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Fakulteit Ingenieurswese
Faculty of Engineering
Economic Impacts of Mechanisation and In-
House Renewable Energy Generation and
Integration in African CPO Mills
R.K. Padi
Promoters:
Dr. A.F.A Chimphango
Prof. J.F. Görgens
2 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Overview
Background
Problem Statement
Objectives
Process Modelling Approach
Results
Conclusion
2
3 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Background
Background
Problem Statement
Scope of Study Objectives Process
Modelling Approach
Results Conclusions
Oil Palm value chain
Study focus area
4 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Background
African rural CPO processing
Dominating traditional Processing (>80 % )
Inherent setbacks of traditional technologies
• Lower production capacities
• Labour Intensive
• Poor product quality
Overall low productivity- Mechanisation addresses aforementioned
challenges
Background
Problem Statement
Scope of Study Objectives Process
Modelling Approach
Results Conclusions
5 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Problem Statement
Reasons for less adoption of mechanised units?
• Perceived risk on profit margins
• Lack of diverse energy
• Social acceptance
Background
Problem Statement
Scope of Study
Objectives Process
Modelling Approach
Results Conclusions
6 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Objectives
Develop process models for various levels of mechanization in the CPO
process
Determine the potential contribution of the process biomass residue to
its energy demands.
To establish the economic impact of mechanization and in-house energy
integration in the CPO process
Background
Problem Statement
Scope of Study
Objectives Process
Modelling Approach
Results Conclusions
7 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Modelling Approach
• Degree of
Mechanisation
• Organisational
level
Energy Integration
Schemes
• Base-Case
• Improved Case
Background
Problem Statement
Scope of Study
Objectives Process
Modelling Approach
Results Conclusions
8 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Simplified CPO process flow diagram
Background
Problem Statement
Scope of Study
Objectives Process
Modelling Approach
Results Conclusions
9 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Process configurations investigated
Traditional Semi-Mechanised Mechanised
• Household scale
• 110 liters CPO/day
• Small-scale
• 1193 liters of CPO/day
• Industrial scale
• 49287 liters CPO/day
Background
Problem Statement
Scope of Study
Objectives Process
Modelling Approach
Results Conclusions
10 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
In-house Energy Generation & Integration
Traditional and semi-mechanised
• Thermal energies by combusting solid residues in Improved cook
stoves
Mechanised (steam, hot water & electricity)
• Cogeneration of heat and power (CHP) from solid residues (MF, PKS,
EFB)
• Cogeneration of heat and power from Biogas (POME)
Background
Problem Statement
Scope of Study
Objectives Process
Modelling Approach
Results Conclusions
11 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
2: Shredding & drying EFB + conventional
fuel
Cogeneration (CHP) from solid residues
• EFB has high moisture (65%) & less combustible
• Two scenarios investigated:
1: No EFB addition
Background
Problem Statement
Scope of Study
Objectives Process
Modelling Approach
Results Conclusions
12 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Background Problem
Statement Scope of
Study Objectives
Process Modelling Approach
Results Conclusions
Cogeneration (CHP) from solid residues
• Steam turbine power-to-heat ratio between 0.1 – 0.3 (US EPA, 2007)
• Process model developed in Aspen Plus® simulation software
• Economic assessment based on Ghana’s year 2014 conditions (Interest rate
-24%; Inflation rate -15%)
13 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Cogeneration (CHP) from solid residues
Results
Technical Performance Annual rate of generation Scenario 1 Scenario 2
MF (tons/yr) 13141.44 13141.44
PKS (tons/yr) 6836.47 6836.47
EFB (tons/yr) - 45576.46
CPO Process steam (tons/yr) 40884.48(100)* 40884.48(100)*
CPO Process hot water (tons/yr) 31074.86(100)* 31074.86(100)*
EFB drying steam (tons/yr) - 161840.62
CPO process electricity (MW/yr) 1654.85(100)* 1654.85(100)*
Export electricity (MW/yr) 4705.64 17040.79
* Values in parenthesis represents percentage of energy demand of the 13 ton FFB/hr CPO mill attained
Economic Performance
Parameters Electricity s.p. of $0.207/kWh Electricity s.p. of $0.348/kWh
Scenario 1 Scenario 2 Scenario 1 Scenario 2
NPV (million $)
-27.96 -55. 91 -22.03 -38.85
IRR (%) 0.10 1.42 9.94 12.93
Payback period (yrs) 24.8 23.2 15.5 13
Background
Problem Statement
Scope of Study
Objectives Process
Modelling Approach
Results Conclusions
14 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Background Problem
Statement Scope of Study Objectives
Process Modelling Approach
Results Conclusions
Cogeneration (CHP) from solid residues
Conclusions
• Both Scenarios investigated CAN MEET in-house energy demand with excess electricity for export.
• Scenario 1 and 2 did NOT achieve expected IRR of 40%. Scenario 2 (EFB addition) improved the economics from IRR of 9.94% to 12.93%
• Realistic electric price at $1.132/kWh and $0.842/kWh for Scenario 1 and Scenario 2 respectively (for IRR of 40%).
• Scenarios 1 and 2 attained NPVs of $2.145 million and $1.774 million at grant contributions of 80 and 65% respectively at prevailing power price of $0.348/kWh. Thus both are viable under grant funding.
15 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Cogeneration (CHP) from Biogas (POME)
• Palm oil mill Effluent (POME) biogas yield of 2.65 - 4.96 m3m-3 day-1
(Yeoh, 2004).
• Scenarios investigated: Steam-turbine and Gas-engine routes
• CHP process modelled in Aspen Plus® simulation software
• Economic assessment based on Ghana’s year 2014 economic
conditions (Interest rate -24%; Inflation rate -15%)
Background
Problem Statement
Scope of Study
Objectives Process
Modelling Approach
Results Conclusions
16 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Cogeneration (CHP) from Biogas (POME)
• Steam turbine process- similar to solid residue CHP
• Gas-engine process
Background
Problem Statement
Scope of Study
Objectives Process
Modelling Approach
Results Conclusions
17 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Cogeneration (CHP) from Biogas (POME)
Results
Technical Performance
Annual rate of generation Gas-engine route Steam turbine route
Biogas (tons/yr) 2073.326 2073.326
CPO Process steam (tons/yr) 2308.198 (5.65)* 11742.602 (28.72)*
CPO Process hot water (tons/yr) 29880 (96.16)* -
CPO process electricity (MW/yr) 1654.85 (100)* 368.865 (22.29)*
Export electricity (MW/yr) 1117 -
* Values in parenthesis represents percentage of actual energy demand by the 13 ton FFB/hr CPO mill attained
Economic Performance
Parameters Electricity s.p. of $0.207/kWh Electricity s.p. of $0.348/kWh
Gas-engine Steam turbine Gas-engine Steam turbine
NPV (million $) -6.38 -14.46 -4.71 -14.22
IRR (%) 7.80 -0.77 14.89 0.18
Payback period (yrs) 11.3 14.3 9 13.7
Background
Problem Statement
Scope of Study
Objectives Process
Modelling Approach
Results Conclusions
18 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Cogeneration (CHP) from Biogas (POME)
Conclusions
• Gas-engine and steam-turbine NOT meet all in-house energy demand. Gas-engine route attained all process electricity demand with excess for export.
• Both routes investigated did NOT attain expected IRR of 40%. Gas-engine route more promising with IRR of 14.9% at $0.348/kWh.
• Realistic electricity price at $0.753/kWh and $9.403/kWh for gas-engine route and steam-turbine route respectively (for IRR of 40%)
• At power price of $0.348/kWh, Gas engine attained NPV of $158000 at 40% grant; steam turbine NPV of $1.834 million at 90% grant. At $0.207/kWh, gas-engine NPV of $234000 at 60% grant; steam turbine NPV of $576000 at 90% grant. Thus both viable under grant funding.
Background
Problem Statement
Scope of Study Objectives Process
Modelling Approach
Results Conclusions
19 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Results of Energy Integration in CPO
Processes
• Mechanised I/C – adopted CHP solid residue (+EFB) (100% in-house energy attained & competitive power price of $0.842/kWh)
• Substituting external energy firewood (traditional), and national grid power (mechanized) with available CPO process biomass residues is feasible.
• The highest and least energy intensive processes: semi-mechanized B/C (37.058 MJ/kg CPO) and mechanized B/C or I/C (6.007 MJ/kg CPO) respectively.
0
5
10
15
20
25
30
35
40
B/C I/C B/C I/C B/C I/C
Traditional Semi-mechanised Mechanised
Ene
rgy
Inte
nsi
ty (
MJ/
kg C
PO
)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%Steam (Biomass residue)
Hot water (Biomassresidue)Electricity (biomassresidue)Electricity (national grid)
Diesel oil
MF, EFB
MF, EFB, residual oil
Manual energy
Wood
Background
Problem Statement
Scope of Study
Objectives Process
Modelling Approach
Results Conclusions
20 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Economic Results of CPO Process
NPV of $18,500,245 & $11,501,445 Background
Problem Statement
Scope of Study
Objectives Process
Modelling Approach
Results Conclusions
0
0.01
0.02
0.03
0.04
0.05
0.06
0
4
8
12
16
20
Spec
ific
Cap
ital
Inve
stm
ent
($/k
g)
Tota
l Cap
ital
Inve
stm
ent
($)
Mill
ion
s
Fixed Capital Working Capital Specific capital investment ($/kg)
0
0.5
1
1.5
02468
101214
Spec
ific
Pro
du
ctio
n C
ost
($
/kg)
Tota
l Pro
du
ctio
n C
ost
($
/yr)
Mill
ion
s
Utilities General expenses
Fixed charges Feedstock (delivered)
O & M Specific Production Cost ($/kg)
• Variation in TCI ranging $4464 - $17.746 million due to difference in capacities
• SCI ranging $0.013/kg - $0.055/kg with semi-mechanised level having least range of $0.013 - 0.019/kg while mechanised level attained highest range of $0.053 - 0.055/kg
• At B/C scenarios, traditional level’s SPC was higher than the semi- and mechanised level’s by 15.25% and 63.66% and by 31.90% and 42.73% at I/C scenarios respectively. Thus, suggesting a high benefit of economies of scale on the production cost.
21 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Economic Results of CPO Process
NPV of - $ 16,212 & -$10,110 NPV of -$109,334 & $301,643
Key: CCF –Cumulative Cash Flow NPV- Net Present Value
NB: At minimum selling price of $710/ton CPO
-40
-30
-20
-10
0
0 1 2 3 4 5 6
CC
F ($
)
Tho
usa
nd
s
Plant life (yrs)
Traditional CPO CCF
Base Case Improved Case
-0.5
0
0.5
1
1.5
2
0 2 4 6 8 10
CC
F ($
)
Mill
ion
s
Plant life (yrs)
Semi-Mechanised CPO CCF
Base Case Improved Case
-100
0
100
200
300
400
0 5 10 15
CC
F ($
) Mill
ion
s
Plant life (yrs)
Mechanised CPO CCF
Base Case Improved Case
NPV of $18,500,245 & $11,501,445
NPV of $18,500,245 & $11,501,445
-300
-250
-200
-150
-100
-50
0
20 30 40 50 60 70 80 90 100 110
NP
V (
$)
Tho
usa
nd
s
Grant contribution to TCI (%)
Semi-mechanised B/C Traditional B/C
Traditional I/C
Background Problem
Statement Scope of
Study Objectives
Process Modelling Approach
Results Conclusions
22 Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Conclusions
• For (B/C), only the mechanized process is economically viable with an NPV of $18.5 million and IRR of 47.23%.
• For I/C: semi-mechanized and mechanized processes are the economically viable options with IRR of 143% and 40.57% respectively.
• Poor performances of traditional- B/C & -I/C and the semi-mechanized B/C mainly due to their unduly high SCI ranging $0.019 – 0.053/kg and SPC between $0.431 – 1.187/kg as they still remained unviable under 100% grant funding
• Thus mechanization is economically beneficial in CPO processing
• In-house energy from process residue is viable and most promising at semi-mechanized and mechanized levels.
Background
Problem Statement
Scope of Study Objectives Process
Modelling Approach
Results Conclusions
Fakulteit Ingenieurswese
Faculty of Engineering
Thank You!