Tag Archives: biomass supply chain

Biomass Exchange – Key to Success in Biomass Projects

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Biomass exchange is emerging as a key factor in the progress of biomass energy sector. It is well-known that the supply chain management in any biomass project is a big management conundrum. The complexity deepens owing to the large number of stages which encompass the entire biomass value chain. It starts right from biomass resource harvesting and goes on to include biomass collection, processing, storage and eventually its transportation to the point of ultimate utilization.

biomass-exchange

Owing to the voluminous nature of the resource, its handling becomes a major issue since it requires bigger modes of biomass logistics, employment of a larger number of work-force and a better storage infrastructure, as compared to any other fuel or feedstock. Not only this their lower energy density characteristic, makes it inevitable for the resource to be first processed and then utilized for power generation to make for better economics.

All these problems call for a mechanism to strengthen the biomass value chain. This can be done by considering the following:

  • Assuring a readily available market for the resource providers or the producers
  • Assuring the project developers of a reliable chain and consistent feedstock availability
  • Awareness to the project developer of the resources in closest proximity to the plant site
  • Assurance to the project developer of the resource quality
  • Timely pick-up and drop of resource
  • Proper fuel preparation as per technology requirements
  • Removal of intermediaries involved in the process – to increase value for both, the producers as well as the buyers
  • No need for long term contracts (Not an obligation)
  • Competitive fuel prices
  • Assistance to producers in crop management

Biomass Exchange Model

The figure below gives a general understanding of how such a model could work, especially in the context of developing nations where the size of land holdings is usually small and the location of resources is scattered, making their procurement a highly uneconomic affair. This model is commonly known as Biomass Exchange

In such a model, the seed, fertilizer shops and other local village level commercial enterprises could be utilized as an outreach or marketing platform for such a service.  Once the producer approves off the initial price estimate, as provided by these agencies, he could send a sample of the feedstock to the pre-deputed warehouses for a quality check.

These warehouses need to be organized at different levels according to the village hierarchy and depending on the size, cultivated area and local logistic options available in that region. On assessing the feedstock sample’s quality, these centers would release a plausible quote to the farmer after approving which, he would be asked to supply the feedstock.

On the other hand, an entity in need of the feedstock would approach the biomass exchange, where it would be appraised of the feedstock available in the region near its utilization point and made aware of the quantity and quality of the feedstock. The entity would then quote a price according to its suitability which would be relayed to the primary producer.

An agreement from both the sides would entail the placement of order and the feedstock’s subsequent processing and transportation to the buyer’s gate. The pricing mechanisms could be numerous ranging from, fixed (according to quality), bid-based or even market-driven.

Roadblocks

The hurdles could be in the form of the initial resource assessment which could in itself be a tedious and time consuming exercise. Another roadblock could be in the form of engaging the resource producers with such a mechanism. Since these would usually involve rural landscapes, things could prove to be a little difficult in terms of implementation of initial capacity building measures and concept marketing.

Benefits

The benefits of  a biomass exchange are enumerated below:

  • Support to the ever increasing power needs of the country
  • Promotion of biomass energy technologies
  • Development of rural infrastructure
  • Increased opportunities for social and micro-entrepreneurship
  • Creation of direct and indirect job opportunities
  • Efficient utilization of biomass wastes
  • Potential of averting millions of tonnes of GHGs emissions

Conclusions

In India alone, there has been several cases where biomass power projects of the scale greater than 5 MW are on sale already, even with their power purchase agreements still in place. Such events necessitate the need to have a mechanism in place which would further seek the promotion of such technologies.

Biomass Exchange is an attractive solution to different problems afflicting biomass projects, at the same time providing the investors and entrepreneurs with a multi-million dollar opportunity. Although such a concept has been in existence in the developed world for a long time now, it has not witnessed many entrepreneurial ventures in developing nations where the need to strengthen the biomass supply chain becomes even more necessary.

However, one needs to be really careful while initiating such a model since it cannot be blindly copied from Western countries owing to entirely different land-ownership patterns, regional socio-political conditions and economic framework. With a strong backup and government support, such an idea could go a long way in strengthening the biomass supply chain, promotion of associated clean energy technologies and in making a significant dent in the present power scenario in the developing world.

Rationale for Biomass Supply Chain

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Biomass resources have been in use for a variety of purposes since ages. The multiple uses of biomass includes usage as a livestock or for meeting domestic and industrial thermal requirements or for the generation of power to fulfill any electrical or mechanical needs. One of the major issues, however, associated with the use of any biomass resources is its supply chain management.

The resource being bulky, voluminous and only seasonally available creates serious hurdles in the reliable supply of the feedstock, regardless of its application. The idea is thus to have something which plugs in this gap between the biomass resource availability and its demand.

The Problem

The supply chain management in any biomass-based project is nothing less than a big management conundrum. The complexity deepens owing to the large number of stages which encompass the entire biomass value chain. It starts right from the resource harvesting and goes on to include the resource collection, processing, storage and eventually its transportation to the point of ultimate utilization.

Owing to the voluminous nature of the resource, its handling becomes a major issue since it requires bigger modes of logistics, employment of a larger number of work-force and a better storage infrastructure, as compared to any other fuel or feedstock. Not only this their lower energy density characteristic, makes it inevitable for the resource to be first processed and then utilized for power generation to make for better economics.

All these hassles associated with such resources, magnify the issue of their utilization when it comes to their supply chain. The seasonal availability of most of the biomass resources, alternative application options, weather considerations, geographical conditions and numerous other parameters make it difficult for the resource to be made consistently available throughout the year. This results in poor feedstock inputs at the utilization point which ends up generating energy in a highly erratic and unreliable manner.

The Solution

Although most of the problems discussed above, are issues inherently associated with the usage of biomass resources, they can be curtailed to a larger extent by strengthening the most important loophole in such projects – The Biomass Resource Supply Chain.

World over, major emphasis has been laid in researching upon the means to improve the efficiencies of such technologies. However, no significant due diligence has been carried out in fortifying the entire resource chain to assure such plants for a continuous resource supply.

The usual solution to encounter such a problem is to have long term contracts with the resource providers to not only have an assured supply but also guard the project against unrealistic escalations in the fuel costs. Although, this solution has been found to be viable, it becomes difficult to sustain such contracts for longer duration since these resources are also susceptible to numerous externalities which could be in the form of any natural disaster, infection from pests or any other socio-political or geographical disturbances, which eventually lead to an increased burden on the producers.

Sugarcane Trash – A Renewable Fuel of Today and Future

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In Indian sugar mills, the frequent cycles of ups and downs in the core business of selling sugar has led to the concentration towards the trend of ancillary businesses, like cogeneration power plant and ethanol production, becoming the profit centres. These units, which were introduced as a means to manage sugar mills’ own byproduct, like bagasse, are now keeping several sugar mills financially afloat. Thus, the concept of ‘Integrated Sugar Mill Complex’ has now become a new normal.

Limitations of Bagasse

Bagasse is a ubiquitous primary fuel in cogeneration plants in sugar mills, which adds more than 2,000 MW of renewable power to the Indian energy mix. The inclination of cogeneration plant managers towards bagasse is primarily because of its virtue of being easily available on-site, and no requirement to purchase it from the external market.

This remains true despite its several significant shortcomings as a boiler fuel, prime among which are very high moisture content and low calorific value. As a result, the fuel-to-energy ratio remains abysmally low and the consequent lesser power generation is depriving these sugar mills from achieving true revenue potential from their ancillary power business vertical, which is pegged at ~10,000 MW.

Sugarcane Trash – A Wonder Waste

Though, there is a much neglected high calorific value biomass which is available in proximity of every sugar mill and is also a residue of the sugarcane crop itself, which could enable the cogeneration units to achieve their maximum output potential. This wonder waste is sugarcane trash – the dry leaves of sugarcane crop – which is left in the farms itself after sugarcane harvesting as it has no utility as fodder and generally burnt by farmers, which harms the surrounding air quality substantially.

Given its favourable properties of having very low moisture content with moderate-to-high calorific value, sugarcane trash could be used in most of the high pressure boiler designs in a considerable proportion along with bagasse.

cane-trash

Undeniably, sugar mills should not discontinue using bagasse as the primary fuel, but surely complement it with sugarcane trash as it would lead to an increase in their revenue generation and would also allow them to expand operations of their cogeneration plant to off-season, as using sugarcane trash with bagasse in season would leave more bagasse for off-season usage.

Hurdles to Overcome

Despite these evident benefits, the major obstacle in development of sugarcane trash as an industrial boiler fuel has been its difficult collection from thousands of small and fragmented farms. Moreover, the trash becomes available and needs to be collected simultaneously during the operating season of the sugar mills, which makes deployment of resources, human or otherwise, for managing the procurement of trash very difficult for any sugar mill.

As a matter of fact, the sugar mills which initiated the pilots, or even scaled commercially, to utilise sugarcane trash along with bagasse, had to sooner or later discontinue its use, owing to the mammoth challenges discussed above.

The Way Forward

Thus, in order to utilise this wonder waste, there is a dire need to outsource its procurement to professional and organised players which establish the biomass supply chain infrastructure in the vicinity of the cogeneration units to make on-site availability of sugarcane trash as convenient as bagasse and enable them to procure the rich quality biomass at sustainable prices which leads to an increase in their profits.

sugarcane-trash-burning

Burning of cane trash creates pollution in sugar-producing countries

These biomass supply chain companies offer value to the farmers by processing their crop residues in timely manner, thus prevent open burning of the crop residue and contribute to a greener and cleaner environment.

Indeed, owing to its favourable fuel properties, positive environmental impact and now, with ease in its procurement, sugarcane trash is the renewable fuel of today and future for the Indian sugar mills.

Everything You Should Know About Biomass Logistics

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Biomass logistics include all the unit operations necessary to move biomass feedstock from the land to the biomass energy plant and to ensure that the delivered feedstock meets the specifications of the conversion process. The packaged biomass can be transported directly from farm or from stacks next to the farm to the processing plant.

Biomass may be minimally processed (i.e. ground) before being shipped to the plant, as in case of biomass supply from the stacks. Generally the biomass is trucked directly from farm to biomass energy plant if no processing is involved.

Another option is to transfer the biomass to a central location where the material is accumulated and subsequently dispatched to the energy conversion facility. While in depot, the biomass could be pre-processed minimally (ground) or extensively (pelletized). The depot also provides an opportunity to interface with rail transport if that is an available option.

The choice of any of the options depends on the economics and cultural practices. For example in irrigated areas, there is always space on the farm (corner of the land) where quantities of biomass can be stacked. The key components to reduce costs in harvesting, collecting and transportation of biomass can be summarized as:

  • Reduce the number of passes through the field by amalgamating collection operations.
  • Increase the bulk density of biomass
  • Work with minimal moisture content.
  • Granulation/pelletization is the best option, though the existing technology is expensive.
  • Trucking seems to be the most common mode of biomass transportation option but rail and pipeline may become attractive once the capital costs for these transport modes are reduced.

The logistics of transporting, handling and storing the bulky and variable biomass material for delivery to the bioenergy processing plant is a key part of the biomass supply chain that is often overlooked by project developers. Whether the biomass comes from forest residues on hill country, straw residues from cereal crops grown on arable land, or the non-edible components of small scale, subsistence farming systems, the relative cost of collection will be considerable.

Careful development of a system to minimize machinery use, human effort and energy inputs can have a considerable impact on the cost of the biomass as delivered to the processing plant gate.

The logistics of supplying a biomass power plant with sufficient volumes of biomass from a number of sources at suitable quality specifications and possibly all year round, are complex. Agricultural residues can be stored on the farm until needed. Then they can be collected and delivered directly to the conversion plant on demand. Infact, this requires considerable logistics to ensure only a few days of supply are available on-site but that the risk of non-supply at any time is low.

Issues Confronting Biomass Energy Ventures

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Biomass resources can be transformed into clean energy and/or fuels by thermal and biochemical technologies. Besides recovery of substantial energy, these technologies can lead to a substantial reduction in the overall waste quantities requiring final disposal.

Biomass_Cogeneration

However, biomass energy projects worldwide are often hampered by a variety of techno-commercial issues. The issues enumerated below are not geography-specific and are usually a matter of concern for project developers, entrepreneurs and technology companies:

Large Project Costs

In India, a 1 MW gasification plant usually costs about USD 1-1.5 million. A combustion-based 1 MW plant would need a little more expenditure, to the tune of USD 1-2 million. An anaerobic digestion-based plant of the same capacity, on the other hand, could range anywhere upwards USD 3 million. Such high capital costs prove to be a big hurdle for any entrepreneur or renewable energy enthusiast to come forward and invest into these technologies.

Low Conversion Efficiencies

In general, efficiencies of combustion-based systems are in the range of 20-25% and gasification-based systems are considered even poorer, with their efficiencies being in the range of a measly 10-15%. The biomass resources themselves are low in energy density, and such poor system efficiencies could add a double blow to the entire project.

Dearth of Mature Technologies

Poor efficiencies call for a larger quantum of resources needed to generate a unit amount of energy. Owing to this reason, investors and project developers find it hard to go for such plants on a larger scale. Moreover, the availability of only a few reliable technology and operation & maintenance service providers makes these technologies further undesirable.

Gasification technology is still limited to scales lesser than 1 MW in most parts of the world. Combustion-based systems have although gone upwards of 1 MW, a lot many are now facing hurdles because of factors like unreliable resource chain, grid availability, and many others.

Lack of Funding Options

Financing agencies usually give a tough time to biomass project developers as compared to what it takes to invest in other renewable energy technologies.

Non-Transparent Trade Markets

Usually, the biomass energy resources are obtained through forests, farms, industries, animal farms etc. There is no standard pricing mechanism for such resources and these usually vary from vendor to vendor, even with the same resource in consideration.

High Risks / Low Pay-Backs

Biomass energy projects are not much sought-after owing to high project risks which could entail from failed crops, natural disasters, local disturbances, etc.

Resource Price Escalation

Unrealistic fuel price escalation too is a major cause of worry for the plant owners. Usually, an escalation of 3-5% is considered while carrying out the project’s financial modelling. However, it has been observed that in some cases, the rise has been as staggering as 15-20% per annum, forcing the plants to shut down.