5-MW Biomass Power Project

Scope and Objective:

Feasibility Study

The objective of the study is to review and assess the feasibility and financial viability of producing 5 MW of off the grid electrical power using biomass fuel, utilizing and rehabilitating the existing Boiler Equipment. Project Background: The steam plant located in Manga Road, Pulong Bulo, Angeles City which was originally conceived and operated sometime (need information from owner of the Boiler)- to supply steam needed for the kiln drying of wood. The Boiler was fired with biomass feedstock consisting of rice husk/stalks, wood residues and . .

Reason for stopping its operation. (site PICTURES to be provided) With 1.) a voluminous resource of feedstock in Central Luzon, 2.) the enactment of the Renewable Energy Law and 3.) with a potential power customer, Angeles Electric Inc., the local electric Distributor company having agreed to sign up a Memorandum of Understanding for a 20-25 year Electric Power Sales Agreement (EPSA) with K Power Corporation, the investor for this renewable energy power project deemed it urgent and opportune time to construct and operate a RE power plant to supply electrical power off the grid; thus this study. Peak electrical demand of Angeles Electric consumers is currently about 120 MW and can totally absorb the generation output of the Biomass Power Project which will be treated as an embedded facility of the Distributor company and the generator output will be connected to existing 69 KV sub-transmission line owned by the Angeles Electric. The Plant is envisioned to operate 8,200 hours or 341 days and would generate 41,200,000 KWhr of electricity gross output.

5-MW Biomass Power Project

Biomass Power Production Concept: Technology:

Feasibility Study

Biomass power refers to the production of electricity from the combustion or gasification of various forms of biomass. When waste heat from the power production process is captured for another use (e.g. supplying heat to a manufacturing or drying process), it is called combined heat and power. For this project, the plant would now only produce electrical power because at present there is no more heat customer at the current time nor expected to be in the future. Direct Combustion: Since the existing Boiler unit will be utilized for electrical energy production, the only option or approach is direct combustion standard boiler/steam turbine/condenser technology. Direct combustion is burning biomass fuel to produce heat. Typically, combustion occurs in a chamber where volatile hydrocarbons are formed and burned. From that process, heat energy is released from the combustion chamber (in the form of hot gases) to a heat exchanger that converts the hot gases to steam, which in turn is run through a turbine generator to produce electricity. The energy efficiency of this process is determined by measuring the amount of heat captured in the steam relative to the amount of heat stored in the fuel, which is known as the heating value. When direct combustion systems are used to convert heat energy into power, overall system efficiency is about 25 percent.

5-MW Biomass Power Project

Feasibility Study

In direct combustion a key technological design feature is the manner in which wood is combusted. Of the two basic options; fixed bed or fluidized bed technology, the existing Boiler as with majority of biomass boilers use a fixed bed design in which material is burned on a grate containing holes. The holes allow for primary combustion air to be introduced below the grate. A metered amount of fuel is spread across the grate by an air swept stoker.The fuel can be placed on the grate and ash is removed via a travelling, vibrating, reciprocating, or rotating grate to provide a space for fresh fuel. Key advantages of a grate system are that they are proven, rugged, efficient, reliable, and have a relatively low capital cost and operating costs. In addition, they are available from a variety of vendors. A key disadvantage is that they typically operate at higher temperatures, leading to higher uncontrolled emissions of some pollutants (CO and NOx), thus the need for emission control devices. The main reason for this is the daunting logistics required for a direct combustion system producing steam and with that steam directed to a steam turbine-generator (STG). Such a unit, with no customer for process steam, will be required to discharge all of its output into a water-cooled condenser. The existing boiler, which do not have a nameplate to identify its steam generation capacity, would need to be able to produce 45,000 to 55,000 pounds of steam per hour (depending on steam conditions). The additional equipment needed, including an economizer, air heater, multiclone and electrostatic precipitator/stack would have to be installed. The EPC Contractor would be required to supply all equipment and construction required for a complete and functioning power plant including an assessment of the existing Boiler and the optimization use of its structures and auxiliary equipment. Plant Equipment: Existing Boiler EquipmentAfter a thorough assessment of the existing Boiler Equipment was recently conducted on April 11, 13 and 14th, 2013 (see Appendix 1- Boiler Assessment), it will require rehabilitation/ refurbishment, repair and modernization to guarantee its operating condition, restore and increase
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5-MW Biomass Power Project

its efficiency, and to have a sound and reliable operation using the latest technology. Local contractors will provide the rehabilitation and modernization of the boiler, selection by means of competitive bidding. Included in the Scope of work to be performed are the following:

Feasibility Study

a. b. c. d. e. f. g. h. i. j. k. l.

NDT test on the Boiler Drum and tubes. Repair/ replacement of eroded and damaged tubes. Repair of existing Refractory and lining. Rehabilitation of piping system- main header, blow off and feed water lines. Repair (including static and dynamic balancing) of all fans. Replacement and upgrade of burner system. Replacement and upgrade of protection system. Replacement and re-wire of power and control cables. Repair/ replacement of electrical motors (Motors are of China Origin) Repair of smoke stack and structure. Repair of Water treatment facility Re-conditioning/ upgrade of pumps.

Currently, local suppliers are being requested to submit a budgetary pricing and scope of work in order to make a establish the Terms and Reference and Budget for the Rehabilitation and modernization of the boiler.
The Boiler system does not have any as-built plans or drawings, schematic diagrams, and electrical diagrams. No information is also provided nor seen from the boiler nameplate with regards to its size and capacity. Additional Equipment to be Procured Particulars a. Turbine-generator, auxiliaries and controls system b. Water-cooled Condenser c. Rice husk and feedstock handling system with storage and processing arrangements d. Ash handling system e. Exhaust and emission control devices (Electrostatic Precipitator) f. Plant water system including deep well pumps Cost (USD)

(awaiting input on feedstock analysis)

5-MW Biomass Power Project

g. h. i. j. k. l.

Cooling water system and Cooling Tower Water Treatment /DM plant Compressed/instrument air system Plant instrumentation and control systems Fire protection system Complete electrical system for power plant and interconnection including transformers/substation

Feasibility Study

Civil Works m. Powerhouse /Turbine Building including Air conditioning and ventilation n. Waste Water Treatment Plant Others o. Black Start/Emergency Diesel Generator

Fuel Supply: The sizing of a biomass power plant is dictated by several factors, including 1. Water supply, 2. Ability to interconnect and transmit power to the grid, and 3. The available fuel supply. While all of these factors are important, perhaps the most fundamental factor to consider in sizing a plant is the volume of fuel available at a given location and the delivered cost of fuel from the given location. For this study, plant size was based on the steam generation capacity of the existing Boiler and on volume of fuel estimated to be available from rice husk, rice stalks, etc. which are available from the towns and vicinity of Pampanga and Nueva Ecija.

Attached is a report on the volume of biomass fuel estimated to be available in the vicinity of Power Project. (currently being undertaken by Dang Zamora)

5-MW Biomass Power Project

TABLE _ - ESTIMATED SUPPLY AND DELIVERED COST OF BIOMASS DELIVERED Fuel/Feedstock Type Source output,______ ton/yr Available unused residue,____ ton/yr Higher heating value, kJ/ 14,100 10,800 10,000 10,000 Rice Husk Palm Residues Wood Residues Bagasse

Feasibility Study

Cost/ton (bone-dry)

In order to sustain the Feedstock requirement of the power plant, investor had signed Industrial Forestry Management Agreement (IFMA) with ______for a 5,000 hectare land. Other Considerations: SITE The existing 7 hectares site location of the Boiler equipment is available for the construction of the 5MW Biomass Power Project. A cost of USD 2,500,000.00 has been allocated for its acquisition and was included in the financial analysis.

WATER A MW power plant modeled in this study consume between 90 and 120 gallons of water per minute. It was assumed that water in those quantities would be available at the site

INTERCONNECTION/TRANSMISSION With a signed Memorandum of Understanding between Investor K Power and the local electric distributor company for the electric supply of 20 years, the Power Plant Project which is treated as an embedded generation facility of Angeles Electric, the ability to interconnect the generation output of the biomass power plant will be thru the 69KV SUBTRANSMISSION LINE operated by Angeles Electric.
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5-MW Biomass Power Project

Feasibility Study

The cost for interconnection would be negotiated with the Distributor including the installation of metering device considering that they own the existing 69KV sub-transmission line. A single-line diagram shown in Appendix __ details the interconnection plan with the Distributor line assets and the Transmission Line route. (This

will be provided in the Detailed Engineering)

SOCIAL /PROJECT ACCEPTANCE The previous Boiler Plant using Feedstock as fuel has been in operation for more than 8 years and had been socially accepted by the residents and the Local Government Unit. DENR has also issued Environmental Clearance Certificate for its operation. Recently, the investor had initiated a project acceptance survey within the plant vicinity and received a positive response from the residents therein. After an exploratory talk with DENR, officials welcome and will fully support the RE power project.

INCENTIVES For renewable energy investors and developers, fiscal and non-fiscal incentives including tax credits on domestic capital equipment and services, special tax rates on equipment and machinery, tax exemption of carbon credits, duty-free importation mechanisms and income tax holidays. Value-added tax (VAT) levied on the power generated from renewable energy sources will be scrapped, and a host of measures relating to the taxation of the industry's equipment will be introduced, including: The introduction of a 1.5% tax cap on original equipment and machinery costs; A tax credit scheme for the purchase of new machinery or equipment; and A 10-year ban on the duties levied on imports of equipment required by the country's renewable energy developers.
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5-MW Biomass Power Project

Carbon credits generated under the regime will also be given tax immunity.

Feasibility Study

Financial Analysis: to be performed..including sensitivity analysis to show project IRR (To be provided in the Feasibility Study) Budgetary Capital Cost --5mw Plant Cost Item Cost ($ in 000s) Construction Costs Project Management/Permitting/Engineering Site Preparation/Roads/Fencing Working Capital Utility Interconnection Fuel Receiving and Processing 5% Contingency Interest During Construction Interest Earnings Issuance Costs Total Capital Costs: Net Capital CostsNote: 1. The construction costs and fuel receiving and processing line items include all equipment and construction required for a complete and functioning power production system. All of the equipment would be new. Assumptions: The average delivered fuel cost was assumed to be _____ per bone dry ton escalating at 3 percent annually. Project owner would have 30 percent equity in the project (_______ million), and 70 percent (_____________) would be financed at 6 percent interest on a 20 year note. The plant would require a staff of 10. The total labor cost (including benefits) would be PhP_________ per year. The plant would operate 8,200 hours per year (341 days) and generate 41,200 MWh of electric power. Depreciation is assumed to be Feedstock cost Electricity Power Sales Agreement at PhP (Feed-in Tariff) rate
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5-MW Biomass Power Project

CONCLUSIONS

Feasibility Study