Introduction of Biomass Plant

1. THERMAL POWER PLANT

2.  INTRODUCTION TO ENERGY
 BASICS OF THERMAL POWER PLANT
 THERMAL POWER PLANT PROCESS
 BRIEF PROFILE OF SGEL
 PROPOSAL
 VIABILITY AND VALUE PROPOSITION
 RISK MANAGEMENT
Index
2

3. 3
• Potential
• Kinetic
Introduction to Energy
Energy is the ability to do work
Types of energy
What is energy ?
• Heat energy (Thermal)
• Radiant energy (Light)
• Motion energy ( Kinetic)
• Nuclear energy (Potential)
• Chemical Energy
• Electrical,
• Sound energy
• Elastic energy
• Gravitational energy
Forms of energy

4. Introduction to Energy
Sources of energy
Renewable
The Sources which naturally can be replenished at present time is called
renewable. Like Biomass, geothermal energy, hydropower, solar energy, and
wind energy. Day after day, the sun shines, the wind blows, and the rivers
flow.
Non Renewable
The Sources which naturally can not be replenished at present time is called
non renewable sources of energy. Like Coal, Natural Gas, Diesel petrol, Tar,
etc.

5. Three Phases of Material
Basics of Thermal power Plant
• Solid
• Liquid
• Gas

6. Coil Magnet
When a current carrying conductor is formed
into a loop or several loops to form a coil, it
Behalves as a Magnet and magnetic field develops
Electro Magnetic Induction
Whenever a conductor is placed in a
varying magnetic field, EMF is induced
Basics of Thermal power Plant

7. Basics of Thermal power Plant

8. Different Units of energy
Heat Energy :- Calorie
The quantity of heat required to raise the temperature of 1 gram of water
by 1°C at 1 atmosphere pressure.
Electric Energy :- Watt
The rate of consumption of energy in an electric circuit where the
potential difference is one volt and the current one ampere.
With 100% efficiency 860 Calories of heat should give 1 watt of
electricity
Introduction to Energy

9. Heat Energy
Introduction to Energy
FUEL HEAT
AIR
or
O2
Biomass
Coal
Fixed
Carbon +
VM + Ash
GCV,
Unit, Kcal/Kg
Unit, Kcal
Ignition
Temperature
Heat
Flue Gas and
Ash

10. Thermal power Plant Process

11. Thermal power Plant Process

12. Basics of Thermal power Plant

13. Water is the blood of Thermal Power Plant
Basics of Thermal power Plant
Normal water H2O Impurities
Dissolved
Suspended
Boiler water H2O <0.02 PPM Si

14. Efficiency Thermal Power Plant
Basics of Thermal power Plant
Heat Rate Input Output
Heat in Kcal-Hr
Electricity in
Kw-Hr
Efficiency 860Kcal/Kw-Hr Heat rate

15. Snap Shot
Brief Profile SGEL
20 MW Power Plant
Biomass Coal Water
Power Off taker
GRIDCO
Rice Husk
Coconut Shell
Moong Sticks
F-Grade
Dolochar

16. Name :- Shalivahan Green energy Limited
Plant Location :- Nimidha, Dhenkanal Odisha
Plant Capacity :- 20 MW
CoD :- 19-12-2011
Land Area :- 23 Acre
Fuel : Biomass 85%, Coal 15%
Brief Profile SGEL

17. Water :- Existing allocation of 0.65 CuSEC from
river Brahmani
Power Evacuation :- Thru 132 KV Transmission line of 3.5
Kms to Meramunduli substation
PPA :- Existing with GRIDCO Limited
Validity :- to expire on 18.12.2024
Boiler type and OEM :- BFBC, Cethar Vessels limited
Turbine & Generator :- 20 MW Triveni Make
Brief Profile SGEL

18. Brief Profile SGEL
Tariff
S. No.
Financial
Year
Current tariff
being paid by
GRIDCO
Tariff with 5%
escalation on
variable cost
only
Tariff as per latest
OERC order dt.
16.02.2019
01 2016-17 5.78 5.96 6.04
02 2017-18 5.78 6.16 6.43
03 2018-19 5.78 6.38 6.67
04 2019-20 5.78 6.60 6.96
05 2020-21 5.78 6.83 7.21

19. Brief Profile SGEL
• Historical Operational Performance
Particulars UOM 16-17 17-18 18-19 19-20
Generation MU 66.8 55.3 77 77.7
PLF % % 38.1% 31.5% 43.9% 44%
Power Sold MU 57.4 46.9 65.7 66.4

20. Environment
• The Plant has all the required equipment to meet the statutory pollution
control norms. An Electrostatic Precipitator of Thermax make is installed
to treat flue gas coming out of the boiler. The treated flue gas, discharged
through a chimney, has the emission level well below the prescribed norm
of 150 mg/NCum.
• Bag-filters and sprinklers are installed in the Plant to control ambient air
quality. The noise level near the Plant boundary is well below permitted
limit of 90DB.
Brief Profile SGEL

21. Requirement of Fuel and Ash Generation @ 55% PLF
Brief Profile SGEL
Type IMT/Yr Means of procurement and disposal
Coal 25315 E-auction of MCL, Local Coal dealers
Biomass 143453
Proposed to increase existing storage to
90 day
2. Increase catchment area to 100 Kms
Ash 34900
Existing ash dyke in 5.16 Acre, Brick
making and Abounded
Quarry filling

22. S. No. Particulars Amount (Rs. Cr)
A Completed Project Cost (Gross Block) = (I + ii) 97.68
i Term Loan 63.00
ii Equity by Promoter & PE Investor 34.68
B Depreciation (till 31st Mar, 2020) 38.21
C Net Block as on 31st Mar, 2020 = (A-B) 59.47
D Estimate Cost of Acquisition = (iii + iv + v) 55.00
iii. Slump sale Consideration (As agreed by ARCIL) 50.00
iv. Additional Capital Expenditure 3.00
v. Working Capital Infusion 2.00
Financials

23. Inputs for Financial Model

24. Profit & Loss A/c
Profit & Loss A/c Rs. In lacs
Year 1 2 3 4 5 6 7 8 9 10
Financial year end Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26 Mar-27 Mar-28 Mar-29 Mar-30
Months 6 12 12 12 12 12 12 12 12 12
PLF 55.00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00%
Total Energy Generation - in lacs 481.80 963.60 963.60 963.60 963.60 963.60 963.60 963.60 963.60 963.60
Auxiliary Consumption 67.45 134.90 134.90 134.90 134.90 134.90 134.90 134.90 134.90 134.90
Net Energy for Sale 414.35 828.70 828.70 828.70 828.70 828.70 828.70 828.70 828.70 828.70
Net Tariff Rs./kwh 6.96 6.96 6.96 6.96 6.96 6.96 6.96 6.96 6.96 6.96
Revenues
Revenues from Sale of Energy 2,883.86 5,767.72 5,767.72 5,767.72 5,767.72 5,767.72 5,767.72 5,767.72 5,767.72 5,767.72
Other Income - - - - - - - - - -
Total Revenues 2,883.86 5,767.72 5,767.72 5,767.72 5,767.72 5,767.72 5,767.72 5,767.72 5,767.72 5,767.72
Expenditure
Operations & Maintainance Exp 306.80 644.28 676.49 710.32 745.83 783.13 822.28 863.40 906.57 951.89
Fuel Cost 1759.15 3518.30 3518.30 3518.30 3518.30 3518.30 3518.30 3518.30 3518.30 3518.30
Administrative Exp 5.00 10.50 11.03 11.58 12.16 12.76 13.40 14.07 14.77 15.51
Insurance Exp 5.35 10.70 10.70 10.70 10.70 10.70 10.70 10.70 10.70 10.70
Total Exp 2076.30 4183.78 4216.52 4250.90 4286.99 4324.89 4364.69 4406.47 4450.35 4496.41
PBDIT 807.56 1,583.94 1,551.20 1,516.83 1,480.73 1,442.83 1,403.04 1,361.25 1,317.38 1,271.31
Depreciation 150.77 301.53 301.53 301.42 301.20 301.20 301.20 301.20 301.20 301.20
PBIT 656.79 1,282.41 1,249.67 1,215.41 1,179.53 1,141.63 1,101.84 1,060.05 1,016.18 970.11
Interest on term loan 198.00 374.79 318.21 261.64 205.07 148.50 91.93 35.36
Interest on WC 9.16 23.11 23.78 24.49 25.23 26.01 26.83 27.69 28.59 29.53
PBT 449.63 884.51 907.67 929.27 949.23 967.12 983.08 997.01 987.59 940.58
Income tax - 171.44 163.16 187.37 208.39 226.62 242.38 267.89 274.57 270.31
Net Profit After Tax 449.63 713.07 744.51 741.91 740.83 740.50 740.70 729.12 713.02 670.27
Accumulated Profit 449.63 1,162.70 1,907.21 2,649.12 3,389.95 4,130.44 4,871.15 5,600.26 6,313.28 6,983.55

25. Project Profitability
Project Profitability
Project IRR 19.50%
Equity IRR 34.22%
Average DSCR 1.81
Min DSCR 1.56
Payback Years 4.45
Break even Generation (MU) 30.07

26. Viability and Value Proposition
Value Proposition
• The Project has been in operation since last 7 years. Therefore, all the risks
concerning the availability of the plant, operation and maintenance, fuel,
utilities, off-take arrangements, etc. are well identified and any major
negative surprises are not expected.
• The project cash flows, secured by way of long-term power purchase
agreements with a state run utility, has limited off-take and payment risks.
• The GRIDCO, the off taker of power, has been making prompt payment to
the Project and will continue in future too, as being the only operational
biomass project in the State, this Plant is indispensable for meeting the
non-solar Renewable Purchase Obligations (‘non-solar RPO’) of the state.
• The financial of the projects are satisfactory with an average DSCR of 1.79
and Equity IRR of 33.4%. Being an existing operational project, the
proposed loan for the project can be serviced without any moratorium.
• The cash flows of the company can be monitored through an escrow/ trust
and retention account arrangement.

27. Risk Management
Risk Analysis and Mitigation
S. No. Risk Factor Brief Description Mitigation Framework
1.
Fuel
Availability
Fuel availability is one of the major
determinants of the PLF of the
biomass plants.
The plant is located in an area, where biomass is
abundantly available. We propose to increase the
existing radius of the collection area from 50 Km
to 100 Km.
2.
Fuel
Collection
The efficient & timely fuel collection
is important to ensure the optimum
price and availability of the fuel. Any
disruption in this process will lead to
higher operational cost and lower
PLF.
The plant has existing firm contracts with biomass
dealers for ensuring continuous supply of fuel to
the plant. We propose to increase the number of
dealers to achieve more diversification and
increase its bargaining power with the dealers.
With availability of adequate working capital for
operation, We propose to implement the
incentive scheme to further improve the situation.
3. Fuel Quality
The fuel quality determines its
calorific value. Any unintended
variation in the quality will lead to
variation in the level of power
generation.
We conducted the analysis of the fuel during its
due diligence and observed that their calorific
value is consistent enough to be used for the
biomass plant.

28. Risk Management
Risk Analysis and Mitigation
4.
Water
Availability
The continuous water availability
is mandatory for operations of
the plant. Any disruption in the
water supply will lead to
immediate plant shutdown.
The plant has existing water allocation of 0.65
Cusec from perennial river Brahmani for the
entire life of the Plant, which is more than the
required quantity of 0.60 cusec. In case of any
temporary disruption in the water supply,
there is an earthen water reservoir inside the
Plant, which can supply water for continuous
7 days.
5.
Power Off-
take
Arrangement
For power projects to be
economically viable, the long term
firm power purchase agreement
for all the power generated from
the project is essential. If such
arrangement is short term/infirm
or the off taker is not financially
sound, the plant may face
uncertain future.
The Plant has long term PPA with state trading
utility GRIDCO, which is valid up to 18.12.2024
and can be extended at mutually agreed terms
and conditions.
Given non-solar RPO of the GRIDCO and the
plant being only operating Biomass plant of
Odisha, in all likelihood, GRIDCO will extend
the term of the existing PPA.

29. Risk Management
Risk Analysis and Mitigation
Operation and
Maintenance
of the Plant
The biomass plants, similar to
thermal power plants, have
potential to achieve the PLF of
over 80%. The qualified and
experienced operating and
maintenance staff are
required to achieve the same.
The current management has
not been able to operate the
Plant at its optimal PLF
consistently so far.
The past poor operational performance of
the plant is attributed to working capital
constraints of SGEL. During due diligence,
REHPL noted that the current operation and
maintenance team is well qualified and
experienced.
In August 2019, ARCIL undertook some long
pending critical maintenance work.
Thereafter, the existing operation and
maintenance staff has been able to operate
the Plant at 73% PLF in Feb’20.
REHPL has assumed only 55% annual PLF of
the Plant for studying its economic viability
during due diligence. Hence, the probability
of the shortfall of PLF is low.

30. Risk Management
Risk Analysis and Mitigation
7.
Handling of Fly
Ash
Fly ash is a by-product generated during
the operations of the biomass power
plant. There is significant environment
hazard, if the proper handling and end use
of the fly ash is not ensured.
The ash generated from the Plant is conveyed to an ash
pond, admeasuring 5.16 Acre, located inside the Plant.
At 55% PLF, yearly ash generation is estimated to be
34,900 MT. In the first year of operations, REHPL proposes
to sell 13,650 MT of fly ash per year to fly ash brick
manufacturers and agencies involved in filling of
abandoned stone quarries, land filling, road construction
etc. The remaining 21,250 T of ash shall be disposed of in
the existing ash dyke.
RHEPL targets to gradually increase the ash utilization to
100% within first 3 years from the date of takeover.
Hence, all the fly ash generated from the plant will be
handled in the environment friendly manner.
8.
Economic
Viability of the
Plant
Biomass plants face more operational and
maintenance risks in terms of fuel supply,
pollution control, spare consumption etc
The tariff provided by the PPA may not
adequately compensate for these risks and
the economic viability of the Plant may be
endangered.
As per the financial projections Project and Equity IRR
works out to be 24.08% and 33.41% respectively.
The payback period is merely 4 years. Hence, the current
PPA adequately compensates for the incremental risk
inherent with the biomass plants.

31. 31