Seminar Brussels Eric ASEAN Market for Cogeneration and...

EC-ASEAN COGEN Programme Phase IIIProven, Clean & Efficient Biomass, Coal, Gas Cogeneration

The EC-ASEAN Business Facilitator1

Eric Chanfreau

ASEAN Market for Cogeneration and Business Opportunities


25 February 2004Hilton City Hotel

Brussels, Belgium




PresentationPresentation OutlineOutline

1. What is COGEN 3 ?

2. Full Scale Demonstration Projects

3. 145 New Cogeneration Projects

4. Emerging trends and Case studies

5. Financing Power Projects in ASEAN

6. Conclusions



An economic cooperation programme between: European Commission (EC) & Association of South East Asian Nations (ASEAN)

• Funded by the EC (25 M EUR)

• Implementation: Jan 2002 – Dec 2004

• Coordinated by Asian Institute of Technology (AIT) & Carl Bro International AB

EC-ASEAN COGEN Programme Phase III (COGEN 3)

EC-ASEAN COGEN Programme Phase III (COGEN 3)



• Promote the use of Cogeneration in ASEAN

• Promote proven, clean and efficient European

Cogeneration technology

• Create business opportunities for cogeneration within

the ASEAN industrial sectors using Biomass, Coal and

Gas as fuels

COGEN 3 ObjectivesCOGEN 3 Objectives



•European Equipment suppliers

•European developers, banks and financiers

•ASEAN cogeneration project developers

•ASEAN suppliers

• ASEAN banks and financiers

•ASEAN policy makers

StakeholdersStakeholders



Clients in Europe

Clients in ASEAN

COGEN 3 OrganisationCOGEN 3 Organisation

COGEN 3 European Office (5)

Malmö, Sweden

COGEN 3 Programme Management Unit (22)

Bangkok, Thailand

COGEN 3

ASEAN Country Coordinators:

7 Countries (24)



The Energy Conservation Center of Thailand, Bangkok

The Research Center for Energy and Environment, Hanoi

SIRIM,Shah Alam

Energy Development and Utilization Foundation, Manila

Energy Ventures, Singapore

Research and Development Center for Energy and Electricity Technology, Jakarta

Ta Prohm Consultants, Phnom Penh

COGEN 3 Country CoCOGEN 3 Country Co--ordinatorsordinators



• Technology selection and Business Facilitation

Feasibility studies (Techno-Financial Analysis)

• Tools for development, assessment and

implementation of cogeneration projects

• Full Scale Demonstration Projects

• Financial packaging

• Supplier Matchmaking

Support to Cogeneration Project DevelopmentSupport to Cogeneration Project Development



• Directories on European and ASEAN equipment suppliers and service providers

• Report on Cogeneration Technologies

• Cogeneration Project Development Guide

• Sectoral Report on Energy Intensive Industries

• National Cogeneration Policy Reports

Technical, Business and Market InformationTechnical, Business and Market InformationTechnical, Business and Market Information



• Technical issues

• Policy issues

• Financial issues

• Environmental issues

Training Seminars, Workshops, and Study Tours, focused on:

Training Seminars, Workshops, and Study Tours, Training Seminars, Workshops, and Study Tours, focused on:focused on:










6. Conclusions



The implementation of proven cogeneration technology in a full scale project, in order to demonstrate its technical reliability and economic viability.

An FSDP is a showcase in ASEAN aiming to convince other potential end-users to select European cogeneration technology.

Full Scale Demonstration ProjectsFull Scale Demonstration ProjectsFull Scale Demonstration Projects



Support to Cogeneration Projects and Full Scale Demonstration Projects (FSDPs)

Support to Cogeneration Projects and Full Scale Demonstration Projects (FSDPs)

• Active facilitation among stakeholders of cogeneration projects

• Financial packaging, networking and fund mobilisation

• Selected projects (FSDP) will get support with investment, training and monitoring



• Cogeneration

• Implemented in ASEAN

• European equipment

• Proven technology

• Biomass, coal and/or gas as fuels

• Compliance with national regulation

• Implemented before December 2004

FSDP Eligibility CriteriaFSDP Eligibility Criteria



• 15% of eligible equipment cost

• Ceiling at 400,000 Euro

• Support for training, monitoring and advertising

Support to FSDPSupport to FSDP



• Capacity: 0.3 – 41 MW (Total: 174.50 MW)

• Total Amount of EC support: 6,835,853 EUR

• Total Eligible Cost: 91,996,344 EUR

• Total Investment: 208,841,000 EUR

24 Selected FSDP Candidates 24 Selected FSDP Candidates 24 Selected FSDP Candidates


The EC-ASEAN Business Facilitator176 projects in Indonesia

5 projects in Thailand

1 project in Cambodia

1 project in Vietnam

1 project in Philippines

8 projects in Malaysia

2 projects in Singapore



▼

♣

▼

♣♣

∗

▼▼

▼♣♣●▲

●●

♣♣♣

▲

▲

■▼▲■

Bagasse : 2▼ Rice husk : 6♣ Palm oil waste: 8

• Wood waste : 3 ▲ Biogas : 4

* Bio-oil : 1










6. Conclusions



145 New Cogeneration Projects in 145 New Cogeneration Projects in South East ASIASouth East ASIA

Developing Cogeneration Projects by Sector

Sector No. of CapacityCB ID MY PH SG TH VN Projects (MW)

Cement - 1 - - - - 1 2 14 Chemical - - - 2 - - - 2 27 Food* - 4 - 1 - 11 1 17 73 Land field&Waste - - - - - 3 - 3 2 Palm oil 1 4 11 - - 1 - 17 106 Power&Utilities** 1 6 1 1 - 5 - 14 300 Pulp&Paper - 2 - 1 - 1 3 7 150 Rice 5 3 3 5 - 10 1 27 240 Sugar - 2 - 6 - 7 3 18 179 Textile - 4 - - - 6 2 12 162 Unspecified - 11 1 - - 3 2 17 313 Wood - - 2 4 2 - 1 9 15

7 37 18 20 2 47 14 145 1581

Note:* Including Fruit, Cassava & starch, Tea, Farm, Livestock, Piggery and Tannery** Including Airport, Army, Commercial complex, IPP and SPP

Country



ASEAN Cogeneration Project PotentialASEAN Cogeneration Project Potential

2 2 3

912

7

1718

141717

27

0

5

10

15

20

25

30

Cem

ent

Che

mical

Food*

Land

field&

Was

te Palm

oil

Power&Utilit

ies** Pulp&

Paper

Rice

Suga

r Tex

tile U

nspe

cified

Wood Sector

No.

of p

roje

ct (s

)



ASEAN Cogeneration Project PotentialASEAN Cogeneration Project Potential

14 27

73

2

106

150

240

179162

15

300 313

0

50

100

150

200

250

300

350

Cem

ent

Che

mical

Food*

Land

field&

Was

te Palm

oil

Power&Utilit

ies** Pulp&

Paper

Rice

Suga

r Tex

tile U

nspe

cified

Wood Sector

MW










6. Conclusions



Emerging trend in biomass power generation/cogeneration

Emerging trend in biomass power Emerging trend in biomass power generation/cogenerationgeneration/cogeneration

• Sugar industries – shift from low pressure into high pressure system + electricity export

• Palm oil industries - shift from low pressure into high pressure system + electricity export

• Rice industries – new medium pressure and high pressure system

• Wood industries – new medium pressure and high pressure system

• High pressure system with mixed fuel firing



• Old cogeneration plants (20 to 50 years)

• Low pressure boilers 20 to 30 bar and less efficient back pressure turbine

• Not possible to sell electricity in the past

• Seasonal operation using only bagasse

Sugar mills: Energy situationSugar mills: Energy situationSugar mills: Energy situation

Process energy required:25-30 kWh/tonne of sugarcane0.4 tonne of steam

Waste:290 kg Bagasse ~ 100 kWh

1 tonne of sugarcane

100 - 121 kgsugar



Sugar mills: Emerging trendSugar mills: Emerging trend

• Need to replace old cogeneration system

• Good potential for high pressure (over 60 bar, 4800C) boilers and efficient extraction condensing turbines

• Excess power exported into grid

• Use of multi-fuel boilers

• Plant operation throughout the year

• Already few sugar mills started implementing high pressure boilers and efficient turbo generator systems



Location Thailand, Vietnam, Philippines, IndonesiaSector SugarMill capacity 5,000 – 20,000 tonnes per day Size of project 5 – 50 MWTechnology High pressure steam boiler (> 40bar) +

extraction condensing steam turbine Fuel BagasseInvestment cost 1,000 – 1,500 EUR/kWOwnership structure Corporation / professionally

managedOther information

Other biomass fuels (rice husk and wood wastes) may be used as secondary fuelsExcess power to be sold to the grid



Sugar industries: Fuel availability and cogeneration potential

Sugar industries: Fuel availability and cogeneration potential

2,0306,09021,000Philippines

5,22015,66054,000Thailand

11,40734,220118,000 Total

1,1603,48012,000Vietnam

2,9978,99031,000Indonesia

Max. Power Generation Potential (GWh/year)

Bagasseproduction(1,000 tonnes)

Sugar cane production (1,000 tonnes)

Country

Bagasse = Sugar cane * 0.29; 1 kWh = 3 kg of bagasse (including steam for process)



Owner/Developer : Mitr Phol Sugar Corporation Limited

Industry : Sugar

Size : 27,000 TCD (2.25 million TCY)

Location : Dan Chang, Suphanburi province

Existing equipment : Consisting of several old boilers and turbines

New boilers : 2 x 120 tph, 68 bar, 5100C

New turbine : Extraction condensing turbine (41 MW gross)

Emerging trend in sugar mill cogeneration: Dan Chang Bio Energy Project

Emerging trend in sugar mill cogeneration: Emerging trend in sugar mill cogeneration: Dan Chang Bio Energy ProjectDan Chang Bio Energy Project



Fuel : Bagasse, cane leaves, wood bark and rice husk

Project status : Commercial operation is expected in March 2004

Off-taker : Electricity Generation Authority of Thailand (EGAT)

Electricity export to EGAT

: 25 MW during peak hours

16 MW during off-peak hours

Export tariff : 2.14 Baht/kWh (grid); 1.85 Baht/kWh (sugar mill)

Management : Special Purpose Company

Emerging trend in sugar mill cogeneration: Dan Chang Bio Energy Project

Emerging trend in sugar mill cogeneration: Emerging trend in sugar mill cogeneration: Dan Chang Bio Energy ProjectDan Chang Bio Energy Project



• Old cogeneration plants (20 to 50 years)

• Low pressure boilers 20 to 30 bar and less efficient back pressure turbine

• Not possible to sell electricity in the past

• Seasonal operation using only fibre and shell

Palm oil mills: Energy situationPalm oil mills: Energy situationPalm oil mills: Energy situation

1 tonne of freshfruit bunches

Process energy required:20-25 kWh/t0.73 tonne of steam

Waste:600-700 kg POME ~ 20 m3 biogas190 kg fibers + shells230 kg empty fruit bunches

200 kgpalm oil



Palm oil mills: Emerging trendPalm oil mills: Emerging trendPalm oil mills: Emerging trend

• Need to replace old cogeneration system


• Excess power exported into grid

• Use of empty fruit bunches, fibre and shell

• Plant operation throughout the year

• Already few palm oil mills started implementing high pressure boilers and efficient turbo generator systems



Palm oil industries: Fuel availability and cogeneration potential

Palm oil industries: Palm oil industries: Fuel availability and cogeneration potentialFuel availability and cogeneration potential

7,05617,64042,000Malaysia

50126300Philippines

3869662,300Thailand

11,69329,23269,600Total

4,20010,50025,000Indonesia

Max.PowerGeneration Potential (GWh/year)

Residue production(1,000 tonnes)

FFB production (1,000 tonnes)

Country

Residue = Fresh Fruit Bunch * 0.42; 1 kWh = 2.5 kg of residues (including steam for process)



Location Malaysia, Indonesia

Sector Palm oil

Mill capacity 30 – 120 t FFB/h

Size of project 1 – 20 MW

Technology High pressure boiler (>40 bar) + Extracting condensing steam turbine

Fuel Palm oil wastes (Empty Fruit Bunches (EFB), fibres, shells, …)

Investment cost 1,000 – 1,500 EUR/kW

Ownership structure Corporation / family owned

Other information

EFB is a new fuel

Excess power to be sold to the grid



Emerging trend in palm oil mill cogeneration: TSH Bio-Energy

Emerging trend in palm oil mill cogeneration: TSH Bio-Energy

• Owner : TSH Bio Energy Sdn Bhd

• Location : Kunak, Sabah

• Size : 866 MT/day @ 260,000 MT/yr

• Capacity : 14 MW

• Boiler : 80 tph, 70 bar at design and 58 bar at actual, 402 deg C

• Supplier : Babcock & Wilcox Volund

• Fuel : EFB, mesocarp fiber and palm kernel shell

• Electricity : Sales to Sabah Electricity Sdn Bhd



• Only few plants implemented so far

• Revenue from ash sales (50 to 100 USD/ton)

• Rice husk is also fired with wood waste and bagasse

• Dumping or open burning is also common

Rice mills: Energy situationRice mills: Energy situation

Process energy required:Paddy milling and drying: 30-60 kWh/tonne paddy

1 tonne ofpaddy

650-700 kgwhite rice

Waste:220 kg husks ~ 150 kWh



Rice mills: Emerging trendRice mills: Emerging trend


• Good potential to generate excess power to export to grid

• Separate isolated plants generating only power is also popular



Family owned and managed

Ownership structure

1,200-2,000 Euro/kWInvestment cost

Boiler + Steam TurbineTechnology

0.5-20 MWSize of energy plant

200-1,000 tonnespaddy/day

Capacity

RiceTypical Characteristics



Rice industries:Fuel availability and cogeneration potential

Rice industries:Fuel availability and cogeneration potential

2934402,000Malaysia

1,6132,42011,000Philippines

3,2274,84022,000Thailand

16,72025,080114,000Total

4,1076,16028,000Vietnam

7,48011,22051,000Indonesia

Max. Power Generation Potential (GWh/year)

Rice husk production(1,000 tonnes)

Paddy production (1,000 tonnes)

Country

Rice husk = Paddy * 0.22; 1 kWh = 1.5 kg of rice husk (including steam for process)


The EC-ASEAN Business Facilitator

Chia MengRice husk plant in Thailand

2.5 MW Steam turbine

Boiler: Reciprocating inclined grate type. Capacity 17 tph, 35 bar, 420 oC

In operation since 1997 (COGEN phase 2 Full Scale Demonstration Project)

Steam used for drying of rice paddy

By-product: Ash sold to steel industries

ChiaChia MengMengRice husk plant in ThailandRice husk plant in Thailand

2.5 MW Steam turbine

Boiler: Reciprocating inclined grate type. Capacity 17 tph, 35 bar, 420 oC

In operation since 1997 (COGEN phase 2 Full Scale Demonstration Project)

Steam used for drying of rice paddy

By-product: Ash sold to steel industries



• 40 MW cogeneration

• Chilled water 30,000 RT

• Natural gas or Jet A1

• Operation since 1997

Case 1: Gas Cogeneration in the Kuala Lumpur International Airport (1)

Case 1: Gas Cogeneration in the Case 1: Gas Cogeneration in the Kuala Lumpur International AirportKuala Lumpur International Airport (1)(1)



Configuration

• Gas Turbine Generator20 MW x 2 units

• Heat Recovery Steam Generator40 tph x 2 units

• Auxiliary Gas Boiler 25 tph x 2 units40 tph x 1 unit

• Steam Absorption Chiller30,000 RT (2,500 RT x 12 units)

Case 1: Gas Cogeneration in the Kuala Lumpur International Airport (2)

Case 1: Gas Cogeneration in the Case 1: Gas Cogeneration in the Kuala Lumpur International Airport (2)Kuala Lumpur International Airport (2)



• 25.8 MW cogeneration

• Chilled water 30,000 RT

• Natural gas

• Operation since 1996

Case 2: Gas Cogeneration in Petronas Tower, Kuala Lumpur (1)

Case 2: Gas Cogeneration in Case 2: Gas Cogeneration in PetronasPetronas Tower, Kuala LumpurTower, Kuala Lumpur (1)(1)

Petronas Tower (452 m)Petronas Tower (452 m)



Case 2: Gas Cogeneration in Petronas Tower, Kuala Lumpur (2)

Case 2: Gas Cogeneration in Case 2: Gas Cogeneration in PetronasPetronas Tower, Kuala LumpurTower, Kuala Lumpur (2)(2)

Configuration

• Gas Turbine Generator4.2 MW x 2 units8.7 MW x 2 units

• Heat Recovery Steam Generator10.7 tph x 2 units18.7 tph x 2 units

• Auxiliary Gas Boiler 47 tph x 2 units• Electrical Centrifugal Chiller

15,000 RT (5,000 RT x 3 units)• Steam Turbine Centrifugal Chiller

15,000 RT (5,000 RT x 3 units)• 4 km chilled water network of pipes


The EC-ASEAN Business Facilitator

Case 3: Cogeneration in an Industrial Estate Case 3: Cogeneration in an Industrial Estate (1)

514 MW electricity• 6 x 35 MW gas turbines• 2 x 152 MW steam turbines• 2 x Circulating Fluidised Bed Boilers• 4 x Heat Recovery Units

Primary fuels: • Natural gas • Indonesian bituminous coal

Back up fuel:• Diesel oil

In operation since 2000

Supplies: • Electricity, steam (200 tph) and demineralised water (150 m3/h) to industrial estate and the plant

• Electricity to grid



• One of the largest Cogeneration investments in Southeast Asia

• Base-load power to state utility Electricity Generating Authority of Thailand (EGAT) under a 25-year Power Purchase Agreement (PPA)

• PPA provides EGAT with secure power at a reasonable price

• Provides the sponsors with a secure return on investment

Case 3: Cogeneration in an Industrial Estate (2)Case 3: Cogeneration in an Industrial EstateCase 3: Cogeneration in an Industrial Estate (2)



Case 4: Gas Industrial Cogeneration – Thailand (1)

Engine with Generator

Case 4: Gas Industrial Cogeneration Case 4: Gas Industrial Cogeneration –– ThailandThailand (1)

Engine with GeneratorEngine with Generator




Cogeneration Flow Diagram

Case 4: Gas Industrial Cogeneration Case 4: Gas Industrial Cogeneration –– ThailandThailand (2)(2)

Cogeneration Flow DiagramCogeneration Flow Diagram

A b s o r p t i o n C h i l l e r

G a s - f i r e d B o i l e r

A b s o r p t i o n C h i l l e r

G a s - f i r e d B o i l e r



Case 4: Gas Industrial Cogeneration – Thailand (3)Case 4: Gas Industrial Cogeneration Case 4: Gas Industrial Cogeneration –– ThailandThailand (3)

•Gas engine generator 3 x 2000 kw

•Waste heat boiler 3 x 1.6 tons(steam)/hour

•Absorption chiller 3 x 360 tons(rt)




Waste Heat Boiler


Waste Heat BoilerWaste Heat Boiler



ABSORPTION CHILLER #1



CHILLED WATERSTEAMO

360 RT

360 RT

360 RT

6-8 BAR 7 C


Absorption Chiller Flow Diagram


Absorption Chiller Flow DiagramAbsorption Chiller Flow Diagram



Case 4: Gas Industrial Cogeneration (Thailand) (6)

Absorption Chiller

Case 4: Gas Industrial Cogeneration (Thailand)Case 4: Gas Industrial Cogeneration (Thailand) (6)(6)

Absorption ChillerAbsorption Chiller



Case 5: Micro-turbine in a Rubber Gloves Industry –Malaysia (1)

Case 5: MicroCase 5: Micro--turbine in a Rubber Gloves Industry turbine in a Rubber Gloves Industry ––MalaysiaMalaysia (1)(1)



Case 5: Micro-turbine in a Rubber Gloves Industry –Malaysia (2)

Case 5: MicroCase 5: Micro--turbine in a Rubber Gloves Industry turbine in a Rubber Gloves Industry ––MalaysiaMalaysia (2)(2)

• Implemented in 2002

• Bowman micro-turbine

• Implemented by Novalogics Integrated Sdn. Bhd.

• 80 kW electricity

• Hot water up to 80 °C for leaching process










6. Conclusions



Cogeneration Project Development IssuesCogeneration Project Development Issues

• Commercial Viability: Does it make sense?

• Cogeneration Policy: Incentives?

• Financing: Can be difficult



Financing Power Projects after 1997

Trends and Outlook: Two pictures

• Overcapacity on national level

• Shelved projects queuing for implementation

• ESI Deregulation, Privatisation and merchant power

Very few Large Power Projects under Development

Financing Power Projects in ASEANFinancing Power Projects in ASEANFinancing Power Projects in ASEAN



Financing Power Projects after 1997

Trends and Outlook Continued

• Power Demand is increasing

• Local shortage of Power

• Increasing trend of projects being implemented with local sponsors, lenders and even technology

• Commercial and economic viability, not just project contracts




Financing Trends and Outlook

• Project Finance vs. On-Balance sheet

- Project Finance (non/limited-recourse)

Larger gas and coal projects (> 20 MW)

- Project Finance (full sponsor guarantee)

Larger biomass (> 10 MW)

- On-Balance Sheet

Smaller projects (< 10 MW)




PROJECTSPONSOR

CONSTRUCTIONCONTRACTOR

OPERATION ANDMAINTENANCECONTRACTOR

FINANCIALINSTITUTION

GOVERNMENT SURROUNDINGPUBLIC

PROJECTCONSULTANTS

POWER / STEAMOFFTAKER

EQUIPMENTSUPPLIER

FUEL / RAWMATERIALSUPPLIER

INSURANCECOMPANY

LAW FIRM

PROJECTCOMPANY

Completionguarantee

Construction /performanceguarantee

Operational /performanceguarantee

Financialguarantee

Performanceguarantee

Price / supplyguarantee

Timely permits,licenses

Publicconsent

Technical, financialand environmental

protection

Offtake guarantee,inflation, exchange rate

protection

Insuranceprotection

Security incontracts

Risk managementRisk management



PROJECT DEVELOPMENT

Development of cogeneration project Construction Operation



ConclusionsConclusions

• There is a need for a comprehensive Cogeneration Policy in ASEAN

• Huge potential for Cogeneration but market conditions differ from one country to another

• The driving force for industry to invest in Cogeneration is lower energy cost. This force is independent of overcapacity present in some countries

• Financing largest obstacle for cogeneration investment despite market liquidity



•Thailand 23 – 25 March•Vietnam 6 – 9 April•Singapore 20 April•Indonesia 18 – 21 May•Cambodia 8 – 11 June•Philippines 21 – 24 June•Malaysia 6 – 8 July

Cogeneration Weeks in 2004Cogeneration Weeks in 2004Cogeneration Weeks in 2004



Cogeneration Weeks in 2004Cogeneration Weeks in 2004Cogeneration Weeks in 2004

• Policy day• Training on cogeneration project development and on

Technical -Financial Analysis Model• Site visit / individual consultations• EU/Local suppliers presentation on their

cogeneration equipment and technologies



• COGEN 3 Seminar (Brussels, 25 February 2004)

• COGEN Europe Annual Conference (Brussels, 26 – 27 February 2004)

• Power Gen Europe 2004 (Barcelona, 25 – 27 May 2004)

• Power Gen Asia 2004 (Bangkok, 5 – 7 October 2004)

• Sustainable Energy Asia and Energy Efficiency Asia (Kuala Lumpur, 24 – 25 November 2004)

Other Major Events in 2004Other Major Events in 2004Other Major Events in 2004



Thank You !

For more information, please visit COGEN 3 Website at:

http://www.cogen3.net

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