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Plant owners
Technology Providers
Improve efficiency
Improve fuel flexibility
Improve availability and
reliability.
Fuel management
Founded in 2004
Built Chinas first biomass plant in
technology: DP CleanTech
Partnership with State Grid.
1.
2.
influenced current
government policy
3.
Fuel Management
NBE initiated Chinas first fuel logistics framework.
Prices were very volatile to begin with.
Agents helped stabilize the price.
Farmers began to benefit significantly.
A 30 MW Power Plant require 700 T/Day 220 000 T/Y
CC
Collection 50 KM
CC
120 Agents
AG
Power Plant
CC
AG
CC
8 Collection Centers/PP
CC
400 Farmers/ AG
Quality
control
Fuel
Weight
Fuel
storage
Fuel flexibility
Moisture Content up to 60 %
Different types of Biomass - Mix
straw type and wood chip
Vibrating grates can adjust to
fuel type
Availability
High Pressure ,
High Temperature boiler
92% , 92 Bar , 540 C
Plant efficiency up to 32 %
HTHP vs MTMP
A HTHP boilers is far more expensive to produce than a MTMP boiler
The materials used for the last super heaters have to be alloyed
steels. In Sh3+SH4 DP uses TP347H stainless steel which is both due
to the high temperature and pressure but also for corrosion
protection.
HTHP vs MTMP
HTHP boilers provide us with better efficiencies with lower feedstock costs
The feedstock costs for a HTHP are nearly 20% lower than MTMP
Lower feedstock costs would in return lead to lower price fluctuations and
risk
HTHP is able to generate much higher cash flows which can be used to
service a greater amount of debt
15
HTHP vs MTMP
Cost Assumptions
Investment cost for a 30MW power plant USD
30 mm (HTHP)
HTHP vs MTMP
Performance Assumptions
HTHP
Reference Plant
NBE has now constructed and is operating more than thirty 30MW plants all
For our analysis we have only altered 2 variable, the cost of the plant and
the plant efficiency which then has a resultant effect on the amount of
feedstock consumed per ton of power generated
NBE has now constructed and is operating more than thirtyy 30MW plants all of which are being benchmarked against Generic Model,
therefore we believe this is the right reference point for our Analysis
For our analysis we have only altered 2 variable, the cost of the plant and the plant efficiency which then has a resultant effect on the amount of
feedstock consumed per ton of power generated
Metrics
Assumptions
Metrics
Assumptions
Utilization hours
7,500
Depreciation
Generic
Tariff
Generic:
Income tax
25%
O&M cost
0.2
Working
Capital
Assumptions
Inventory
Debt Funding
Assume
Efficiency factor
Approx.
MTMP
Efficiencies
1st year
2nd year
3rd year
4th year
(Overhaul at the end of 4th year)
5th year
USD
Internal Power
Use
11%
below:
Feedstock heat
price
0.25%
0.50%
0.75%
1.00%
Interest
0.25%
Capital
Expenditure
100%
Assumed
18 months
mUSD
mUSD
mUSD
mUSD
HTHP
2012 2013
0
9.4
0
-5.4
-0.51
-1.7
-0.51
-7.2
2014
19.1
-11.1
-1.9
-13.0
2015
19.7
-11.5
-1.9
-13.3
MTMP
2012 2013 2014 2015
0.00
9.25 18.91 19.47
0.00 -6.58 -13.45 -13.86
-0.51 -1.72 -1.86 -1.90
-0.51 -8.30 -15.31 -15.75
EBITDA
margin
mUSD
mUSD
-0.51
0%
2.20
23%
6.14
32%
6.35
32%
-0.51
0%
0.95
10%
3.59
19%
3.72
19%
Depreciation
mUSD
-0.8
-1.5
-1.5
-1.01
-2
-2
EBIT
margin
mUSD
mUSD
-0.51
0%
1.4
15%
4.6
24%
4.8
25%
-0.51
0
-0.06
-0.01
1.59
0.08
1.72
0.09
Net income
mUSD
-1.08
0.3
2.8
3.0
-1.08
-1.14
0.47
0.65
Cash Flow
Net income
add depreciation
less changes in NWC
Cash flow from operations
add net interest expenses
Capex
Free cash flow
mUSD
mUSD
mUSD
mUSD
mUSD
mUSD
mUSD
-1.08
0
0
-1.08
0
-27
-28.1
0.3
0.8
-0.9
0.1
1.9
0.0
2.0
2.8
1.5
-0.9
3.3
1.9
0.0
5.2
3.0
1.5
-0.1
4.4
1.9
0.0
6.3
-1.08
0.00
0.00
-1.08
0.00
-27.00
-28.08
-1.14
1.01
-1.10
-1.23
1.89
0.00
0.66
0.47
2.00
-1.15
1.33
1.89
0.00
3.22
0.65
2.00
-0.07
2.59
1.89
0.00
4.48
IRR
ROCE
%
%
20%
37%
13%
22%
Feedstock
casts of
HTHP are
about 17.5 %
lower than
that of MTMP
due to higher
plant
efficiency
Project IRR
20 % vrs 13
%.
And ROCE is
37 % vrs 22
%
Assumptions
Metrics
Assumptions
Utilization hours
7,500
Depreciation
12
Tariff
Generic:
Income tax
25%
O&M cost
0.2
Water cost
0.1
Plant SG&A
0.2
Working
Capital
Assumptions
Inventory
Debt Funding
Assume
Efficiency factor
Approx.
MTMP
Efficiencies
below:
1st year
2nd year
3rd year
4th year
(Overhaul at the end of 4th year)
5th year
Feedstock heat
price
USD
Internal Power
Use
11%
0.25%
0.50%
0.75%
1.00%
0.25%
Interest
Capital
Expenditure
100%
Assumed
12 MW HTHP USD 12 mn
12 MW MTMP USD 11 mn
Construction
period
18 months
mUSD
mUSD
mUSD
mUSD
HTHP
2012 2013
0.00
4.24
0.00 -2.24
-0.16 -0.82
-0.16 -3.06
EBITDA
margin
mUSD
mUSD
-0.16
0%
1.18
28%
3.22
36%
3.34
36%
-0.16
0%
0.71
17%
2.23
25%
2.29
25%
Depreciation
mUSD
0.00
-1.01
-2.00
-2.00
0.00
-1.01
-2.00
-2.00
EBIT
margin
mUSD
mUSD
-0.16
0%
0.17
4%
1.22
14%
1.34
14%
-0.16
0%
-0.30
-7%
0.23
3%
0.29
3%
Net income
mUSD
-0.66
-0.80
0.23
0.38
-0.62
-1.19
-0.60
-0.48
Cash Flow
Net income
mUSD
add depreciation
mUSD
less changes in NWC
mUSD
Cash flow from operations mUSD
add net debt repayment mUSD
Capex
mUSD
Free cash flow
mUSD
-0.66
0.00
0.00
-0.66
0.00
-12.00
-12.66
-0.80
1.01
-0.37
-0.17
0.56
0.00
0.39
0.23
2.00
-0.41
1.82
0.56
0.00
2.38
0.38
2.00
-0.05
2.33
0.56
0.00
2.89
-0.62
0.00
0.00
-0.62
0.00
-11.00
-11.62
-1.19
1.01
-0.45
-0.63
0.51
0.00
-0.12
-0.60
2.00
-0.50
0.90
0.51
0.00
1.41
-0.48
2.00
-0.06
1.47
0.51
0.00
1.98
IRR
ROCE
20.8%
39.7%
%
%
2014
8.83
-4.71
-0.90
-5.61
2015
9.27
-4.99
-0.94
-5.93
MTMP
2012 2013
0.00 4.24
0.00 -2.71
-0.16 -0.82
-0.16 -3.53
2014
8.83
-5.70
-0.90
-6.60
2015
9.27
-6.04
-0.94
-6.98
15.0%
28.0%
Margins
are lower
due to
higher
interest
rate
Project IRR
20.8 % vrs
15 %.
And ROCE
is 39.7 % vrs
28 %
Sensitivity
At fuel cost of 20
USD/ton IRR is similar.
HTHP is more stable
with varying fuel cost
Sensitivity
Going from 10 mUSD
to 15 mUSD will lower
IRR from 26 % to 17 %.
Investment cost is
important but not most
important
15mUSD for
HTHP will have
same IRR as 11
mUSD for MTMP.
Financing Ability
Generally banks are cash flow based lenders and will determine sustainable
debt levels based on there free cash flow available to service debt and the
variability of those cash flows
As explained above, feedstock is by far the greatest variable cost for a plant
service debt
Further in a situation where feedstock varies, HTHP cash flows are less sensitive
Market similarities
Current situation in India
India produces about 450-500 million tones of biomass per year.
EAI estimates that the potential in the short term for power from biomass
in India varies from about 18,000 MW, when the scope of biomass is as
traditionally defined, to a high of about 50,000 MW if one were to expand
the scope of definition of biomass.
Govt incentives - capital subsidy, renewable energy certificates and Clean
Development Mechanism (CDM) which can be utilized effectively to make
the project economically attractive
Rice Straw
It is estimated that 150 Mt of rice straw residue are
produced in India every year.
In India, 23% of rice straw residue produced is surplus
and is either left in the field as uncollected or to a large
extent open-field burnt. About 48% of this residue
produced is subjected to open-field burning
However Rice Straw is a difficult fuel to burn and
requires the right technology to avoid high long-term
costs.
Fouling
Conclusion
India is in a very similar position to where China was 5 years
ago
India has huge potential particularly with rice Straw.
Due Diligence Walk before you can run
Reliable technology that deals with specific fuel will always
work out cheaper in the long run
Use HPHT to get the best out of your fuel and improve IRR