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MTO Biomass Direct Combustion Model.xls

June 24th, 2012 Posted in renewable energy

MTO Biomass Direct Combustion Model.xls

Direct combustion of biomass system (furnace, boiler, steam turbine, generator) is carried out mostly in the countryside where biomass is abundant from agricultural activity such as paddy rice, corn fields, cotton fields, sugar cane fields, tree plantation and municipal solid waste (MSW). A 50-km radius of agricultural land can support around 6-12 MW of biomass power plant as in the case of India.

This MTO first-year tariff model for biomass direct combustion makes use of the basic assumptions of the country’s RE regulator for rated capacity (8.3 MW), capacity factor (75%), plant own use (10%), and transmission line loss (3%).

It assumes an overnight capital cost, fixed and variable O&M, spare parts replacement cost, substation and transmission line cost and distance, access road cost and distance, project development cost, 12% VAT, working capital and contingency. VAT recovery is 70% on the 5th year.

Construction period is 18 months while operating period is 20 years. Cost of capital is 16% p.a. for 30% equity and 10% p.a. for 70% debt.

Exchange rate is 44.00 PhP/US$.

Incentives provided by the RE Law is applied such as the 7 years income tax holiday, after which a 10% income tax is applied. Property tax of 1.5% applied on 80% of book value. Local business tax is 1% while DOE 1-94 contribution is 0.01 PhP/kWh.

It also assumes an average biomass thermal efficiency of 23%, biomass fuel cost is 1.2% of bunker fuel cost (27 PhP/L) and gross heating value of 4,000 Btu/lb.

To order, pay and download this model, follow this link:

http://energydataexpert.com/product_info.php?cPath=19_32&products_id=135

The summary worksheet is shown below:

 

Executive Summary
BIOMASS   PLANT
Investors’   Returns:          NPV-FC 0
  Equity IRR (% p.a.) 16.00%
  Payback Period (years) 5.93
Uses   and Sources of Funds During Construction:          000 US$           $ / kW
Uses   of Funds:
Initial investment in land (10 PhP/sqm) x (10,000 sqm/ha) 35.32 $4
Freight on Board = FOB USA = $/kW 11,322.01 $1,364
Ocean Freight = FRT = 5% x FOB 566.10
Insurance = INS = 1% x FOB 113.22
Cargo, Insurance & Freight = CIF = FOB + FRT + INS 12,001.33
Value Added Tax = VAT = 12% x CIF 1,440.16
Customs Duty = (CIF + VAT) x (% Duty) x (1 + % VAT) 0.00
Duty-Paid Landed Cost = DPLC = CIF + VAT + Duty 13,441.49
Local Freight Cost = LFC = 3% x CIF 360.04
Delivered Cost at Site = DCS = DPLC + LFC 13,801.53
Installation Cost = IC = 5% x FOB 566.10
Transmission line cost 69 kV (2,000,000 PhP/km) = T/L 425.53
Total EPC = DCS + IC + T/L 14,793.16
Contingency (10%) = EPC x 10% 1,479.32
Documentary Stamps (1%) = EPC x 1% = DS 147.93
Total Fixed Assets (EPC + Contingency + DS) 16,420.41 $1,978
Capitalized Expenses:
Development costs (developer, modeler) 82.28
Other Costs including taxes, contingencies 0.00
Carbon Emission Registration & Consultancy 30.00
Initial investment in capitalized expenses 112.28 $14
Working Capital:
         months
  Working capital (adjustment to   meet DSCR = 1.1) 0.00
  Expenses from biomass purchase 105.83 2
  Purchase of chemical materials   (100%) 13.27 2
  Utilities (fuel, lubes,   electricity, water) (150%) 29.87 3
  Maintenance of the installation   (100%) 202.54 3
  Personnel expense (100%) 202.54 3
  Land lease, rent (60%) 40.51 1
  Taxes, Insurance, services, and   others (40%) 27.01 1
  Transport (20%) 13.50 1
  Total Working Capital 635.06 $77
Interest During Construction:
Dev’t fees (developer, loan arranger) 86.02
Front end fees (modeler, loan arranger) 86.02
Commitment fees (bank) 86.02
Interest During Construction (bank) – 18 months 2,580.46
  Total Legal &   Financing Fees and IDC 2,838.51 $342
Total Uses of Fund, ‘000 US$ 20,041.57 $2,415
Sources   of Fund:
  % to be financed by capital 6,012.47 30.00%
  % to be financed by non   refundable subsidy 0.00 0.00%
  % to be financed by debt 14,029.10 70.00%
Total Sources of Fund, ‘000 US$ 20,041.57 100.00%
Weighted Average Cost of Capital (WACC):          Returns
  Equity 16.00% 30.00%
  Subsidy 0.00% 0.00%
  Debt 10.00% 70.00%
  WACC 11.80%
Loan:
  Interest rate of debt, % p.a. 10.00%
  Loan term, years 12
  Grace period (construction   period), months 18.00
Rated Capacity:
  Unit Capacity (MW/unit) 8.300
  No. of Units 1
  Total Gross Installed   Capacity (MW) 8.300
  Plant Own Use (MW) 0.830 10.00%
  Net Capacity (MW) 7.470

 

National   Renewable Energy Board
Licensed to: (Name of   Client)
Generation and Sales:
    Capacity Factor (% of rated) 75.00%
    Days per year 365
    Hours per day 24
    Gross Generation (MWh/year) 54,531
    Power Plant Own Use (%) 10.000%
5,453
    Net Generation (MWh/year) 49,078
    Transmission Line Loss assumed (%) 3.000%
1,472
  Net Sales (MWh/year) 47,606
Transmission Line:
    Line Voltage 69   kV
    Power 8,300   kW
    Length 10.000   km
    Power Factor 0.850   lag
    No. of Circuit 3
    Transmission Line Loss calculated (%) 0.189%
    Cost per km: 2,000,000   PhP
42,553   $
Capital and O&M Cost   Assumptions:
Cost per kW FOB USA ($/kW) 1,364
Variable O&M ($/kWh): 0.00520     Year 1
    Purchase of chemical materials (100%) 79.64   000 US$
    Utilities (fuel, lubes, electricity, water) (150%) 119.46   000 US$
Fixed O&M ($/kW/year) 0.430
    Maintenance of the installation (100%) 810.15   000 US$
    Personnel expense (100%) 810.15   000 US$
    Land lease, rent (60%) 486.09   000 US$
    Taxes, Insurance, services, and others (40%) 324.06   000 US$
    Transport (20%) 162.03   000 US$
    DSRF Expense 3.09   000 US$
Regulatory Costs:
    Special Privilege Tax – 2% 70.90   000 US$
    Special Realty Tax – 2.5% 282.09   000 US$
    DOE 1-94 : 0.01 PhP/kWh sales 10.13   000 US$
Debt Service Reserve Fund:
    Months of debt service 6
    DSRF Income -interest on Foreign Currency Deposit 4.0%
    Withholding Tax on Foreign Currency Deposit 7.5%
    DSRF Expense 0.30%
Taxes and Regulatory Costs:
    VAT recovery at 5th year 70%
    Special Privilege Tax – 2% 1.00%
    Special Realty Tax – 2.5% 1.50%
    DOE 1-94 : 0.01 PhP/kWh sales 0.01
    Corporate income tax rate (% of taxable income) 10%
    Income tax holiday (ITH), years 7
    Profit Sharing, % of IAT 0.00%
    Social Benefit Fund – Host Community, PhP/month 0
Working Capital Needs:    months
    Cash needed for operations (+) 3.00
    Customers / Receivables (+) 1.00
    Stocks / Inventory (+) 2.00
    Suppliers / Payables (-) 1.00
Exchange Rate and   Escalation: 0   No Escalation
    Exchage Rate, PhP / US$ 47.00 0.00%   depreciation
    RP CPI (Local) 5.00%   local escalation
    US CPI (Foreign) 2.50%   foreign escalation
    First Year Tariff (PhP/kWh) 7.0000 0.00%   tariff escalation
    Variable O&M:     weight 0.00%   variable escalation
      % Local (30%) 50.00% 5.00%
      % Foreign (70%) 50.00% 2.50%
    Fixed O&M:     weight 0.00%   fixed escalation
      % Local (70%) 50.00% 5.00%
      % Foreign (30%) 50.00% 2.50%
Fuel & Lubes Properties:       Btu/lb         kg/L           % fuel blend
    Low Sulfur Fuel Oil (LSFO – 1% S) – boiler fuel 18,400 0.9659 0.00%
    Biomass (Solid Waste, Woodwaste) – per kg 4,000 100.00%
    Lube Oil 0.8500 100.00%
Fuel & Lubes Costs &   Escalation:       PhP/L
    Low Sulfur Fuel Oil (LSFO – 1% S) – boiler fuel 27.11 0.00%   diesel escalation
    Biomass (Solid Waste, Woodwaste) – per kg 0.33 0.00%   bunker escalation
    Lube Oil 174.85 0.00%   lube escalation
Plant Heat Rate and Lube Oil   Rate:
    Diesel Engine Heat Rate (Btu/kWh gross) 14,835 23.00%   thermal efficiency
    Lube Oil Consumption Rate (g/kWh) 0.2535   not used

 

 

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