Rice Mill, with a rice husk supply of 27,600 tonne/yr, is smaller
than Sommai and requires additional rice husk from the surrounding area to make a new
power development viable. Three cases were studied (for details see Table 11-3). These
cases vary in plant generating capacity depending on the quantity of rice husk supply.
Case 1 is a study of a power facility with a capacity of about 9.1 MW (gross) supplied by
the facility’s own rice husk and supplemental husk from all other rice mills within a
25 km radius. This case yielded an IRR of 26.4 percent, which is greater then the hurdle
rate of 23 percent. Case 2 used rice husk produced from three nearby facilities and
resulted in a 5.6 MW generating capacity. Case 3 used only the husk available at
Thitiporn Thanya and resulted in a 3.2 MW generating capacity. Due to economies of
scale, Case 2 and 3 do not have attractive IRRs: 14.6 and 7.23 percent, respectively.


                                          Table 11-3
                       Summary Results Thitiporn Thanya Rice Mill Facility

Item                                                       Case 1       Case 2        Case 3
Gross plant capacity, MW                                     9.0             5.6        3.2
Net plant capacity, MW                                       8.0             5.0        2.8
Investment, $US million                                    10.947        9.680         7.476
Fuel type                                                Rice Husk     Rice Husk     Rice Husk
Fuel consumption, tonnes/yr                                79,000       50,000        27,600
Total fuel cost, Baht/tonne                               100-250       100-250         100
Operating hours per year                                   7,446         7,446         7,446
Revenue from EGAT, million Baht/yr                          100              64         36
Internal rate of return, percent                            26.42        14.55          7.23
Source of fuel supply, tonnes/yr
  Thitiporn Thanya Rice Mill                               27,600       27,600        27,600
  Ruengthai Rice Mill                                       3,312        3,312
  Wangbau Rice Mill                                        11,040       11,040
  Amnaouypol Rice Mill                                      8,280        8,280
  Hnongyao Rice Mill                                        3,312
  Hnongben Rice Mill                                        3,312
  Hwangdee Rice Mill                                       13,800
  Charoenkij Rice Mill                                      8,280


       The study team presented the study results of Case 1 to the facility owner. The
owner expressed interest in further project development, but noted that his facility would
have to depend on rice husk from other facilities in the area in order to become a viable

November 25, 2011                             11-3                                 Final Report
project for development. He was very concerned about receiving a guarantee of long
term rice husk availability from other sources. This concern highlights the importance of
long term supply contracts for biomass in development of biomass based power
generation.

11.4 Plan Creations Co., Ltd.
         In initial analyses, the feasibility of a new power development at the Plan
Creations site was not found viable, yielding an IRR of 7.95 percent (for details see Table
10-4). The results were unfavorable due to high investment cost relative to the plant size
under study (i.e., economies of scale) and expensive fuel costs. The latter includes
opportunity, collection, transportation, and wood chipping costs.
         Black & Veatch investigated alternate scenarios in attempt to improve the project
economics. If a larger facility could be built, the project may be more viable. Black &
Veatch investigated the economics at plant sizes of 18 and 28 MW and found that the IRR
would increase to 28.6 and 38.5, respectively (see Table 11-4). The owner was presented
these new results but is interested in implementation of a small (about 2 MW) system at
the site. At present, the owner is soliciting project price information from a vendor.

                                      Table 11-4
                          Summary Results Plan Creations Facility
           Table Header                 Result           Option 1           Option 2
Gross plant capacity, MW                  10                20.9             31.7
Net plant capacity, MW                    8.8               18.4               27.9
Investment, US$ million                  12.6               19.1             26.7
Fuel type                             Wood Waste        Wood Waste        Wood Waste
Fuel consumption, tonne/yr             134,000           254,000           374,000
Total fuel costs, Baht/tonne           200-450            35-350           35-350
Operating hours per year                7,446              7,446            7,446
Revenue from EGAT, million               114                238              360
Baht/yr
Internal rate of return, percent           7.95             28.6               38.5
Source of fuel supply:
  Internal: Wood res., tonnes/yr           4,000            4,000              4,000
  External: Bark, tonne/yr                14,000           14,000             14,000
             Small log, tonne/yr         116,000          236,000            356,000


11.5 Chumporn Palm Oil Industry Plc.
       Several modifications were proposed for the Chumporn Palm Oil Industry Plc.
(CPOI) to improve the efficiency and increase power output of the existing power plant.
The final configuration selected includes the following modifications:


November 25, 2011                          11-4                               Final Report
           Combustion of additional fuel to fully utilize existing boiler and turbine
            generator capacity.
           Addition of a low pressure condensing turbine to generate power from the
            exhaust of the existing back pressure steam turbine.
           Recovery of turbine and process exhaust steam through a condenser with
            cooling tower.
            Improvement of the makeup water treatment system by addition of a reverse
             osmosis system.
        Table 11-5 presents a summary of the study results. With the selected
modifications, the average gross plant output would be 5.4 MW, or an increase of about
3.0 MW over the existing plant output. Under this configuration, CPOI would be able to
sell about 2.5 MW of power to EGAT on a “firm” basis.
        The proposed development would yield a base case IRR of 20.4 percent with an
estimated total project cost of about US$5.8 million. The base case IRR is slightly lower
than the hurdle rate of 23 percent. However, optimistic sensitivity analyses result in IRRs
that are higher than the hurdle rate.
        The study team presented and discussed the study results Mr. Suriya, who is the
assistant managing director of the palm oil mill. In general, Mr. Suriya agreed with the
study results but raised a concern on the fluctuating prices of biomass. He pointed out
that the price of oil palm shell has increased from 150 to 400 Baht/tonne since last year.
Additionally, he noted that there might also be a price increase in coconut husk, which
was considered as an inexpensive supplemental fuel in the feasibility study. The study
team explained the sensitivity analysis and suggested to estimate the results of a fuel price
increase through a pro forma model. Mr. Suriya was to look into the details of the study
report and discuss with the facility owner.
        It should be noted that the facility would like to expand their processing
capabilities in the near future. This will likely require some sort of upgrade to the mill
power and steam systems similar to that proposed for this study.




November 25, 2011                           11-5                               Final Report
                                         Table 11-5
                          Summary Results Chumporn Palm Oil Facility

Item                                                             Result
Gross plant capacity, MW                                           5.40
Net plant capacity, MW                                             4.55
Net sold to grid, MW                                               2.52
Investment, US$ million                                           5.767
Fuel type                                       Oil palm waste, biogas, and coconut husk
Total fuel cost, Baht/tonne                                      0-150
Operating hours per year                                          7,200
Revenue from EGAT, million Baht/yr                                  34
Internal rate of return, percent                                   20.4
Source of fuel supply:
  Internal:   Shell, tonne/yr                                   18,900
              Fibre, tonne/yr                                   32,400
              Empty bunch, tonne/yr                             37,800
              Biogas, cu.m/yr                                  6,000,000
  External:   Shell, tonne/yr                                   18,000
              Coconut husk, tonne/yr                             4,760

11.6 Karnchanaburi Sugar Industry Co., Ltd.
       Four options for developing the Karnchanaburi Sugar Industry were proposed:
    1. Use existing excess boiler and turbine capacity to generate additional power for
       export on-season, non-firm basis.
    2. Add condensing capacity so that a boiler and turbine set can generate additional
       power for export on and off-season, firm basis.
    3. Add new high-pressure boiler and turbo-generator equipment, using surplus
       bagasse for power production year round, firm basis.
    4. Develop an entirely new core cogeneration plant utilizing high efficiency boilers
       and turbines for power production year round, firm basis.
       However, with the owner’s concern of limited capital investment, only two
possible options (options 1 and 2) were left. Option 1, which involves selling excess
power to EGAT on a non-firm basis, is a popular option among the sugar mill facilities.
This option, however, does not fit the purpose of this study, which is to sell excess power
on a firm basis. Option 2 involves adding condensing capacity to generate additional
output for sale to EGAT on a firm basis during the on and off-season. Under this option,
a secondary fuel, corncob, would be required to supplement the bagasse supply.
       The results of study are summarized in Table 11-6. The IRR was found to be
18.9 percent with an estimated total project cost of US$2.37 million. Additional analysis

November 25, 2011                           11-6                              Final Report
found that increases in sugar milling efficiency would allow enough bagasse to be
produced so that combustion of supplemental corncob fuel would not be required. The
IRR under this scenario increases significantly to 27.5. Study results were presented to
the facility owner who is interested and agreed to further development.


                                       Table 11-6
                   Summary Results Karnchanaburi Sugar Industry Facility

Item                                          Original Option 2       Increased Efficiency
Gross plant capacity, MW                              2.0                       2.0
Net plant capacity, MW                               1.85                      1.85
Investment, US$ million                             2.371                     2.371
Fuel type                                      Bagasse, corncob              Bagasse
Fuel consumption, tonne/yr                         34,216                    43,333
Total fuel cost, Baht/tonne                        50-275                       50
Operating hours per year                            4,660                     4,660
Revenue from EGAT, million Baht/yr                    20                        20
Internal rate of return, percent                     18.9                     27.51
Source of fuel supply:
   Internal:  Bagasse, tonne/yr                      20,833                  43,333
  External:   Corncob, tonne/yr                      13,382                     –

11.7 Woodwork Creation Co., Ltd.
        In initial investigations, the feasibility of a new power development at the
Woodwork Creations Co. Ltd. site was not found attractive, yielding a low IRR of 4.22
percent (see Table 11-7). Similar to the Plan Creations site, the factors contributing to the
unattractive results were: limited fuel supply and power facility size, high investment cost
relative to the plant size, and relatively expensive fuel costs.
        Black & Veatch investigated alternate scenarios in attempt to improve the project
economics. If a larger facility could be built, the project may be more viable. Black &
Veatch investigated the economics at a plant size of 30 MW and found that the IRR
would increase to 24.7.




November 25, 2011                           11-7                               Final Report
                                       Table 11-7
                       Summary Results Woodwork Creation Facility

Item                                               Original Analysis    Larger Facility
Gross plant capacity, MW                                3.55                 34.0
Net plant capacity, MW                                  3.10                 30.0
Investment, US$ million                               10.235                 31.8
Fuel type                                            Wood waste          Wood Waste
Fuel consumption, tonne/yr                            54,000               354,000
Total fuel cost, Baht/tonne                           35-250               35-350
Operating hours per year                               7,446                7,446
Revenue from EGAT, million Baht/yr                      43.6                 419
Internal rate of return, percent                         4.4                 24.7
Source of fuel supply:
   Internal: Bark, tonne/yr                             15,552               15,552
              Sawdust, tonne/yr                          6,048                6,048
              Chip and discards, tonne/yr               10,080               10,080
   External: Bark, tonne/yr                             11,520               11,520
              Small log, tonne/yr                       10,800              310,800


11.8 Mitr Kalasin Sugar Co., Ltd.
        Similar to the feasibility study of the Karnchanaburi Sugar Mill, four options were
proposed for developing the Mitr Kalasin Sugar Co., Ltd.:
    1. Use existing excess boiler and turbine capacity to generate additional power for
        export on-season, non-firm basis.
    2. Add condensing capacity so that a boiler and turbine set can generate additional
        power for export on and off-season, firm basis.
    3. Add new high-pressure boiler and turbo-generator equipment, using surplus
        bagasse for power production year round, firm basis.
    4. Develop an entirely new core cogeneration plant utilizing high efficiency boilers
        and turbines for power production year round, firm basis.
        Option 1 was not considered because of the non-firm export of power to EGAT.
Option 4, which involves developing an entirely new central power plant, was
disregarded because the existing cogeneration facility is just relocated and does not need
to be replaced. The remaining two options were analyzed in more detail and the study
results are summarized in Table 11-8. Option 2 involves adding condensing capacity so
that a boiler and turbine set can generate 3.2 MW gross power for export on and off-
season on a firm basis. This option was estimated to cost US$2.6 million. Due to time
and budget constraints, this option was only briefly researched. With a new high pressure
boiler and turbine generator, option 3 could generate 6.1 MW gross power but at a larger

November 25, 2011                           11-8                              Final Report
investment of US$15.6 million. Option 2 yielded an IRR of 46 percent compared to
13.3 percent for option 3.
         The study team presented these results to representatives (coordinators) of the
facility owner. In general, they agree with the option alternatives and the results of study.
They intended to forward the study report to the facility for review and consideration of
implementation.


                                       Table 11-8
                        Summary Results Mitr Kalasin Sugar Facility

Item                                                          Option 2         Option 3
Gross plant capacity, MW                                         3.2               6.1
Net plant capacity, MW                                          2.96               5.6
Investment, US$ million                                         2.60            15.645
Fuel type                                                     Bagasse           Bagasse
Fuel consumption, tonne/yr                                    76,000            76,000
Total fuel cost, Baht/tonne                                       0                 0
Operating hours per year                                       6,220             7,446
Revenue from EGAT, million Baht/yr                              34.3              77.7
Internal rate of return, percent                                 46               13.3

11.9 Liang Hong Chai Rice Mill Co., Ltd.
        The initial feasibility study of building a new power facility at the Liang Hong
Chai Rice Mill Co., Ltd. yielded an IRR of 7.6 percent, which is much lower than the
hurdle rate of 23 percent. The low IRR was due to the high investment cost relative to the
plant size being studied. The latter was limited by the availability of rice husk, which was
obtained only from the two Liang Hong Chai facilities. For the base case analysis, no
other sources of fuel supply were identified in the vicinity of the proposed site. However,
the study team did perform an alternative analysis of a larger size plant supplemented
with rice husk from the Nakorn Ratchasima province. The results of this study are
favorable (see Table 11-9) and indicate that a rice husk based power plant located
somewhere in the area, if not at Liang Hong Chai site, might be feasible.
        A summary of study results is presented in Table 10-9. The owner of the facility
was informed of the study results and was given a copy of the report.




November 25, 2011                           11-9                               Final Report
                                        Table 11-9
                          Summary Results Liang Hong Chai Facility

Item                                          Original        Option 1         Option 2
Gross plant capacity, MW                          3.8             9.5             15.2
Net plant capacity, MW                            3.3             8.4             13.4
Investment, US$ million                        11.480            15.0             20.8
Fuel type                                     Rice husk       Rice husk        Rice husk
Fuel consumption, tonne/yr                     33,000          83,000           133,000
Total fuel cost, Baht/tonne                        0            0-350            0-350
Operating hours per year                        7,446           7,446            7,446
Revenue from EGAT, million Baht/yr               45.7           116.3            185.6
Internal rate of return, percent                  7.6           24.88            29.24
Source of fuel supply:
  New rice mill:   Rice husk, tonne/yr          16,500          16,500           16,500
  Old rice mill: Rice husk, tonne/yr            16,500          16,500           16,500
  Nakon Ratchasima rice husks, tonne/yr           –             50,000          100,000


11.10 Southern Palm Oil Industry (1993) Co., Ltd.
        The feasibility study of building a new power facility at the Southern Palm Oil
Industry (1993) Co., Ltd. yielded a low IRR of 11.6 percent as shown in Table 10-10.
The low IRR is due to high investment cost relative to the plant size studied. The plant
size was restricted by the facility owner’s request of using the fuel supply of the facility
only and by not considering empty fruit bunch as a potential fuel. The proposed plant
generating capacity could be increased by procuring additional fuel sources from another
palm oil facility owned by the company and from other facilities in the area. At larger
sizes, the plant would likely have more favorable economics, as could be determined by
preliminary further study (see Section 9.3.10 and Table 11-10). The study team discussed
the study results with the owner of facility and a copy of the report was provided.
        It should be noted that the facility would like to expand their processing
capabilities in the near future. This will likely require some sort of upgrade to the mill
power and steam systems similar to the configuration proposed for this study.




November 25, 2011                          11-10                              Final Report
                                     Table 11-10
                       Summary Results Southern Palm Oil Facility

Item                                       Original Study          Larger Facility
Gross plant capacity, MW                          7.0                     33.0
Net plant capacity, MW                            6.2                     29.1
Net sold to grid, MW                              5.4                     28.3
Investment, US$ million                          16.9                     46.6
Fuel type                                  Fiber, shell, and      Fiber, shell, empty
                                               biogas          bunch, biogas, and others
Total fuel cost, Baht/tonne                     0-200                    0-200
Operating hours per year                        7,919                    7,919
Revenue from EGAT, million Baht/year              77                     403.5
Internal rate of return, percent                 11.6                      25
Source of fuel supply (increase over
current needs):
 Fiber, tonne/yr                                38,500                  64,500
  Shell, tonne/yr                               20,000                  30,000
  Biogas, cu.m./yr                            3,570,000               3,570,000
  Other residues, tonne/yr                                             250,000




November 25, 2011                        11-11                             Final Report
                   12.0 SPP Program Regulations Review

         This section provides a review of the regulations for the Small Power Producers
(SPP) program. The SPP program was initiated by the National Energy Policy Council
and implemented by the Electricity Generating Authority of Thailand (EGAT),
Metropolitan Electricity Authority (MEA), and Provincial Electricity Authority (PEA).
The objectives of the SPP program are to encourage the participation of SPPs in
electricity generation, promote the use of domestic and renewable energy sources,
promote higher efficiency use of primary energy, and reduce the financial burden of
government investment in the electricity supply industry. The national and external
benefits of the SPP program include the conservation of fossil fuels, reduced fuel imports,
conservation of foreign hard currency, and distributed generation benefits. The intent of
the program is to realize these external benefits, yet result in a direct cost to ratepayers
that is no higher than the alternative of supplying electricity without SPP projects.
         Small rural industries engaged in power production from biomass may sell their
excess energy generation back to the electrical grid through the SPP program. However,
as of October 1999, only 6.8 percent of the total SPP capacity connected to the EGAT
system (1,491 MW) involved waste or renewable resources.10 The large majority of the
total capacity is natural gas based cogeneration. In the view of Black & Veatch, there are
several reasons why this is the case, and these will be discussed in this section. First,
however, an overview of the current SPP regulations and status of the program are given.

12.1 SPP Program Regulations Overview
        The SPP program was initiated by the National Energy Policy Council and
implemented by the Electricity Generating Authority of Thailand (EGAT), Metropolitan
Electricity Authority (MEA), and Provincial Electricity Authority (PEA). This section
discusses the SPP program and regulations.

12.1.1 Basis for the SPP Program
       The SPP Program was initiated based on the conclusions of the National Energy
Policy Council that:

        “generation from non-conventional energy, waste or residual fuels and
        cogeneration increases efficiency in the use of primary energy and by-product
        energy sources and helps to reduce the financial burden of the public sector with
        respect to investment in electricity generation and distribution.”




10
  Arthur Anderson, “Thailand Power Pool and Electricity Supply Industry Reform Study - Phase I Final
Report,” Volume 5, March 1, 2000.


November 25, 2011                              12-1                                  Final Report
        The national and external benefits of the SPP program include the conservation of
fossil fuels, reduced fuel imports, conservation of foreign hard currency, and distributed
generation benefits. The intent of the program is to realize these external benefits, yet
result in a direct cost to ratepayers that is no higher than the alternative of supplying
electricity without SPP projects.

12.1.2 Least Cost Planning and the SPP Regulations
         EGAT’s planning objective is to provide safe, adequate and reliable power
supplies to consumers in the least cost manner. The least cost provision means that when
the utility develops its system expansion plan, it plans to add capacity resources that will
minimize the cumulative present worth of incremental system costs (CPWC) to
ratepayers. Incremental system costs consist of fuel and operating costs, plus incremental
fixed costs associated with capital investments. EGAT periodically updates its least cost
system expansion plan, the current plan is its 1997 Power Development Plan, issued in
December, 1997.
         Should a biomass or other renewable generation alternative be able to displace a
part of the incremental capacity and energy in the least cost expansion plan and not
increase the incremental cost of serving load once payments to the biomass facility are
considered, then the plan including the biomass facilities would be preferred. This is
because ratepayers would be no worse off in that their direct costs are no higher than the
identified least cost plan, yet the nation would realize the additional benefits inherent in a
renewable plant. This, in essence, is the logic behind the SPP program. It encourages
biomass and renewable technologies if they are viable at the utility’s avoided cost.
Avoided cost is the cost that the utility would have incurred had it not been for the
purchase of capacity and energy from the (SPP) facility.

12.1.3 SPP Regulations

 12.1.3.1 Definition of an SPP. Under the Regulations for the Purchase of Power
from Small Power Producers, an SPP must utilize one of the following as fuel or prime
mover:
           Non-conventional energy such as wind, solar, or mini-hydro.
           Waste or residues from agricultural or industrial processes.
           Garbage or dendrothermal sources for fuel.
            Any fuel used for cogeneration provided that certain efficiency standards are
             met.
        Non-cogeneration use of petroleum, natural gas, coal and nuclear fuels are
specifically excluded except if the thermal energy produced by these fuels is
supplementary and does not exceed 25 percent of the total thermal energy used in
electricity generation each year.


November 25, 2011                           12-2                                Final Report
 12.1.3.2 Conditions for Purchase. The SPP Regulations establish the following
conditions for purchases from SPPs:
          EGAT will be the sole purchaser of electricity.
          The total capacity supplied by any SPP shall not exceed 60 MW at the
           connection point (90 MW in certain locations).
          The SPP must obtain and provide a copy of all required permits within
           18 months of the SPP contract and before delivery can begin.
          The utility will operate the SPP’s protective system and is able to make
           decisions related to system safety. The utility can also require the SPP to
           inspect and improve its distribution equipment if it may affect the utility’s
           system.
          A performance bond is required on the contract signing date, equal to
           5 percent of the present value of the total receivable capacity payments. SPPs
           receiving capacity payments must also deposit security against early
           termination equal to 10 percent of the capacity payment to be received in the
           first 5 years of the contract.
          SPPs are responsible for the plant interconnection costs and equipment
           inspections.

 12.1.3.3 SPP Payments. Payments to the SPP can consist of an energy-only
payment for electricity (kWh) delivered or may include an energy and capacity payment.
No capacity payments are made for contracts with a term of less than 5 years. For terms
of 5 to 25 years, capacity payments are equal to EGAT’s long-run avoided cost during the
contracted term.
        For SPPs receiving capacity payments, the energy payment is set equal to EGAT’s
long-run avoided energy cost resulting from the SPP purchase. For other SPPs, energy
payments equal EGAT’s short-run avoided energy cost resulting from the purchase.
Energy payments are based on time of day rates for peak, partial peak and off-peak hours.
The regulations also include a minimum take liability on behalf of EGAT, which
guarantees the purchase of power from an SPP of at least 80 percent of the SPP’s
availability. If this amount is not met, it can be made up the following year or else EGAT
will pay the SPP an energy payment for energy not taken.

 12.1.3.4 SPP Maintenance and Availability. To receive capacity payments, SPPs
must provide electricity during the months of March through June, and in September and
October, and electricity must be supplied not less than 7,008 hours per year. For biomass
and garbage-burning facilities, the annual hours must be at least 4,672 hours per year and
supply must occur from March through June. A monthly capacity factor of not less than
51 percent is also a condition, with payments for the month reduced if this condition is
not met. SPPs shall be able to reduce power supply during the utility off-peak demand


November 25, 2011                         12-3                               Final Report
period to no less than 65 percent of the contracted capacity (40 percent in the eastern gulf
provinces until 2001). In case of notification of need, the facility must be able to generate
with at least 30 minutes advanced notification.
        The quality of electricity must also generally conform to the utility’s
synchronization requirements. The SPP regulations also include a number of restrictions
on maintenance. Major overhauls must be approved by EGAT and scheduled at least
6 months in advance and must occur during the off-peak period. Also, the total period of
shut-down for maintenance is limited to 35 days in a 12-month period, although a carry
forward of 45 days is allowed from previous periods.

 12.1.3.5 Failure to Perform. Should the SPP be unable to supply at a monthly
capacity factor of at least 51 percent, capacity payments will be reduced by 50 percent
during the month. The capacity payment may also be reduced should the annual
minimum hours of supply not be achieved. Should the SPP be unable to provide output at
the level in the contract, the SPP will be provided 18 months in which to rectify the
situation, thereafter, the contracted capacity will be adjusted to reflect the facility
capability. Deductions in the capacity payment may also occur should the SPP not be
able to respond to dispatch instructions within the allotted time period.
        In the event that the SPP wishes to reduce its contracted capacity after at least half
the term has expired, it may do so provided adequate notice (between 1 and 3 years
depending on the reduction of capacity) is given.
        Should the SPP terminate the contract before the end of the term, the utility shall
recall the capacity payment equal to the difference between the capacity payment already
received and the capacity payment corresponding to the effective term, plus an additional
penalty of up to 10 percent if terminated within 5 years of the start of the contract.

 12.1.3.6 SPP Application Procedure and Evaluation Criteria. Candidate SPPs
must submit a proposal (to the Head Office of EGAT) and be approved into the SPP
program. The application shall include the following:
           Evidence of Certificate of Incorporation as a juristic entity and the
            Memorandum of Association of such juristic entity.
           A layout drawing showing the location of the power plant.
           Installation site of the generator.
           Description of the electricity generation process.
           The proportional amount of thermal energy used in electricity production
            with respect to the total amount of energy used in the total thermal process.
           Details of the generator(s), Name Plate Ratings and their specifications.
           The Single Line Diagram and the Metering and Relaying Diagram for
            interconnection to the Power Utility (PU) system.



November 25, 2011                            12-4                               Final Report
          The electrical capacity and energy to be supplied to the PU system at the
           connection point, together with the SPP’s plan for electricity generation and
           consumption as well as power consumption of other nearby juristic entities
           using power generated by the SPP.
          The contracted period during which the SPP shall generate and supply
           electricity to the PU system.
          The quantity of backup power required by the SPP from the PU.
          The number of staff involved with operation of the generating system
           together with details on their qualifications and their professional engineering
           licenses.
           The fuel consumption per year and the average lower heating value of the fuel
            used in electricity production and cogeneration.
       The evaluation criteria used by EGAT to evaluate the application shall include the
following, and applications should contain this additional information to facilitate the
evaluation:
          Appropriateness of Project
            Appropriateness of the project with respect to technical and engineering
             aspects.
            Experience of the SPP (the Bidder), partners, and parent companies.
            Financial status and availability of income sources of the project, including
             electricity customers and steam customers.
          Availability and Appropriateness of Fuels
            Reliability of fuel procurement.
            Suitability of fuel reservation and fuel transportation.
          Appropriateness of Site Location
            Appropriateness of the project site location as regards the security of the
             power system and the interconnection to the PU system.
            Environmental impact and the local public consent, including identifiable
             benefits resulting from the project.
          Appropriateness of Other Aspects
            Date to commence purchasing electricity, which will be based on
             precedence in time.
            Modifications of the model Electricity Purchase/Sales Contract.
           Technical Information
            The proportional amount of thermal energy to be used in thermal processes
              other than electricity generation in relation to the total energy production.
            The proportional amount of the sum of the electricity produced and one
             half of thermal energy to be used in thermal processes in relation to the
             energy from petroleum and/or natural gas (based on lower heating value).


November 25, 2011                          12-5                              Final Report
           Details of the power plant design and construction. For example: by
            which company is the power plant designed, and has there ever been any
            construction resembling the proposed one before?
           Schedules of the design period, the equipment delivery, the construction,
            and the operation startup.
           The date to commence electricity purchasing, which will be part of the
            Electricity Purchase/Sales Contract execution.
           Heat Balance Diagram.
         Information on Location
           Whether the SPP (the bidder) is the owner of the land where the power
            plant construction will be located or the land is to be rented or furnished by
            other means.
           Whether the land is in the area where water resources, fuels, and labor as
            well as other construction and power generating facilities can be easily
            supplied.
           Location of the power plant is in relation to power and steam customers,
            and to the PU connection point. A layout drawing detailing location and
            distance from the power plant should be attached.
           Feasibility for future expansion of power generating capacity and plan of
            the expansion if the SPP has developed it.
           Public relations plans to make known the power plant construction to the
             public in the project locality; if the bidder has prior experience in public
             relations work, details of the implementation and results accomplished
             should be submitted.
          Requests for Authorization
           Present evidence certifying that requests for authorization to the concerned
            authorities have been made for the construction of the generation facility,
            and for the generation and supply of electricity, including a study of
            environmental impact.
           Indicate the period of time during which authorization for construction of
            the facility, and for generation and supply of electricity, is expected to be
            granted.
         Finance and Income
           Provide financial statements, (e.g., income statement, balance sheet and
            cash flow, including at least three previous annual reports of the bidder
            and partners). If the documents cannot be provided, reasons must be given
            and other evidence of financial status must be provided so as to enable the
            evaluation of the bidder’s financial status and actual ability to operate the
            project.



November 25, 2011                        12-6                               Final Report
             Illustrate the project financing plan.
             Provide evidence of the project sponsor’s intention to offer a loan to the
              project.
             Provide the name list of electricity and steam users, together with the
              purchase amount of electricity and steam.
            Main Fuel and Procurement of Supplementary Fuels
             Provide evidence of fuel procurement, period of securing the fuels,
              transportation, transportation routes, and fuel storage.
             Plan for the use of supplementary fuels instead of main fuels, including
              details of such supplementary fuels procurement.
             Specifications of main fuels and supplementary fuels (e.g., gross calorific
              value, ash, and sulfur content in the case of coal).
             Fuel properties which have impact on the environment and proposed
              alleviation measures.
            Byproducts and Waste from the Power Plant
             Illustrate qualities and characteristics of waste created by the power plant,
              and the disposal plan.
             If byproducts from the power plant can be of use, what is the use, to whom
              they will be delivered or sold, what are the criteria of the purchase
              contract, and what will the price be?
            Administration and Management
             Detailed plan of the administration and management. For example, will
              the power plant monitoring be done by the bidder or by sub-contracting
              another party to perform the work. In the latter case, who will be
              contracted and what will be the principles specified in the hiring contract?
             Illustrate the plan for the power plant maintenance.

12.2 Current Status of the SPP Program
        Table 12-1 summarizes the status (as of February 2000) of power purchases from
SPPs. Currently there are 40 SPP projects supplying power to the grid. About half (21)
projects are supplying to the grid on a firm basis, and the remainder are supplying on a
non-firm basis. The table also lists the fuel types for the projects accepted into the
program. Of the 40 projects, 24 use biomass or waste as fuel. The number of projects is
encouraging; however, although biomass and waste fuels represent the majority of
projects, they are very small portion of the total SPP electrical capacity. As of
October 1999, only 6.8 percent (101 MW) of the total SPP capacity connected to the
EGAT system (1,491 MW) involved waste or renewable resources. 11 Furthermore, only

11
  Arthur Anderson, “Thailand Power Pool and Electricity Supply Industry Reform Study - Phase I Final
Report,” Volume 5, March 1, 2000.


November 25, 2011                              12-7                                  Final Report
three out of the 24 biomass projects were accepted into the SPP program on a firm basis.
The rest are to supply power on a non-firm basis and as such do not receive valuable
capacity payments from EGAT. An example of this are bagasse burning sugar mills,
fourteen of which have signed up to supply non-firm power. The sugar mills export their
excess power production when they are milling during the on-season, which is about four
months. To export firm power, the mill power systems would need to operate during the
off-season as well. This would typically require modification to mill power systems and
supplemental fuel if the excess bagasse is not available. Both investigations of sugar
mills for this study recommended changes to allow for year-round export of power on a
firm basis.


                                      Table 12-1
             Power Purchases from Small Power Producers as of February 2000

                                            Firm           Non-Firm             Total
Proposals submitted
  Number of projects                         67                26                 93
  Generating capacity, MW                 7,686.81           631.36            8,318.17
  Sale to EGAT, MW                        4,459.90           180.31            4,640.21
Accepted into the program*
  Number of projects                         30                23                 53
  Generating capacity, MW                 3,496.91           591.86            4,088.77
  Sale to EGAT, MW                        1,958.40           175.61            2,134.01
  Type of fuel**
     Waste                                     –                1                  1
     Bagasse                                   –               14                 14
     Paddy husk, wood chips                    3                3                  6
     Natural gas                              21                1                 22
     Coal                                      5                2                  7
     Oil                                       1                –                  1
     Biomass                                   –                1                  1
     Black liquor                              –                1                  1
Contracts signed
  Number of projects                         30                20                 50
  Generating capacity, MW                 3,496.91           556.40            4,053.31
  Sale to EGAT, MW                        1,958.40           149.57            2,107.97
Supplying power to the grid
  Number of projects                         21                19                 40
  Generating capacity, MW                 2,169.43           553.90            2,723.33
  Sale to EGAT, MW                        1,343.40           147.37            1,490.77
Source: NEPO website, http//www.nepo.go.th/power/pw-spp-purch00-02-E.html.
*
  Excluding Small Power Producers not presented in the Proposal Security and withdraw.
**
   Some plants use more than one type of fuel.


November 25, 2011                        12-8                                 Final Report
12.3 Black & Veatch Comments on Current Regulations
        As discussed in the previous section, the percent of biomass capacity in the SPP
program is small and mostly contracted on a non-firm basis. Black & Veatch feels that
there are several reasons for this relating to the current SPP program regulations (dated
January 1998), as discussed in this section.

12.3.1 Capacity and Energy Payments
       The present SPP regulations were established for payment of capacity and energy
generated by a biomass power plant based on the long-term avoided cost of a fuel oil
plant. This concept does not reflect the true nature of biomass power plant for the
following reasons:
           The capacities of most biomass power plants are less than 10 MW because of
            wide geographical distribution of the fuel. However, the fixed rate for the
            capacity payment is based on fuel oil power plants which have capacities up
            to 100 MW. Because of the smaller capacity and the effects of economies of
            scale, the cost per megawatt of a biomass power plant is normally higher than
            that for fuel oil power plants.

                                                                  Capacity Payment categorised
                                                                           by type of fuel
                            Term of Contract                             (Baht/kW/month)
                                                                 Natural          Fuel      Coal
                                                                  Gas          Oil/Others
             Greater than 5 years but not exceeding 10 years:     164           203           229
             Greater than 10 years but not exceeding 15 years:    204           253           285
             Greater than 15 years but not exceeding 20 years:    227           281           317
             Greater than 20 years but not exceeding 25 years:    302           374           422


           The fixed rate for the energy payment is based on the net plant heat rate for a
            combined cycle power plant, which is 9,070 kJ/kWh or 8,600 Btu/kWh.
            However, biomass power plants, which are based on the use of steam turbine
            thermal cycles, have higher heat rates ranging from 17,800 to 22,000
            Btu/kWh. This is due to the lower efficiency of this type of thermal cycle and
            the high moisture content and low heating value of biomass fuels. The higher
            the plant heat rate, the higher the cost to produce electricity from the plant.
            Thus, biomass plants are less energy efficient and more costly to operate than
            power plants operating on fossil fuels.
        Thus, instead of providing an incentive to power produced from biomass, the SPP
regulations specify energy and capacity payment rates that are two low for biomass plant
owners to obtain investment returns comparable to fossil fuel plants.




November 25, 2011                               12-9                                  Final Report
12.3.2 Contract Term
        One objective of this study was to promote biomass projects that could obtain
long-term (greater than 5 years) firm contracts, which are required to receive capacity
payments. Although capacity payments provide substantial revenue to power projects,
only three out of the 24 biomass projects accepted so far into the SPP program receive
such payments. The primary reason for this is that it is difficult to maintain an assured
and constant supply of biomass for long periods of time. This is due to the following the
reasons:
          In general, biomass fuels are a byproduct of some higher value process. For
           this reason, the amount of biomass waste generated can fluctuate greatly
           depending on such factors as market conditions, crop output, etc.
          The value of biomass waste byproducts is low compared to the primary
           products (for example, the price of rice husk compared to the price of rice
           paddy). Therefore, most biomass producers are not interested in long-term
           supply contracts and prefer shorter-term annual contracts.
           Most agricultural businesses providing sources of biomass are family
            managed. If the second generation is not willing to continue, the business
            will be discontinued.
        For the above reasons, most potential biomass suppliers are uncomfortable
entering into long-term supply contracts. However, power plant utilities and project
financiers may not be willing to build or lend to biomass facilities unless they have
assurances of adequate fuel supply for the life of the project, which would likely be
twenty years or greater.

12.3.3 Comments on EGAT Regulations
       The Black & Veatch study team has comments on specific regulations as
discussed below.

 12.3.3.1 Minimum Take Liability
       The SPP regulations include specifications on minimum take liability (No. 4, Item
4, page 19/28):

       “EGAT will purchase power from the SPP in the amount of no less than 80
       percent of the SPP’s availability in a particular year...”

        Black & Veatch comment – EGAT should purchase all of the power generated by
the biomass power plants because (1) the plants are time consuming to start up and cannot
vary output easily (they should be considered as base load plants as opposed to peaking
plants); and (2) total biomass power plant capacity is small, and has minimal effect on
the whole grid system.



November 25, 2011                        12-10                              Final Report
 12.3.3.2 Generation Shortfall (Item K.3 page 9/28)
       The SPP regulations include specifications on generation shortfall (Item K.3 page
9/28):

       “In case that the SPP is unable to increase its generation for supplying within the
       duration period in accordance with the PU’s instruction as specified in Item I 1.3,
       the PU shall pay the SPP capacity payment for that month by deducting 4 percent
       per day of the capacity rate specified in the PU’s announcement for every day
       that the SPP is unable to follow the PU’s instruction.”
        Black & Veatch comment – EGAT should not penalize the biomass power plant
owners if the generation shortfall is caused by fuel shortage. As discussed in the section
on contract terms, fuel supply can be largely uncontrollable. For example, during
construction booms, rice husk is in high demand from brick manufacturers and the price
of rice husk may become too expensive for electricity generation. Fuel supply can also be
greatly affected by hydrological factors. The difference between the maximum and
minimum fuel supply can be up to 50 percent due to climatic variations (see sugarcane
production in Figure 12-1).
        Such uncontrollable factors result in investors and lenders who are unwilling to
accept the risk of fluctuating fuel supply and the loss of the capacity payments. The study
team suggests that plant operators have the flexibility to makeup shortfalls without
penalty during periods in which the plant is running again.




             Figure 12-1. Variation in Sugarcane Output Between 1993 and 1999.




November 25, 2011                            12-11                                  Final Report
 12.3.3.3 Period of Sale
        Certain periods of sale are required to qualify for the firm capacity payments
(Item I.1 page 6/28):

       “For the types of generation processes defined under Item B.2, the annual hours
       must be no less than 4,672 hours per year and generation and sales must include
       the period of March, April, May, and June.”

        Black & Veatch comment – some biomass fuels are seasonal with periods that
conflict with the present regulation requirements. For example, bagasse is available only
from December through April. It is partly for this reason that none of the sugarcane mills
enrolled in the SPP program have firm contracts with EGAT. In order to generate power
during the off-season, mills would either have to conserve bagasse or buy supplemental
fuels.

12.4 Conclusion
        Owing to the existing regulations and other factors, very few biomass power
plants have sold electricity to the grid through firm contracts. Other reasons for the lack
of biomass-based power generation in Thailand include:
           Energy prices do not reflect external social costs such as air pollution, carbon
            dioxide emissions, socioeconomic impacts, fuel imports, etc.
           Biomass energy projects suffer from not being in regular competition with
            conventional energy sources. For example, power purchase agreements are
            often written to favor conventional energy projects and do not consider the
            special requirements of renewable energy technologies.
           Investors or lenders would like to minimize biomass fuel supply risk simply
            by establishing long term supply contracts, but these are very difficult to
            achieve. Alternative methods of risk management are often not explored.
           Host facilities are often not familiar with the power generation business and
            are wary of making large investments in businesses outside their core
            experience.
          Biomass plants are small compared to conventional energy plants. The small
           size and the technology type results in relatively high capital costs.
           Furthermore, development costs for biomass plants are similar to larger
           plants, even though the capacities are much smaller.
       The combination of high up-front capital costs, unfamiliar technology, and
unmanageable fuel supply risk, makes financing of biomass projects more difficult and
expensive than conventional energy plants. The result is that those plants which are built
may not be able to produce electricity at rates as low as conventional technologies, such
as combined cycle plants burning natural gas.




November 25, 2011                          12-12                                Final Report
       To encourage biomass and other renewable energy sources, governments around
the world have instituted a variety of measures including investment credits, production
subsidies, guaranteed buyback prices, and capacity mandates. Direct increases in
capacity and energy prices in Thailand may not offer the total solution for renewable
energy projects; several measures should be examined:
           Set a target for biomass and other renewable power plant generating capacity
            for the next 10 years.
           Establish a competitive subsidy scheme to encourage development of new
            renewable energy power plants.
           Promote marketing of biomass and other renewable energy sources as
            “green” energy to encourage public support of projects.
           Collaborate with specific high potential industries (such as sugar cane
            milling) to promote higher efficiency plants and expanded biomass power
            generation.
            Investigate alternative funding mechanisms to provide long-term loans with
             low interest rates to biomass projects (commercial banks normally provide
             limited loans with high interest rates).
        Any incentive offered to renewables should be should cognizant of the
liberalization of the electricity supply industry and flexible enough to respond to changing
market conditions.
        NEPO has begun a successful campaign to promote renewable energy. This effort
will be further strengthened by the recent commissioning of an initiative to subsidize up
to 300 MW of renewable energy projects through the Energy Conservation Promotion
Program (ENCON) fund. The capacity, which will be bid on a competitive basis, will be
an important step to further the long-term energy policy goals of Thailand.




November 25, 2011                         12-13                               Final Report

				
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