Business Plan: Biomass Power Plant
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Business Plan: Biomass Power Plant Presentation Transcript

  • 1. Prepared by Sunil Kumar Corrtech Energy Ltd., Ahmedabad (India) [email_address]
  • 2. Contents
    • Project Description
    • Market & Growth Drivers
    • Potential of Bagasse based power generation
    • Bagasse based power plant policies
    • Technology /Processes
    • Suggested project
    • Project cost
    • Funding
    • Returns
  • 3. Continue…
    • Parties Involved
    • Risk & Risk Mitigation
    • Players in the market
  • 4. Project Description
    • 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
  • 5. 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
  • 6. 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
  • 7. 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
  • 8. Technology/ Processes
  • 9. Suggested project
    • 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
  • 10. 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
  • 11. Project Snapshot
    • 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%
  • 12. 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
  • 13. 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
  • 14. Financial Ratios
    • 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
  • 15. Parties Involved
    • Ministry of New & Renewable Energy
    • Gujarat Energy Development Agency (GEDA)
    • Gujarat Electricity Regulatory Commission
    • Sugar Factory – Co-operative society
    • Biomass suppliers
    • Lenders: IREDA, PFC, Banks
    • Equity partners
    • Equipment Suppliers:
    • Thermax, Triveni, BHEL, SS Engineers, etc.
  • 16. Risk & Risk Mitigation
    • Funding: Presently liquidity crunch is there
    • Fuel Supply & Prices fluctuation
    • Location disadvantages:
    • CDM Process takes long time
  • 17. 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.
  • 18. Success Stories
    • 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.
    • Devenagere Sugar Co. Ltd., Karnatka
    • SCM Sugar Ltd., Hyderabad
    • Shree Doodhganga Krishna Sahakari Sakkare Karkhane Niyamit, Karnatka
    • Ref: MITCON, Pune
  • 19. Thanks
    • Sunil Kumar
    • Business Development
    • Corrtech Energy Ltd.
    • Shed No. 7, Survey No. 407, SP-3
    • New Ahmedabad Industrial Estate
    • Sarkhej Bavla Highway, Changodar
    • Ahmedabad – 382213, Gujarat (India)
    • Tel: +91 2717 304100
    • Email: sunilzon@gmail.com