Biomass Power Plant 4 MWe Fin_eng

8/8/2019 Biomass Power Plant 4 MWe Fin_eng

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T E C H N I C A L A N D E C O N O M I C A LP R O J E C T P R E S E N T A T I O N

K O I C K E N E R G E T I C K S P O L O N O S A . S . 2 0 0 9

Biomass power plant 4 MWe


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CONFIDENTIALBIOMASS POWER PLANT, KES a.s, Nov-09

Introduction

Koick energetick spolonos a.s. (KES) is well recognized professional company in theenergy sector with excellent know-how in combine production of heat and electricity

KES based on the agreement with VSS a.s. is developing Biomass power plant in areal of VSS

KES obtained license from Ministry Economy to build biomass power plant and approvals fromNational electricity network operator (SEPS) and Distribution electricity operation company

(VSD) for connection to network

Based on the technical-economical feasibility study KES prepared basic design for 4 MWebiomass power plant with heat combine production :

Next main consideration were applied: Size of existing building and space for biomass stock Available biomass capacities in the region Capacity for heat deliveries Sustainability of the project

Based on the engineering studies and pricing by international companies the total investmentis estimated to 15,3 mil. EUR


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DESIGN LAYOUT

Visualization andfuture view from the near road

2009 KES a.s.


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LOCATION

Biomass power plantis proposed to be

build in the areal ofVSS, which is locatedin south industrialpart ofKoicewithuse of existing

buildings and

infrastructure to bringmaximum efficiencyinto the project. Theproposed location hasnext strong strongpoints: existingconnection to Centralheating system of city,existing high voltage

22 kV line forelectricity connectionand transport logisticincluding railway line.

2009 KES a.s.


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Technology

The combine heat and electricity production was selected for the biomass power plant Based on the analysis of sensitivity, the price of biomass was found as most critical The different turbine and boiler manufacturers were included in the pre-tendering procurement phase

including local and international companies Pre-tendering process documentation was prepared with description of supply and main technical

parameters Main technology components:

Biomass fuel handling equipment Fuel warehouse with automatic feeders daily capacity Biomass furnace Steam boiler Condenser and Condensate pumps Air cooler Feed water tank and feed water pumps Water treatment Reduction station Electrostatic precipitator (ESP)

Combustion air fan Flue gas fans Wet bottom ash container Dry fly ash container Transformer station and connection to 22 kV electric cable Stack Control systems Commissioning


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High pressure steam boiler

BFB (BubblingFluidized Bed) typeof steam output 22t/h at 485 oC and55 bar(a) withefficiency 89%nominal power.The advanceddesign of boilerenabling operate

boiler in the rangebetween 30% -100% and bringingadvantage for the

availableparameters of fuel.

Image is intellectualproperty of MW Power

Image is intellectual property of RENEWA


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Extraction-Condensing Turbine

Extractioncondensingturbine withmaximum power4 MWe enablingto operate with

heating in theextraction modeand in thecondensingmode. The mainadvantage of

condensingmode is to havepossibility ofoperation powerplant during all

year.

Images are intellectualproperty of MAN TURBO

Image is intellectualproperty of SIEMEN


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Basic process flow diagram

The energy inlet is expectedin the form of biomass fuel,steam boiler is recoveringenergy from the furnace

burning solid biomass fuelat average calorific value 9MJ/kg. The steam isconnected by piping toextraction condensingturbine and reduction

steam station to havepossibility to by-passturbine. Part of the steamextracted from the turbine

will be used fortechnological process andfor preparation of the hot

water for heating purposesand connection to primarynetwork of central heating

system and to secondaryheating system in theindustrial park of VSS. Theelectricity production wasestimated around 20.000MWh and heat productionaround 200.000 GJ.

Image is intellectual

property of MW POWER


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List of contacted companiesduring pre-tendering phase

WEISS France MW Power METSO WRTSIL Joint venture MAWERAVIESSMAN group MAXXTEC Germany MAN TURBO - Germany SIEMENS Group

EKOL Czech republic KOVOSTA FLUID Czech republic BRONSWERK HEAT TRANSFER Czech republic SPIG Italy FANS Czech republic Jeffrey Rader Sweden ISTROENERGO Slovakia ABB Group RENEWA Finland TGM KANIS Germany VAS Austria BACOCK WILCOX Denmark KALUGA - Russia


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CONFIDENTIAL0 BIOMASS POWER PLANT, KES a.s, Nov-09

Bids and investment structure

Companies make pricing based on the scope of supply, which wasselected by them as it was not strictly limited and therefore wereceived proposals for individual parts of technology for turbine(MAN TURBO) or boiler (WEISS), respectively for technology ofpower plant without civil works, installation cost, supportive systemand ect. (EKOL, RENEWA). Based on their offer and continues

detail engineering works we projected next investment structure:

In the this investment cost are not include investments needed foracquisition of land, buildings and infrastructure from VSS a.s. andpreliminary development costs.

Num. Part 000 EUR in mil. SKK

1 Turbogenerator 4 Mwe and control system 3 100 93 391

2 Fluid steam boiler and flue gas treatment 6 746 203 230

3 Air condenser, electrical transformator and supportive systems 2 300 69 290

4 Fuel handling system 600 18 076

5 Civil works, additional infrastructure, engineering, installation 2 549 76 797

Spolu 15 295 460 783

Investment costs


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Electricity price

Price regulation num. 7/2009 by national regulationofficeURSO, article.1, B, 1/e/2: production of el. from biomass EUR/MWh 125,980

Price modification based on law 309/2009, 6, 5) basedon supporting from public financial sources (grants) from 30% to 40% .. -8 % from 40% to 50% .. -12 % < 50% -16 %

Price support is based on law 309/2009, 3 forperiod of 15 years.


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Heating price

Price is calculated based on the regulatoryframework of RSO

Competiveness of price is Based on cost of variable part of heat produced from gas in the

local sources, which represents price around 11 EUR/GJ Heat prices of the plants connected central heating network,

which represent 8,19 EUR/GJ KOSIT a.s. (0049/2009regulated price

Competitive heat price for our project is around 8 EUR/GJ For the first year of operation in our model heat price is

calculated based on regulation rules on the level 8,082EUR/GJ


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Sales

Prices are estimated based on legislation and assumptions related to local market The total volume is estimated based on technology process flows and specific

conditions for heat supplies Growth indexes were applied due to DCF method used internally.

Sales 2011 2012 2013 2014 2015 2016 2017 2018 2019heat sales in units GJ 0 201 646 201 646 201 646 201 646 201 646 201 646 201 646 201 646

price EUR/GJ 8,00 8,00 8,00 8,00 8,00 8,00 8,00 8,00 8,00

annual growth index index - 1,030 1,042 1,044 1,033 1,044 1,026 1,058 1,058

growth index - 1,000 1,030 1,073 1,120 1,157 1,208 1,240 1,312 1,388

total sales of heat 000 EUR 0,00 1 661,56 1 731,35 1 807,53 1 867,18 1 949,33 2 000,01 2 116,02 2 238,74

electricity sales in units MWh 0 22256 22256 22256 22256 22256 22256 22256 22256

price EUR/MWh 115,9 115,9 115,9 115,9 115,9 115,9 115,9 115,9 115,9

annual growth index index - 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

growth index - 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

total sales of electricity 000 EUR 0,00 2 579,54 2 579,54 2 579,54 2 579,54 2 579,54 2 579,54 2 579,54 2 579,54

Sales total 000 EUR 0,00 4 241,11 4 310,89 4 387,07 4 446,72 4 528,87 4 579,56 4 695,56 4 818,29


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Costs

Costs structure depends mainly on biomass as fuel for the process, what is calculated based on technicalparameters. Other costs are define by legislation (el. service for back up, insurances, structure of wages) othercosts as maintenance and service are on the minimum level due to guarantees and high quality standardsused for production of technology. Some other costs will specified during specification of detail operationmodes .

Costs 2011 2012 2013 2014 2015 2016 2017 2018 2019

biomass consumption t 0 36 363 36 363 36 363 36 363 36 363 36 363 36 363 36 363

biomasss price EUR/t 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000

growth index - 1,000 1,030 1,061 1,093 1,126 1,159 1,194 1,230 1,267

Biomass costs 000 EUR 0,00 1 310,88 1 350,21 1 390,71 1 432,43 1 475,41 1 519,67 1 565,26 1 612,22

el. service kW 0 4000 4000 4000 4000 4000 4000 4000 4000

price of el. service per month EUR/kW 34,400 34,400 34,400 34,400 34,400 34,400 34,400 34,400 34,400

growth index - 1,000 1,030 1,107 1,148 1,182 1,221 1,263 1,316 1,371

Cost of el. service 000 EUR 0 142 152 158 163 168 174 181 189number of employess 0 6 6 6 6 6 6 6 6

average cost pre month EUR 20000 20000 20000 20000 20000 20000 20000 20000 20000

growth index - 1,000 1,030 1,107 1,148 1,182 1,221 1,263 1,316 1,371

Cost of salaries 000 EUR 0 124 133 138 142 147 152 158 165

maintenance EUR 0 100 000 100 000 100 000 150 000 150 000 150 000 200 000 200 000

cost of fuel handling EUR 0 12 000 12 000 12 000 12 000 12 000 12 000 12 000 12 000

other operational cost EUR 459 000 125 000 125 000 125 000 125 000 125 000 125 000 125 000 125 000

sum EUR 459 000 237 000 237 000 237 000 287 000 287 000 287 000 337 000 337 000

growth index - 1,000 1,030 1,107 1,148 1,182 1,221 1,263 1,316 1,371

Total other cos ts 000 EUR 459 244 262 272 339 351 362 443 462

Total costs 000 EUR 459 1 820 1 898 1 959 2 076 2 141 2 207 2 348 2 427


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Economical summary of project

2011 2012 2013 2014 2015 2016 2017 2018 2019

Depreciation tis. EUR 0 706 706 706 706 515 515 515 515

in 000 EUR 2011 2012 2013 2014 2015 2016 2017 2018 2019

Sales in project total 0,000 4241,105 4310,891 4387,070 4446,719 4528,874 4579,557 4695,558 4818,287

Costs in project total 459,000 1820,319 1897,753 1958,549 2076,002 2140,504 2207,309 2347,564 2427,379

Depreciation assets of project 0,000 706,350 706,350 706,350 706,350 515,100 515,100 515,100 515,100

Profit on project before tax and interest -459,000 1714,436 1706,788 1722,172 1664,367 1873,271 1857,148 1832,893 1875,808

Structure of project financing

Own sources 000 EUR 2 790,00Grant 000 EUR 6 000,00

Bank loan 000 EUR 6 510,00

Depreciation is calculated based on structure of the investment depreciation ,where major part is investment. The total investment used for depreciationcalculation is decreased for the amount of grant.

The project shows good parameters of profitability with grant support. Total investment isprojected on 15,3 mil. EUR. Grant represent 39% and bank loan 43%. The amount of ownfinancial resources was set up based on ratio to bank loan on the level of 30%. For our internalneeds we are working with DCF method and interest rate 7%. Bank loan which we have inmodel has the maturity 6 year with grace period of 1 year.

Parameters in our DCF model for IRR

Interests % 7,0Loan, maturity with 1 year grace period years 6,0

IRR (15 years) % 12,6


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Sensitivity analysis

In our internal model we make sensitivityanalysis for expected values according legislationand market. Analysis shows to us, that highestsensibility lay on biomass. This was the reasonfor deciding for fluid technology, which enable tous use alternative fuels to wood chips, which arehighly competitive. Fluid boiler is increasing totalinvestment cost, but on the other site, use of fluidtechnology brings to project long term confidencefor profit generation without any bidingagreements with producers or traders with woodchips.


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Technical assumptions for the model

Data in the figures above are estimated based on the preliminary technicalparameters and expected operation mode, which depend on the possibility

to supply the heat. In the winter season is expected to operate the plant ona full load with delivery within the areal of the VSS and to the network.Based on heat demand in VSS, we can expect, that ratio of this heatsupplies will be 50:50. Dependence on the supplies of heat during thesummer is minimized by condensation turbine and air condenser, which

will allow to operate turbine at maximum 2 MWe.

Month of the year Jan Feb Mar Apr Maj Jun Jul Aug Sep Okt Nov Dec

Days 31 28 31 30 31 30 31 31 30 31 30 31

Heat supply MWt 9 9 9 9 4 3 2 2 3 9 9 9

Electricity supply MWe 4 4 4 4 2 1 1 1 1 4 4 4

Heat supply per month GJ 24106 21773 24106 23328 9641 7662 6108 6601 6783 24106 23328 24106

Total heat supply GJ 201646

Electricity supply per month MWh 2976 2688 2976 2880 1190 946 754 815 837 2976 2880 2976

Consumption MWh 446 269 298 288 119 95 75 81 84 298 288 298

Total e lectricity supply MWh 22256

Energy in biomass per month GJ 39123 35337 39123 37861 15647 12435 9914 10713 11008 39123 37861 39123

Total energy supplied in biomass GJ 327266


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Grant schema 2.1

Code of call from 26.10.2009 for project is KaHR 21SP 0901, callrepresents amount of 57 mil. EUR dedicated to energy efficiency andexploitation of renewable sources.

Specifically for biomass power plants the limit is max. 10 MWe or 30 MWtthermic energy. In both parameters our projects is well below.

The maximum financial aid for one project is 6 mil. EURor 50% of all eligibleinvestment costs. The maximum of total eligibible cost for project is 25 mil.EUR. The deadline form submitting of proposal is 22.2.2010.


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Time schedule

To the engineering preparation is dedicated team including 17professionals in cooperation with engineering office ECONS -Koice, which successfully prepared documentation for landapproval in September October 2009.

Time schedule

Indicative proposal from bank to finance project

Closing day of buy contract with VSS

Binding proposal from bank to finance project

Civil construction permission from local authority

Public tender

Grant application preparation

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Decemeber 2010 January 2010 February 2009


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List of approvals

The list of approvals and agreements added:

Licence to build power plant from Ministry of economy Approval for connection to GRID SEPS a.s. Approval for connection to GRID VSD a.s. Agreement from City Kosice and District Kosice - South Agreement from City Architect Authority Agreement from Regional Environment Authority

The list of approvals agreements obtained and not added to presentation: Civil Aviation Authority of the Slovak republic Regional authority of Fire and Rescue Services Owner of industrial park VSS a.s. Owner of primary heating network in the city TEKO a.s. Regional authority of Public Healthcare Airport Koice District office of civil defend and crisis operation


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Other attachments and contacts

Other attachment: Architectonic study Bids in the pre-tendering process Commercial register Audited financial results 2008

Contacts:Koick energetick spolonos a.s.

Teplrensk 3/A

042 92 Koice

Statutary representative: Ing. Vladimr DolnContact person: Ing. Miroslav FberTel./Fax: 055 6192836 / 055 - 6192835E-mail: [email protected]

Documents

Biomass Power Plant 4 MWe Fin_eng