BIO MASS Utilization Pakistan
Introduction
The last government (PMLN) managed to deal with the energy
crisis but failed to address the heavy dependence upon imported fuels. The way
out of this shortcoming is to produce power at a low cost from cheaper indigenous
sources which are abundantly available but have been largely ignored. These
sources can be classified as biomass.
Pakistan is exploring alternative indigenous resources for power generation
that are cheaper and have enormous potential. The progress so far has not been entirely
encouraging although bagasse has
contributed to the energy mix.
Being an agrarian country Pakistan has numerous sources of
biomass available from agricultural crops and solid waste generated in huge
quantities which are suitable for power generation. The main sources of biomass
are agricultural residues, animal waste, municipal solid waste and industrial
waste. Agricultural residues are
those crop leftovers which have a fuel value but their potential is not being
fully utilized. The main agricultural residues available locally are wheat
straw, rice husk and straw, cane trash and cotton sticks and plant residue.
However, at present, wheat straw is the main source of cattle
fodder, so it cannot be considered as a source of fuel to generate power.
Similarly, rice husk and straw is presently being used as a source of fuel in
the brick kilns and as cattle feed, and therefore, not considered.
On the other hand, the waste of sugarcane crop which is left in
the field and subsequently burnt by the farmers; cane trash is a biomass source
which is available in substantial quantities and can be classified as a potent
source to produce power. Similarly, cotton sticks and plant residue are also
leftovers in field. Part of the leftovers is used for cooking purposes, while
some quantity is lifted by the brick kiln users. Around 30 per cent is in
excess and can be used as a biomass source.
As per data collected, sugarcane tops and trash constitutes
around 30 per cent of the plant out of which tops make up 20 per cent. Cane
tops are used as cattle fodder and are taken away by the cane harvesting labor
to feed dairy animals. The other waste, cane trash constitutes 10 per cent of
the sugarcane crop. Leaving aside wastages nine per cent cane trash is
considered as available biomass for power.
Research has determined the net calorific value of cane trash at
6.7 Gj/Ton. Taking this figure as
the benchmark the power generating potential of sugarcane trash available
is:
|
Cane Power Potential
|
|||
|
|
|||
|
Thermal
|
Power
|
||
|
Cane
|
Energy
|
Potential
|
|
|
Trash
|
at 6.7 GJ/Ton
|
at 2.19 Tons/MWH
|
|
|
Year
|
Tonnes
|
GJ
|
GWh
|
|
2008
|
5752800
|
38543760
|
2626.85
|
|
2009
|
4504050
|
30177135
|
2056.64
|
|
2010
|
4443561
|
29771858.7
|
2029.02
|
|
2011
|
4877765
|
32681025.5
|
2227.29
|
The ratio of plant waste to cotton is 3:1. From the waste a
portion is used by farmers as cooking fuel, some is lifted by the brick kiln
operators while a substantial quantity is available for use as fuel for power.
The net calorific value of cotton sticks has been determined as 7.3
Gj/Ton.
|
Cotton Sticks Power Potential
|
||||
|
Cotton
|
Cotton
|
Power
|
||
|
Sticks
|
Sticks
|
Potential
|
Power
|
|
|
Production
|
Available
|
at 7.33GJ/Ton
|
Potential
|
|
|
Year
|
Tonnes
|
Tonnes
|
GJ
|
GWh
|
|
2008
|
5947248
|
1486812
|
14868127.33
|
620
|
|
2009
|
6030882
|
1507720.5
|
1507720.57.33
|
628
|
|
2010
|
6589320
|
1647330
|
16473307.33
|
686
|
|
2011
|
5898711
|
1474677.75
|
1474677.757.33
|
614
|
Another significant area for energy prospects is the manure from
dairy animals and cattle. The technology for extracting energy from cattle and
dairy animals is through generating biogas from manure. This technology is
well-entrenched in our culture and its use will not pose any barriers. The
additional advantage for power from manure is the organic compost and slurry
which can be subsequently used in the fields as a rich source of fertilizer.
This will result in additional revenues at significant levels improving the
profitability of the dairy farmers and the power operators.
The quantity of biogas in any feedstock is dependent on the
organic content of the feedstock, the average organic content of cattle and
buffalo
|
Biomass Power Potential
|
||||
|
|
Biogas at
|
Thermal Energy
|
Power
|
|
|
Manure
|
30m3/Ton
|
in Biogas
|
Potentail
|
|
|
Production
|
manure
|
at 22GJ/m3
|
2.14kWh/m3
|
|
|
Year
|
Tonnes
|
M3
|
GJ
|
GWh
|
|
2007
|
322039500
|
9661185000
|
212546070000.00
|
20675
|
|
2008
|
333044250
|
9991327500
|
219809205000.00
|
21381
|
|
2009
|
344443200
|
10333296000
|
227332512000.00
|
22113
|
|
2010
|
348746550
|
10462396500
|
230172723000.00
|
22390
|
|
2011
|
368434650
|
11053039500
|
243166869000.00
|
23654
|
Municipal solid waste (MWS) is another feedstock which is
available in substantial quantities in major cities.
|
Municipal Solid Waste Power
Potential
|
|||
|
MSW
|
|||
|
City
|
Tons/yr
|
GJ/yr
|
GWh/yr
|
|
Karachi
|
2920000
|
20118800
|
9145
|
|
Hyderabad
|
356131
|
2453743
|
1378
|
|
Faialabad
|
337370
|
2324479
|
1305
|
|
Lahore
|
2190000
|
15089100
|
8473
|
|
Multan
|
365000
|
2514850
|
1412
|
|
Peshawar
|
295395
|
2035272
|
1143
|
|
Gujranwala
|
300760
|
2012236
|
1164
|
|
Quetta
|
137970
|
950613
|
534
|
|
Rawalpindi
|
219000
|
150890
|
847
|
|
Total
|
7121626
|
47649983
|
25401
|
Having determined the power potential in the agricultural and
urban waste, following is a summary of the total value which can be realized
|
:Total Biomass Power Potential
|
|||
|
Power
|
Biomass
|
Biomass
|
|
|
Generated
|
Power
|
Power
|
|
|
Pakistan
|
Potential
|
Potential
|
|
|
Year
|
GWh
|
GWH
|
MW
|
|
2008
|
72770
|
49322.85
|
11260.92
|
|
2009
|
69659
|
49466.64
|
11293.75
|
|
2010
|
73561
|
50229.02
|
11467.81
|
|
2011
|
73805
|
50632.29
|
11559.88
|
The advantages of adopting the biomass route will be
multi-dimensional. For instance, sustained power supply will be available at
affordable rates. It will also be an additional source of income for the
growers of sugarcane, cotton crop and dairy farmers, creating additional
profits for the stakeholders. Similarly, it will be a source of business
opportunities for traders buying biomass raw material from the farmers
processing it and selling to power operators.
Generating biomass will increase sources of employment in the rural
areas and prevent migration to urban centers. Power from biomass can be
generated through technology platforms and equipment which is mainly indigenous
and the technical manpower to operate it is also abundantly available.
The MSW-based power plants have to be installed in the cities
(where the garbage is generated), thus removing the problems associated with
garbage collection and disposal and making available a source of income for the
funds-starved civic agencies of the cities. About 3,000 MW combined gross
electricity can be generated using agricultural residue and municipal solid
waste. Although setting up centralised
biomass-based power plants will be difficult, this can be overcome by
installing a chain of smaller power plants ranging from 15MW to 50MW in areas
where the biomass is available in economical quantities. This will also save in
the transportation costs and will result in reduced line losses.
In the absence of a centralized approach the second option would
be to go for micro power plants of 15 kW to 1000 kW range based on gasifier and
biogas plants using the agricultural biomass and animal manure as the
feedstock. This route will also be viable and could be adopted on the basis of
individual participation of the small and medium land holding farmers.
The World Bank has published a ‘Biomass Atlas’ of Pakistan which
presents the potential for setting up power plants at biomass producing sites
such as sugar and rice mills, municipal solid waste landfills and dairy farms.
The atlas also identifies scope for green field power plants fed by the residue
feedstock of crops.
Bagasse offers the highest potential as fuel for cogeneration
plants at the existing sugar. The new high-pressure cogeneration plants at the
country’s 84 sugar mills could have a combined power capacity output of 1,844MW
based on bagasse of about 17.1m tonnes a year produced by these mills. These
potential cogeneration plants could produce a trade surplus of about 4,944GWh
per year, if only bagasse is used, or 10,759GWh/year if an additional biomass
feedstock of around 12.9m tonnes per year is used as fuel for the cogeneration
plants.
Municipal solid waste (MSW) can also be used for large-scale
grid-connected power plants. With Estimated total MSW amount of around 27,000 tonnes/day
at 12 surveyed landfills. Around 360MW
of gross power capacity can be generated based on the anaerobic digester-based
power generating technology. These potential MSW-based power plants could sell
about 2,687GWh/year to the grid.
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However, rice husk and cattle manure, with a limited energy
potential can be used to set up captive power plants for running rice mills and
livestock farms. The report does not include all the existing MSW landfills,
rice mills and livestock farms in the country due to the lack of data. The
potential for Greenfield power plants using crop harvesting residues was
assessed based on their site suitability indicators, the feedstock sourcing
area size, the road network density in the region and the distance to the grid.
The site suitability maps were produced for 21 different
combinations of energy conversion technologies and power plant capacities.
The theoretical generation potential of crop residues was
estimated at 25.3m tonnes per year with an equivalent energy potential of
222,620 tonnes per year. Bagasse accounts for 66pc of this energy potential,
followed by rice husk with 20.3pc, maize cobs with 8.8pc and maize husk with
4.9pc.
The theoretical potential of crop harvesting residues was
estimated at around 114m tonnes per year with an equivalent energy potential of
448,990GWh per year. 45.8pc of the total energy potential comes from cotton
stalk, 30.8pc from wheat straw, 13.0pc from rice straw, 6.1pc from sugarcane
trash, and 4.3pc from maize stalks.
Based on the existing uses of the residues by the farmers, the
technical potential of crop harvesting residues was estimated at about 25.1m
tonnes per year with an equivalent energy potential of 95,065GWh (342,236
TJ/year).
Rice straw accounts for 30.4pc of this energy potential,
followed by wheat straw with 27.3pc, cotton stalk with 26.4pc, sugarcane trash
with 12.9pc and maize stalks with 3.0pc. It can be seen from these percentages
that large amounts of cotton stalk and wheat straw are being used by farmers in
the form of cooking fuel, animal fodder and fertilisers, or sold to industries.
In case the farmers’ willingness to sell their biomass residues
is taken into account, the technical potential becomes 280,177 TJ/year. Rice
straw and wheat straw then account for a majority of this energy potential with
29.2pc each, followed by cotton stalk with 27pc, sugarcane trash with 11.5pc
and maize stalk with 3.2pc.
There is a potential use of MSW for energy generation at the
landfills. The industrial survey covered 16 landfills in major cities. However,
only 12 landfills provided adequate data for the analysis. The combined amount
of municipal solid waste (MSW) collected at these landfills is around 29,000
tonnes per day. However, MSW is being sold out for fertiliser production, and
the remaining amount of around 27,000 tonnes a day is currently dumped at the
12 landfills. This amount of MSW could generate around 360MW of gross power
capacity in the anaerobic digester-based power plants.
The industrial survey covered large-scale livestock farms with a
minimum of 1,000 cattle heads. This led to the survey of five dairy farms. Only
three of them provided the required information on their GPS coordinates and
the production of livestock manure. The combined manure production of these
farms is 100 tonnes/day which could support 0.36MW of gross power capacity for
anaerobic digester-based power plants.
Progress so far
Bagasse
A number of sugar mills have start power generation by utilizing
bagasse (cane pulp). These sugar
mills have entered into arrangements with NEPRA or power distribution
companies. This will help meet peak power demand during winter. Presently,
the country’s 80 sugar mills have a total installed cane crushing capacity of
75m tonnes per season, of which around 80pc is being utilized, industry sources
say.
During the crushing season (2013-14), sugar mills consumed
around 60m tonnes of sugarcane to produce over 5.58m tonnes of white refined
sugar. However, during the upcoming crushing season, the industry expects to
produce around 6m tonnes of sugar.
National Electric Power
Regulatory Authority (Nepra) in 2014 awarded licenses to 24 sugar mills to
generate power from bagasse and supply it to the national grid. The authority
also approved an upfront tariff of Rs10.50 per unit. The sugar industry estimates
that the country can get around 3,000MW once all 80 sugar mills start using
bagasse for power generation.
Since most sugar mills have already shifted their power
generation from costly furnace oil to bagasse over the last 6-7 years, industry
sources believe it would not need much fresh investment and time to make
surplus electricity available to the national grid.
Ever since the industry helped growers introduce better seeds
and techniques, they say economies of scale have also changed. Pakistan is the 5th largest country in the
world in terms of area under sugarcane cultivation, and 11th by production. The
sugar industry is the second-largest agro-based industry
Pakistan
has added a number of plants based on bagasse. Bagasse is the crushed residue of
sugarcane. It is an excellent raw material for power generation. Pakistan sugar
industry is one of the biggest in the world and comprises 81 sugar mills with an
annual capacity of about six million tons sugar. The industry crushes about 30
to 40 million tons of sugarcane that yields about 12 million tons of bagasse as
an industrial waste that has a potential of generating 3000 MW electricity.
According to a recent report by National Electric Power Regulatory Authority (NEPRA), about 16 sugar mills are
supplying nearly 120 MW surplus powers to electric distribution companies for
national grid while many others are producing just enough power for their use
only. 2018 installed capacity based upon bagasse is presented as follows:
|
Station
|
Community
|
Status
|
||
|
26.35
|
Operational.
|
|||
|
26.35
|
Operational.
|
|||
|
26.35
|
Operational.
|
|||
|
30
|
Operational.
|
|||
|
62.4
|
Operational.
|
|||
|
34.1
|
Operational.
|
|||
|
32
|
Operational.
|
|||
|
26.5
|
Operational.
|
|||
|
22.9
|
Operational.
|
|||
|
20.1
|
Operational.
|
|||
|
20.1
|
Operational.
|
|||
|
20.1
|
Operational.
|
|||
|
20.1
|
Operational.
|
|||
|
20.1
|
Operational.
|
|||
|
20.1
|
Operational.
|
|||
|
20.1
|
Operational.
|
|||
|
18.5
|
Operational.
|
|||
|
16.8
|
Operational.
|
|||
|
13.4
|
Operational.
|
|||
|
13.4
|
Operational.
|
|||
|
13.4
|
Operational.
|
|||
|
13.4
|
Operational.
|
|||
|
13.4
|
Operational.
|
|||
|
13.4
|
Operational.
|
|||
|
10.1
|
Operational.
|
|||
|
10.1
|
Operational.
|
|||
|
6.7
|
Operational.
|
|||
|
41
|
Operational.
|
|||
|
36
|
Under
construction. To be operational by Dec 2017.
|
|||
|
15
|
Under
construction. To be operational by Dec 2017.
|
|||
|
19
|
Under
construction. To be operational by Dec 2017.
|
|||
|
20
|
Under
construction. To be operational by Dec 2017.
|
|||
|
67
|
Under
construction. To be operational by Dec 2017.
|
|||
|
30
|
Under
construction. To be operational by 2018.[
|
|||
|
26.5
|
Under
construction. To be operational by 2018.
|
|||
|
32
|
Under
construction. To be operational by 2018.
|
|||
|
36
|
Under
construction. To be operational by 2018.
|
|||
|
30
|
Under
construction. To be operational by 2018.
|
|||
|
30
|
Under
construction. To be operational by 2018.
|
|||
|
22
|
Under
construction. To be operational by 2018.
|
|||
|
31
|
Under
construction. To be operational by 2018
|
|||
|
26
|
Under
construction. To be operational by 2018.[
|
|||
|
26
|
Under
construction. To be operational by 2018.
|
.
Tariff considerations and development– Bagasse
Pakistan produces more than 12 million tons of bagasse (crushed
residue of sugarcane), as an industrial waste, which has potential of
generating 3,000-MW electricity. Almost all 80 sugar mills have in- house
bagasse-based cogeneration power plants, mostly to meet their own requirements.
Only a few mills have surplus electricity to sell to the utility company.
In November 2005, the ECC of the Cabinet approved plans for
increasing existing capacity of these co-gen power plants to 700 MW, in the
first phase, so that more surplus power could be ‘exported’. The response of
sugar industry however was lukewarm.
In January 2006, the National Policy for Power Co-Generation by
Sugar Industry (Co-Gen Policy) was notified, offering attractive incentives to
sugar mills as were available to the IPPs under Power Policy. Only Fatima Sugar
Mills showed interest in constructing a dual-fuel power project of 125-MW using
natural gas as secondary fuel. The LOI was issued in June 2007, but project did
not see light of the day.
The Co-Gen Policy was revised in January 2008, in consultation
with the Pakistan Sugar Mills Association (PSMA) that committed to set up a
series of 60-MW or above projects to generate 1,000 MW on commercial basis by
2010, doubling the combined capacity by 2012.
Subsequently, NEPRA announced in June 2008 an indicative tariff
of US cents 8.286 per kWh levelised for a period of 30-years of project life,
but it was not accepted by mills. Later, NEPRA agreed to offer upfront tariff
of cents 9.28. Again, PSMA demanded even a higher tariff—-a minimum of cents
11.1.
In India, the maximum tariff for similar co-gen power is cents
7.5 per unit. There is no rationale to allow PSMA any further increase, as currently,
energy is being delivered by mills to PEPCO/DISCOs at about cents7.5. Having analyzed
tariff petition, the NEPRA could not agree to a higher tariff. As a result of
deadlock on tariff issue, no progress could be achieved on proposed projects (except
one).
These are Fatima Sugar Mills (100MW), Ramzan Sugar Mills
(100MW), JDW Power/JDW Sugar Mills (80MW), Chishtia Sugar Mills (65MW), Janpur
Energy/RYK Sugar Mills (60MW) and Dewan Energy/Dewan Sugar Mills (120MW).
At that point in time seven sugar mills sold their surplus power
to government. Layyah Sugar Mills, with an installed capacity of 9.2MW, exports
4MW. Hamza Sugar Mills operates 23.6MW plant, whereas Shakarganj
Energy/Shakarganj Sugar Mills operates a 20MW co-gen power plant. Al-Noor Sugar
Mills generates 21.8MW, and now plans to increase capacity to 36.8MW. RYK Sugar
Mills (Rahim Yar Khan) generates 18MW and sells 10MW. Likewise, Al-Moiz Sugar
Mills generates 27MW and exports 15MW. JDW Sugar Mills generates 22MW, with a
surplus of 10MW electricity.
JDW Group owns three mills, namely JDW Sugar Mills, JDW-II Sugar
Mills (United Sugar Mills) and JDW-III Sugar Mills (Ghotki Sugar Mills). JDW
Power is the only project that has taken-off among the six identified projects.
Compared to upfront tariff of cents 9.28, NEPRA has determined cents 9.9 tariff
for JDW Power.
The company is constructing three co-gen power plants, in
phases, of a cumulative capacity of 80MW. The project will be completed by 2014
at a cost of $123.5 million. These power plants, which will be based on
state-of-the-art high-pressure high-temperature boiler technology, will be
dual-fired plants using coal as the other fuel.
The upfront tariff is based on a feasibility study submitted by
PSMA for a notional 60-MW capacity co-gen project using bagasse and coal as
fuels, involving capital investment of $96.67 million. Given the project
parameters, even the feasibility is questionable. First, it is no more a co-gen
power plant, and energy-from-waste, as bagasse mixed with coal will be used during
crushing season and coal during off-season. Ironically, only 25 per cent
bagasse will be used and 75 per cent coal as fuel.
Second, imported coal will be used, depleting foreign exchange
earnings, and the project will no more be environmental-friendly. Third,
infrastructure for coal transportation from Karachi to rural areas of mills’
locations will be required.
Fourth, only a small part of existing infrastructure of co-gen
facilities will be utilised as green-field projects are proposed.
Last, and most important, this electricity will not be
inexpensive. Globally, capital cost and tariff of waste-based and/or co-gen
power is much lower than conventional power plant, but in this case, both are
extremely high. Bagasse, which is of zero price, is to be charged almost at par
with coal price. Again, bagasse availability is worked out only for 100 days
while crushing season in Pakistan is of 120-165 days.
In final analysis, the PSMA proposed projects are neither
economically viable nor technically feasible.
The government will be well-advised not to promote these
projects, and instead, adopt policy measures to encourage construction of small
25-30 MW co-gen plants using bagasse as primary fuel.
According
to the regulator, the fuel cost component of the bagasse-based captive power
projects as well as the new co-generation projects under Upfront Tariff, 2013
have been worked out and are being indexed based on prices of foreign coal
(South African) on annual basis.
The Authority has determined new upfront tariff on 10 November, 2017 for bagasse new co-generation projects. In the determination, the Authority has worked out the fuel cost component using market prices of bagasse and allowed indexation thereon at the rate of 2% upward after every two years.
However, now the Authority has decided to initiate suo-moto proceedings to modify the working and indexation mechanism of fuel cost component of bagasse-based captive power projects and new co-generation power projects awarded upfront tariff, 2013 to provide fair and transparent tariff. A hearing was scheduled for this purpose on March 15, 2018 at NEPRA Tower, Islamabad.
The Authority has determined new upfront tariff on 10 November, 2017 for bagasse new co-generation projects. In the determination, the Authority has worked out the fuel cost component using market prices of bagasse and allowed indexation thereon at the rate of 2% upward after every two years.
However, now the Authority has decided to initiate suo-moto proceedings to modify the working and indexation mechanism of fuel cost component of bagasse-based captive power projects and new co-generation power projects awarded upfront tariff, 2013 to provide fair and transparent tariff. A hearing was scheduled for this purpose on March 15, 2018 at NEPRA Tower, Islamabad.
The Ministry of Energy (Power Division) is
trying to block a move of the power sector regulator to allow the influential
sugar millers a higher tariff on bagasse-based power generation that will earn those
billions of rupees over the years. The Power Division has filed a review
petition to challenge the lucrative tariff which was heard by the National
Electric Power Regulatory Authority (NEPRA) on Thursday. NEPRA has set old
tariff for 12 bagasse-based power plants of sugar millers despite issuing a new
tariff. The old price will provide the millers with Rs48 billion in revenues
from the electricity consumers over 10 years. The old tariff stands at Rs12.09
per unit whereas the new price has been set at Rs8.86 per unit.
Sugar barons, many of whom are associated
with the ruling and opposition political parties, have already got over Rs10
billion on account of freight subsidy on the commodity’s exports during the
four-and-a-half-year tenure of the present government.
Nepra set the old tariff though the
millers had agreed with the then Ministry of Water and Power on the new tariff
of Rs8.86 per unit. After that, the ministry issued them a power acquisition
request.
Earlier, the Central Power Purchasing
Agency-Guarantee (CPPA-G) refused to give its consent to power production by 12
bagasse-based plants because of surplus generation capacity in the country
following the start of new power plants. The issue was raised by the Sindh
chief minister in a meeting of the National Economic Council. The prime
minister directed on May 20, 2017 to hold dialogue with the provincial
government on the transmission and distribution issues being faced by it.
Thereafter, a meeting was held at the
Ministry of Planning and Development on May 24, which was attended by the Sindh
chief minister, Punjab minister of mines and minerals, energy secretaries of
Sindh and Punjab, minister of water and power and minister of state for water
and power. It was suggested in the huddle that based on supply and demand
numbers, energy purchase from the bagasse-based plants could depend on “must
run” during the cane crushing season and “take or pay” or “take and pay” for
the remaining period. The Sindh government agreed to the proposal. The millers then approached NEPRA and
accepted the tariff based on the power acquisition request because they wanted
a higher tariff.
The regulator, while accepting the
petition of the millers, rejected the power acquisition request of the CPPA-G
and declared the plants as must run. Now, the CPPA-G has approached the
regulator for a review of the decision.
Biomass Power
Biomass capacity added and under implementation is presented as follows:
|
Station
|
Community
|
Status
|
||
|
0.1
|
Operational.
|
|||
|
40
|
Under construction. To be operational by Apr 2021.
|
|||
|
20
|
Under construction.
|
|||
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40
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Under construction.
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Biomass
Plants under Implementation
Of the two waste-to-energy projects, both of 12MW gross capacity
each, which were approved by the Alternate Energy Development Board (AEDB) in
September/October 2010,the SSJD Bioenergy is currently in the advanced stage,
and scheduled to go into operation by the first quarter of 2014.
The project located in Mirpurkhas (Sindh) will cost $19.82
million. Generation licence was issued by Nepra in June 2011, while feasibility
report was approved by the AEDB in July 2011. The EPC contract has been signed
with a Chinese company in November 2011, and Nepra has already determined the
tariff.
The other project, Lumen Energia, is being developed in Jhang
(Punjab) costing $22.62 million. Nepra issued the company the generation
licence in February 2012, and has determined tariff as cents 12.92 per unit,
levelised for a period of 30-years project life. The project was scheduled to
achieve COD by December 2013, but has been delayed.
Both the projects are based on agricultural/biomass waste that
includes sugarcane bagasse and trash, rice straw and husk, cotton waste and
alike, and will use conventional steam power cycle technology.
Energy generated by these projects will be dispersed through
local grids. Pakistan generates about 10 million tons of crops residue
annually, which can be used as feedstock to generate 120-MW electricity. Lumen
Energia has plans to install a series of five units of same capacity
waste-to-energy plants in Punjab.
The other important waste that can be converted into energy is
municipal non-hazardous solid waste. Pakistan generates some 56,000 tons of
solid waste on a daily basis in urban areas only, which is increasing at the
rate of 2.4 per cent annually. There are advanced waste-to-energy conversion
technologies that have been proven commercially viable and sustainable, and
recognised as renewable. Refuse-derived fuel (RDF) provides a primary source of
alternate energy, as feedstock for waste-to-energy plants.
Currently, Fauji Cement Company operates a RDF processing plant
of 12 tons per hour, using municipal solid waste of Islamabad/Rawalpindi for
firing RDF in the kiln instead of coal. Also, a 500-tons capacity plant
established in Lahore converts municipal waste into RDF for supplies to major
cement plants.
Not a single waste-to-energy plant has come on stream as yet on
commercial basis though feasibility studies for setting up waste-to-energy
plants based on municipal solid waste were carried long ago out for
installation in selected cities of Pakistan i.e. Karachi, Hyderabad, Sukkur,
Multan, Lahore, Faisalabad, Gujrat, Sialkot, Peshawar and Quetta.
The first-ever project was launched in Peshawar in January 2005,
on BOT basis, with a capacity of producing 4.8MW electricity.The project, which
was a joint venture of foreign investors with the provincial government, was
wound up half the way in 2009.
Likewise, a waste-to-energy plant of 10-MW capacity was planned
for construction in January 2009 in Karachi in collaboration with a US-based
company, using 8,000 tons of municipal waste. There has been no progress. The
city district government of Rawalpindi had approved in December 2009 a project
of installing a RDF plant using 850-1,200 tons of municipal waste per day,
under public-private partnership.
In March 2010 foreign investor under the name ‘Waste Management
Pakistan Ltd’ was awarded the contract, getting 75 acres on long lease. The
project, costing about euro 10 million, was scheduled for completion by
February 2010 but meanwhile the government cancelled the contract.
Similarly, the Punjab government had pre-qualified in April 2010
three parties namely DG Khan Cement, Maple Leaf Cement and Habib Rafiq for setting
up a RDF plant in Faisalabad. There is no further news, however. Now, the
Capital Development Authority (CDA) plans to establish a waste-to-energy plant
under private-public partnership modality, for which the CDA would be providing
land and selling the waste.
Luckily, the international agencies have revived their interest
recently. A World Bank funded project has been initiated by the AEDB for
conducting study for establishing waste-to-energy projects in 20 cities.
Also, baseline surveys and demonstration projects have been
launched by the UN-Habitat in Rawalpindi, Muzaffargarh and Khairpur, in
collaboration with the International Environmental Technology Centre, which is
a branch of the UN Environment Programme (UNEP) mandated to promote environmentally
sound technologies in developing countries with focus on waste management
issues. Likewise, an RDF-based project of 5-10 MW capacity is proposed to be
installed in Karachi, which is being funded by the US Trade Development Agency
(USTDA).
Ever-increasing prices of fossil fuels have promoted
waste-to-energy technology, which is fast becoming an increasingly important
option for alternate power generation the world over. It has the potential to
contribute largely to total energy mix in Pakistan as well, for on-grid as well
as off-grid applications.
The
National Electric Power Regulatory Authority (NEPRA) has fixed upfront
levelised tariff for biomass power projects at Rs 8.6957 per unit for 30 years,
to be applicable from Commercial Operation Date (COD). Keeping in view the
potential of around 1,000MW from biomass, as indicated by the Ministry of
Energy, the authority decided to initiate proceedings for determination of new
upfront tariff for generation of electricity from biomass power projects.
Tariff Biomass
Accordingly, a draft upfront tariff proposal was developed on the basis of information available with the Authority. During the hearing, Punjab Bio Energy and other representatives of PPDB stated that the project cost of $0.8 million is on lower side as compared to cost allowed in the cases of SSJD and Lumen Energia. The representatives of Punjab Bio Energy submitted that the efficiency is directly linked with the project cost. Punjab Bio Energy submitted that the project cost should be $1.86 million instead of proposed $0.8 million. The feasibility study for the PPDB has been conducted by AF Consultant. According to the representative of the AF Consultant, the project cost in the feasibility study based on European technology is $1.53/MW. The representative of AF Consultant submitted that this is comparable with the other technologies and the project cost for reliable technology needs to be allowed for operational period.
The authority considers that the project cost of $1 million recommended by the AEDB for incineration projects is reasonable. According to the tariff determination, the upfront tariff has been worked out on the basis of the interest rate of 6 percent being offered under the SBP scheme. In case of commercial local financing, the tariff shall be computed using applicable KIBOR plus a premium of 300 basis points. In case of commercial foreign financing, the tariff shall be computed using applicable LIBOR plus a premium of 450 basis points. In case negotiated rates/spread is less than the said limits, the savings shall be shared by the power purchaser and the power producer in the ratio of 60:40 respectively.
According to the IRENA and REN21, the maximum construction period of biomass power plant construction period is from 18 to 24 months. NEPRA in bagasse-based power generation projects allowed 24 months construction period from the date of acceptance. From date of financial close, the construction period is 18 months. In the light of the available research on the issue and already precedence available in other countries, the 24 months construction period is sufficient for the biomass power projects.
The authority has further decided to allow financial close time of six months from the date of acceptance of tariff and construction period of eighteen months from the date of financial close for this upfront tariff. The applicability period of this tariff shall be two years from the date of issuance of this tariff. In bagasse-based Upfront Tariff Cost of working capital based on KIBOR plus 2 percent spread for 45 days fuel invoice receivables was allowed in line with other projects. In the instant case 45 days fuel inventory and 30 days receivables were proposed. No comments received regarding the working capital. Accordingly, based on 45 days'' inventory and 30 days'' invoice receivables cost of working capital has been assessed as Rs 1,255/kWh. The working capital component of tariff will be adjusted quarterly based on variation in three months KIBOR.
The power producer ie Central Power Purchasing Agency (CPPA-G) shall submit relevant authentic documentary evidence to the Authority, for adjustment within 15 days of COD of the relevant company. In case the premium on LIBOR/KIBOR is higher than the determined premium, no adjustment on the basis of actual higher premium will be allowed. The interest during construction shall be adjusted at the time of COD on account of actual project financing mix and variation in quarterly LIBOR/KIBOR (where applicable) over the approved reference rates. The interest during construction shall be reassessed for the allowed construction period of eighteen months, starting from the date of financial close of the relevant company, on the same computation basis as already adopted, by applying 3 months KIBOR/LIBOR of last day of the preceding quarter (plus allowed spread thereon), on the basis of phasing for debt injection considered in the computation of upfront tariff. The power producer shall submit relevant authentic documentary evidence to the Authority for the aforesaid adjustment within fifteen days of the COD of the relevant company
In the review petition, the CPPA-G
argued that the basket price would be adversely affected if the sugar mills
were given the old tariff. It estimated the financial impact of the old tariff
at Rs48 billion over the next 10 years.
A senior official of the Power Division
told The Express Tribune that consumer power tariff would go up Rs0.60
per unit excluding taxes and by including taxes the tariff would be Rs0.65 per
unit.
Punjab agriculture department estimates 12 million ones biomass
in the province surplus, the Punjab government has given it the go-ahead to get
a pilot project for power generation launched finally.
Talking about background of the project, the official said the
first study on biogas power-generation mode in Punjab had been conducted and
compiled in 2011, which revealed that the province generates about 30 million ones
biomass (waste of crops such as hay of wheat, cotton buds and dead-plants,
maize leaves and hay and other crops waste) annually.
“Around 50pc of the total available biomass is consumed as
animal feed and the rest goes waste. Later, another study was conducted that
showed availability of 22 million ones of biomass in the province of which 10
million ones is consumed as animal feed and the rest is either of no use or
waste,” the official said.
He said the plan and launch of the project was envisaged after
the government came to know that various countries were successfully generating
power through biomass. “The European Union members are on top in this regard,
as they have planned to produce 50pc of power from biomass till 2024.”
Talking about biomass power generating experience by private
sector of the country, the official said the first power plant on biomass was
installed by a leading business group (Nishat). “It is the first plant having
power generation capacity of 16MW. Since the intensity of heat in biomass is
some less than other modes, they are also mixing some quantity of coal while burning
the biomass for power generation purpose. Since the plant is being run
successfully, we also desire to do so,” the official said.
During the peak of the energy crisis the country’s large-scale
manufacturing (LSM) sector switched over to ‘alternative energy resources’. During the
peak if the energy crisis in Pakistan LSM sector started exploring substitutes , “While power-intensive units like steel
melting, edible oil/ghee and textile spinning opted for generators that run on
high speed diesel and/or furnace oil, gas intensive-units like paper, glass and
chemicals shifted to boilers that can run on coal, waste heat and biomass.”
The SBP report discusses response of different industries to
energy shortages. In the textile sector, spinning and weaving of fiber are
electricity-intensive, whereas dyeing and finishing are gas-intensive
processes. Most large spinning units are
now run on back-up diesel generators, whereas in weaving sector a large number
of units in Faisalabad, use power-looms for fabric manufacturing; some
medium-sized power-looms have installed diesel generators. A number of textile
processing units have installed boilers that can run on bio-fuels like cotton
waste, rice husk and other waste.
Big units such as Nishat, Gul Ahmed, Sitara and Sapphire have
captive power plants. More importantly, these companies use gas-fired
combined-cycle power plants, which generate power from gas; and the waste
produced is automatically utilized to generate steam. The steel sector
comprises melting and re-rolling units. In the steel melting process, scrap is
melted by using arc furnaces to form billets.
“This process is 100 per cent electricity-intensive and cannot
be substituted by any other energy source,” the SBP quarterly report said and
noted that facing power shortages, smaller firms located in Punjab, switched to
diesel-run generators, though it increased production costs and also reduced
productivity as uninterrupted power supply is required to melt steel scrap.
In contrast, larger units in Karachi switched to captive power,
which required higher fixed costs, but guaranteed smooth production without
interruptions. The re-rolling process requires the preheating of billets to
shape final products, which is a gas-intensive process.
“It is estimated that around a dozen re-rolling units in Punjab
have installed coal gasification plants in the previous two years,” the report
revealed and added that those plants were imported from China, with cost
ranging widely between Rs4 million and Rs30m, depending upon size and
specification. In the chemical sector, caustic soda and soda ash are highly
gas-intensive products. Large players in the sector are shifting to coal-fired
boilers.
The paper industry, which is energy-intensive and requires
combination of electricity and steam for paper production, the shortage of main
fuel natural gas, forced large number of pulp manufacturers to use bio-mas run
boilers (mainly wheat straw, kai grass and bagasse) to drain extra moisture
from the paper. The leather industry requires both electricity and steam.
Punjab-based firms are using diesel-run generators as a back-up for
electricity.
Sugar mills in the country are using captive power generated
from bagasse. In the cement sector, which is most energy-intensive within LSM,
production requires various fuels including pulverised coal or coke, natural
gas, lignite and fuel oil, the SBP said in its report, but added: “However, in
Pakistan almost all cement manufacturers shifted from natural gas to coal in
early 2000s, which means this sector was largely immune to the worsening energy
shortages in the country.”
The fertilizer sector has no alternative but to use natural gas
as the principal raw material (feedstock) in production process, the bank
stated and admitted that due to inadequate supply of gas, fertilizer production
had declined in the previous two years and demand-supply gap had to be bridged
with imports.
Although the energy crisis is over, but this has been
accomplished at a cost, LNG is almost twice the industrial cost of gas from
domestic sources, there are moves to increase gas tariffs by about 46% . The
above response that resulted due to acute energy shortages will be revived
again as energy costs are forced to be increased, industry needs to have a
serious and long term look at bio mass energy projects .
The last winter (2017)
smog situation left Lahore in a choking haze, but even in the past
environmental experts and activists have been vocal about air pollution issue.
Now NASA (the National Aeronautics and Space Administration) has pointed out
that burning of crop stubbles may be a major reason for a smog blanket in New
Delhi, and also in Lahore, as the map shows several places in West Punjab that
have thermal emissions.
Both East and West Punjab have two growing seasons — one from
May to September and the other from November to April. In May and November,
Punjab farmers typically sow crops and vegetables for the next season; but
before sowing, they often set fire to fields to clear stubbles of previous crop
and make them suitable for next sowing.
“While burning is a major problem... I don’t believe this is the
reason why the smog has seen a spike this year,” says environmentalist Aleem
Butt. “Action should definitely be taken for burning crop stubbles, but in the
meantime we are being invaded by noxious gases from coal power plants. Another
very big cause which is being ignored is the high level of deforestation this
year.
As for an alternative method for crop stubble burning, the best
method is to plough the stalks back into the earth where they can decompose
into humus. Environmentalist and researcher Noman Ashraf says that labs of the
Environmental Protection Agency (EPA) are not operational, and without any
empirical evidence, there can hardly be any crackdown on factories and other
offenders.
“There are third-party labs which are doing this work, but the
EPA has not bothered to renew their collaborative licences with them either,”
he says. According to him, the Air Quality Index monitors were installed at
five points during the last decade, but because the instruments were not calibrated
they eventually became useless. “If we look at China and India, they at least
have figures to go by,” says Mr Ashraf. “If the EPA claims to have regular
readings then, under the public’s right to know, these figures should be
uploaded on a website or publicised through media.”
EPA argues that it has state-of-the-art labs and regular
readings. “We only had one purchasing issue... otherwise all our equipment is
working just fine,” says an official of the EPA. Now with air pollution levels
high enough to cause concern, EPA has worked out readings of between November 2
and 4. And these reveal some startling figures.
For example, nitric oxide should not be more than 40mcg per
cubic metre but during this period Mall Road saw over 306mcg/cubic metre, and
Mohlanwal (near Bahria Town) 332mcg/cubic metre. Particles less than 2.5µm
(micrometres) are called PM2.5. They are approximately 1/30th the average width
of a human hair. The benchmark for PM2.5 should be 35mcg/cubic metre, but none
of the figures recorded during the period fell within this range. Readings were
similar for PM10, whose levels should have been below 150, but were recorded to
be higher in Shahdara area (264). However in other places levels were below
150.
Sulphur dioxide, which should be well below 120mcg per cubic
metre, was seen highest in Mominpura, an appalling 1,373mcg per cubic metre.
The carbon monoxide levels, which should have been below 5msg/cubic metre, were
recorded at 21mcg/ cubic metre on Mall Road, and 17mcg/cubic metre at Mohlanwal,
while at other places the levels were slightly higher than 5.
The issue of crop
stubble burning may have been misinterpreted. “This is nothing new in the
region and has been happening for decades. But this recent spike is because
farmers in East Punjab, who had originally been selling their wheat stalks for
biomass plants, burnt their agri-waste this year after their requested price
was turned down by the biomass plants.”
A sharecropper farmer of Okara area says that seeds and other
agriculture inputs are so costly nowadays that it is inconceivable to buy more
land only in order to plough the stalks back in the ground. “Burning is much
more convenient for us.”
Naseemur Rehman Shah, a spokesperson for EPA, says his
department has urged the agriculture department to take notice of the problem,
but no action has so far been taken.
He too doesn’t agree with the view that crop burning is the
major reason behind the smog. “Climatic change is happening at a global level,
and every region is affected. Smog or fog that used to come later in the year
has happened earlier this time.”
But when asked about the trees cut down in Lahore because of
various development projects, Rehman says the EPA did not disallow it because
that was the last resort. “The government has announced that for every public
sector project one per cent of the total cost has to go into tree plantation,”
he says.
He adds that even corridors like the Motorway are having trees
planted along them. “Sometimes tree cutting has been allowed because it was the
need of the day,” he says.
There are also other factors contributing to air pollution and
one of these is factories, he says. “While crop stubble burning is a serious
issue, most of the fumes are coming from East Punjab; but at the same time from
within Lahore, we have factories that cannot use natural gas and therefore burn
all kinds of materials including rubber to create fuel.”
He says that around 300 units have been shut down by the Punjab
government in the recent past and these include large- and small-scale
industries. Regarding air pollution, Rehman says that currently there are about
3,000 cases under trial in environment tribunals from all over Punjab. But
apart from industries, there is the huge issue of traffic as well.
Rehman says that traffic congestion, bad roads, increasing
number of vehicles, old vehicles with bad engines, and banned vehicles were
main causes and many were still operating. The two-stroke auto and cycle
rickshaws both are seen running despite being banned.
“We are fully aware of the situation and the ban is being
implemented slowly. After all changes cannot happen overnight. A decade ago we
were worried about how the air pollution issue was being neglected but by
introducing alternative transport projects like the Orange Line... the
government is moving in the right direction.”
“These projects are most environment-friendly,” says Rehman.
“Orange Line will run on electricity, new LTC buses will use CNG and other Euro
2 and 3 standard buses will use good quality diesel.”
