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P04d - 2010 Biomass Power BRAZIL
P04d - 2010 Biomass Power BRAZIL
P04d - 2010 Biomass Power BRAZIL
Renewable Energy
journal homepage: www.elsevier.com/locate/renene
Review
Analysis on the feasibility of biomass power plants adding to the electric power
system e Economic, regulatory and market aspects e State of Par, Brazil
Gonalo Rendeiro a, *, Emanuel N. Macedo a, Giorgiana Pinheiro b, Joo Pinho c
a
Energy Biomass Environment Group, Federal University of Par, Augusto Corra 1, 66075-110 Belm, Par, Brazil
Research and Development, Energy Efciency Department, Centrais Eletricas do Par, Augusto Montenegro, 66820-000 Belm, Par, Brazil
c
Group of Studies and Development of Energy Alternatives, Federal University of Par, Augusto Corra 1, 66075-110 Belm, Par, Brazil
b
a r t i c l e i n f o
a b s t r a c t
Article history:
Received 28 August 2010
Accepted 5 November 2010
Available online 9 December 2010
This paper presents an analysis of the feasibility of implementing biomass power plants, through thermoelectric power generation, and adding such plants to the electric system of the local electric utility by
means of independent power production. Economic, regulatory, and market issues are also addressed.
The biomass being considered is produced by the lumber sector, since that is one of the industrial
sectors generating the largest amount of residues in a concentrated manner in the region under study,
and also considering the fact that the disposal of such residues is currently difcult for the lumber
companies.
The locations with the largest production of residues, as well as the size of potential plants, are
identied, the generation costs of the plants calculated, and the feasibility for implementing the plants is
evaluated considering the market and the regulation of the Brazilian electric power sector.
2010 Elsevier Ltd. All rights reserved.
Keywords:
Renewable sources
Biomass
Residues
Costs
Viability
1. Introduction
Biomass made up of residues from industrial processes is one of
the alternatives considered for power generation through nonconventional sources and/or technologies. Agroindustry and the
forest industry, including the sugar cane, paper and pulp, and
lumber industries, are examples of sectors that produce residues
with an important potential for energy utilization in Brazil, through
direct ring of such residues in plants that generate power with
a technology based upon steam cycle.
In the Brazilian State of Par, the lumber sector, in particular,
generates a signicant amount of residues e approximately, 6 million
cubic meters of residues annually. Out of that volume, some 3.2 million
cubic meters have a potential for utilization in power generation [1].
In thermoelectric power plants, the residues produced in Par
State that can be utilized account for a potential of around 160 MW.
That potential is distributed throughout the States municipalities
in the many lumber companies, which are usually located near
urban centers. Considering the maximum demand by the municipalities and the geographic distribution of potential generators,
such generation would have considerable penetration in some
regions of the State.
Since in the case of power generation using biomass residues the
transport costs may render a power plant unfeasible, implementing
the plant as near as possible to the location where the residue is
generated is desirable [2]. Since the residue-producing companies
are usually located near urban centers, and the power delivered by
those plants is small (between 500 kW and 10,000 kW), the power
plants may be connected to the electric system at medium voltage
level, with the generation being distributed in the municipalities [3].
Thus, the objective of this paper is to present an analysis on the
feasibility of using the biomass resulting from residues, in the
region where they are produced, for the generation of electric
power by thermoelectric power plants and adding them to the
electric system considering economic, regulatory and market
issues. It is also intended for a preliminary discussion of adjustments in the legislation, to better render such biomass utilization
feasible.
2. Residue biomass potential
This section presents the production of residues and its corresponding energy potential for the area under analysis e the State of
Par, Brazil (Fig. 1). In Par, the lumber sector is currently the main
1679
3. Legal aspects
This section introduces overall comments on the legal aspects
regarding independent power production, incentives to renewable
sources, and market aspects of the Brazilian Electric Power Sector,
which will all be considered in the feasibility analysis for implementing the biomass-based power plants.
Table 2 shows the main changes in the Brazilian Electric Power
Sector in the past decade, which are also of relevant importance for
the feasibility of adding distributed power generation from
renewable sources to the electric power grid of the utilities.
Residue producers studied here may become self-producing or
Independent Energy Producers (Produtor Independente de
Energia e PIE) by trading the generation surplus or the entire
energy generated, if they are authorized to produce and trade
electric power [7].
Such PIEs will be able to sell energy in the Regulated Contracting
Environment (Ambiente de Contratao Regulada e ACR), where
the price of energy is regulated by the granting power through
auctions or calls for bids, if they are characterized as generation
distributed in the electric power distribution system [8]. In such
environment, MW h prices will be based on by the Brazilian
Reference Value (Valor de Referncia e VR), the adjusted value of
which, for contracts entered into in 2009, is US$ 75.57/MW h (on
the basis of June/2008). PIEs may also sell energy in the Free
Contract Environment (Ambiente de Contratao Livre e ACL) to
trading agents by means of free trade [9]. Considering that the
Table 1
Typical characteristics of the biomass used [5].
Biomass
Forest Residues
200
30
80
19
1680
Table 2
Models of the Brazilian electric power sector [6].
Old model (until 1995)
Regulated market
Determinative planning e electrical
systems planning coordination group
Purchase: 100% from the market
Free market
Indicative planning by the National
Council for Energy Policies (CNPE)
Purchase: 85% from the market (until Aug./2003)
and 95% from the market (until Dec./2004)
Surplus/decit of the energy balance settled
at the wholesale electric energy market
Table 3
Economic analysis e premises.
Items
Biomass cost
Taxes
Discount rate
Depreciation time
Preventive/corrective
maintenance
Salary of operators
Nr. of operators
Nr. of annual
operating hours
Losses
Price
Unit
Notes
US$
0.34
14.00
25.00
3.00
%
% pa
Year
%
996.82
10.00
US$
e
8640.00
Hour
10.00
Table 4
Unit costs for the investment.
Power (kW)
50
200
>1000
11,640.21
5291.00
1587.30
1681
Table 5
Economic parameters for enterprises in the isolated system.
Parameters
NPV (US$)
Trade price (US$/MW h)
Payback (years)
Generation cost (US$/MW h)
50
200
1000
5000
10,000
20,000
50,000
277,909.47
764.55
8.04
764.03
502,106.11
284.13
8.07
284.19
761,428.31
77.78
8.02
77.64
3,738,208.88
65.08
8.1
65.20
7,646,803.72
64.02
8
63.83
15,088,755.15
62.96
8.06
62.96
37,602,228.57
62.43
8.08
62.47
Table 6
Economic parameters for enterprises in the interconnected system.
Parameters
NPV (US$)
Trade price (US$/MWh)
Payback (years)
Generation cost (US$/MWh)
50
200
1000
5000
10,000
20,000
50,000
274,405.64
925.93
8.1
763.36
500,852.39
358.20
8.08
284.13
759,547.73
100.00
8.03
77.62
3,822,615.56
87.83
8
65.36
7,627,997.95
86.24
8.01
63.80
15,051,143.60
85.19
8.07
62.94
37,508,199.69
84.66
8.09
62.46
turbines. The main objective is to determine the cost of generation, as well as the trade price for a payback time of around
eight years, a period considered reasonable for biomass-based
power generation plants [15] and, thus, to verify the feasibility
of implementing biomass-based plants of several sizes, taking
into consideration the costs of investment, maintenance and
operation, and the legislation for trading energy in effect in the
electrical sector. Economic parameters presented here to
provide the grounds for the analysis are the Net Present Value
(NPV) and the Payback (PB). It was also calculated the generation cost (GC), and determined a trade price for approximately
eight years payback.
The economic analysis was performed using the Eqs. (1)e(7)
[16] as follows.
NPV I CNU
n
X
VPa
(1)
j1
CNU
Cn
1
in
n1
(2)
VPa
a1 in 1
i1 in
(3)
Payback KCLneg
jCLneg j
CLpos CLneg
(4)
GC
CCVa
fc Pc Dt
(5)
CCVa I CRp VPa
MAR1 MARn
1 MARn 1
(6)
CRp
Rj
k
X
X
Ij
j1 m1
1 MARTj
!
(7)
1682
1683
It can be noticed that for output powers higher than 1000 kW,
the biomass cost that renders the business unfeasible drops
considerably in relation to smaller power plants. That is due to the
large amount of biomass required for operating the larger power
plants, if compared to smaller plants, and the value remains
virtually constant, around US$ 3.44/ton, both for the isolated and
the interconnected systems.
Such values were obtained by considering that all the biomass
required for the power plant would be purchased, that the specic
consumption is 2.5 kgbiomass/kW h for powers higher than 1000 kW,
and 5 kgbiomass/kW h for powers lower than 1000 kW [15], and they
represent the total costs including biomass transport to the power
plant.
Figs. 10 and 11 show the commercialization prices required to
continue with an 8-year payback. When all the biomass is
purchased at its maximum price, the generation cost increases by
about 10%e20%.
5. Conclusions
1684
some plants being lower than 1000 kW. The utilization of the
biomass that is produced becomes more feasible for higher output
powers, which can be obtained by concentrating the residue
production of one municipality or region for power generation in
a single plant. And for that to be possible, the cost of transport and
purchase of biomass, and the fuel (biomass) at no zero cost
anymore, must be considered, whereby the business is only feasible
with biomass costs of up to US$ 3.44/ton.
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