The proposed project is to set up bagasse based Grid connected Advanced Cogeneration Power Plant at existing sugar mill
Private or cooperative sugar plants has accepted the importance of cogeneration power plant for exporting surplus power
Gujarat as one of the leading sugar producers has great potential for cogen plant
The plant will generate required steam for the plant and electricity for the plant and for exporting to the grid
Market & Growth Drivers
Global Warming & depleting petroleum resources is forcing to generate from renewable source of energy
Energy deficit in the peak hours is to the tune of 13%
3% Purchase Obligation of State Utility i.e. at least 3% of total power purchased by distribution company must come from Renewable Energy
Government policies and subsidies to promote Renewable Energy
CDM benefits makes the investment even more attractive
Potential of Bagasse based Co-Gen Power Plants in Gujarat
Gujarat has 17 sugar mills in operation with crushing capability of more than 10 million MT per year
Bagasse production is 30% of total crushing of sugarcane which creates a potential of 250-300 MW power generation
So far only two sugar plants of all have gone for execution of cogeneration power plant, rest are waiting for capable partners
Bagasse based power plant policies
Supply of biomass, in principal agreement
Subsidy to the tune of Rs. 14 crores for 21 MW Plant
Open access to the Grid
Flat Tariff of Rs. 3.00 for 20 years
Transmission / Wheeling charge of 5%
Tax exemption for first 10 years
Revenue from Carbon Trading to the tune of Rs. 7.5 crores per annum for 21 years
Interest subsidy to the tune of 3% from IREDA
Mahua Sugar Plant
Capacity: 4000 TCD
Bagasse generated (28%): 1120 Tons / Day
Self consumption of bagasse in the process & for power generation of 6 MW: 1000 Tons/ Day
Days of operation: 190 (from Oct. to March)
Amount of bagasse required to generate 1 kwh = 2.2 kg
Power generation possible from bagasse (during the season): 27.4 MW
Salient Features of the Project
Proposed Power plant Capacity: 21 MW
Total energy generation in a year: 156.37 MU
Net energy available for export: 94.61 MU
Price of Bagasse: Rs. 250 per ton (special rate)
Price of Biomass: Rs. 1200 per ton,
Mill’s additional benefit from selling bagasse to us at special rate is Rs. 2.87 cr. a year
Mills will give us land and water at free of cost and bagasse at special rate
Mill we get its Power and Steam requirement for free
The cogeneration power plant will be handed over to Sugar Mill after 20 years of it operation at free of cost
Project cost: Rs. 88 Crore @ Rs. 4 crore / MW
Long Term Loan (70 % of the project) at 13%: Rs. 58.8 cr.
Subsidy: Rs. 14.2 crores (directly credited to lender)
Equity Required: Rs. 26.56 cr.
Project Completion Time: 18 months
Debt Service Coverage Ratio: Avg. 2.05, Min. 1.72
IRR on equity: 23.7 – 56%
Financials (without CDM benefit) Particulars Year 1 Year 2 Year 3 Year 4 Year 5 Energy available for sale 94.61 MU 94.61 MU 94.61 MU 94.61 MU 94.61 MU Revenue @ Rs. 3 per unit 2838.2 lacs 2838.2 lacs 2838.2 lacs 2838.2 lacs 2838.2 lacs Fuel, O&M, Insurance, Interest, Depr. 2309.7 lacs 2224.7 lacs 2229.5 lacs 2205.7 lacs 2184.9 lacs PAT 528.5 lacs 613.5 lacs 608.7 lacs 632.5 lacs 653.3 lacs
Financials (with CDM benefit) Particulars Year 1 Year 2 Year 3 Year 4 Year 5 Energy available for sale 94.61 MU 94.61 MU 94.61 MU 94.61 MU 94.61 MU Revenue @ Rs. 3 per unit 3595.9 lacs 3595.9 lacs 3595.9 lacs 3595.9 lacs 3595.9 lacs Fuel, O&M, Insurance, Interest, Depr. 2309.7 lacs 2224.7 lacs 2229.5 lacs 2205.7 lacs 2184.9 lacs PAT 1286.2 lacs 1371.2 lacs 1366.4 lacs 1390.2 lacs 1411.0 lacs
Without considering CDM benefit:
Return on Capital Employed: 12.4%
Average Return on Equity: 24.2 % (10 years’ average)
IRR on Equity: 23.7 %
Payback Period: Less than 4 years
Considering CDM benefit:
Return on Capital Employed: 23.3 %
Average Return on Equity: 52.8 % (10 years’ average)
IRR on Equity: 56.0 %
Payback Period: Less than 2 years
Ministry of New & Renewable Energy
Gujarat Energy Development Agency (GEDA)
Gujarat Electricity Regulatory Commission
Sugar Factory – Co-operative society
Lenders: IREDA, PFC, Banks
Thermax, Triveni, BHEL, SS Engineers, etc.
Risk & Risk Mitigation
Funding: Presently liquidity crunch is there
Fuel Supply & Prices fluctuation
CDM Process takes long time
Players in the market
Kalpataru Power Transmission Ltd.
Surya Chamble Power Ltd.
Amrit Envi. Tech Pvt. Ltd.
Birla Corporation Ltd.
Transend Green Power Ltd.
Sambhav Energy Ltd.
J K Laxmi Cement Ltd.
Sathyam Power Ltd.
Star Biomass Power Pvt. Ltd.
As of December, 2004 cumulate to 432.53 MW from 56 projects. Additional capacity of about 322.97 MW from 36 projects in various stages of construction.