Tag Archives: Project Costs

Major Issues in Biomass Energy Projects

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Bioenergy projects are plagued by several problems. This article makes an attempt at collating some of the most prominent issues associated with biomass technologies and provides plausible solutions in order to seek further promotion of biomass energy technologies. The solutions provided below are based on author’s understanding and experience in this field.

Here are the top issues in biomass energy projects around the world:

Biomass Supply Chain

1. Large Project Costs

The project costs are to a great extent comparable to these technologies which actually justify the cause. Also, people tend to ignore the fact, that most of these plants, if run at maximum capacity could generate a Plant Load Factor (PLF) of 80% and above. This figure is about 2-3 times higher than what its counterparts wind and solar energy based power plants could provide. This however, comes at a cost – higher operational costs.

2. Lower Efficiency of Biomass Technologies

The solution to this problem, calls for innovativeness in the employment of these technologies. To give an example, one of the paper mill owners in India, had a brilliant idea to utilize his industrial waste to generate power and recover the waste heat to produce steam for his boilers. The power generated was way more than he required for captive utilization. With the rest, he melts scrap metal in an arc and generates additional revenue by selling it.

biomass gasifier

Although such solutions are not possible in each case, one needs to possess the acumen to look around and innovate – the best means to improve the productivity with regards to these technologies.

3. Immature Technologies

One needs to look beyond what is directly visible. There is a humongous scope of employment of these biomass technologies for decentralized power generation. With regards to scale, few companies have already begun conceptualizing ultra-mega scale power plants based on biomass resources. Power developers and critics need to take a leaf out of these experiences.

4. Lack of Funding Options

The most essential aspect of any biomass energy project is the resource assessment. Investors if approached with a reliable resource assessment report could help regain their interest in such projects. Moreover, the project developers also need to look into community based ownership models, which have proven to be a great success, especially in rural areas.

The project developer needs to not only assess the resource availability but also its alternative utilization means. It has been observed that if a project is designed by considering only 10-12% of the actual biomass to be available for power generation, it sustains without any hurdles.

Also Read: Ways to Fundraise for a Biomass Energy Project

5. Non-Transparent Trade Markets

Most countries still lack a common platform to the buyers and sellers of biomass resources. As a result of this, their price varies from vendor to vendor even when considering the same feedstock. Entrepreneurs need to come forward and look forward to exploiting this opportunity, which could not only bridge the big missing link in the resource supply chain but also could transform into a multi-billion dollar opportunity.

6. High Risks / Low Paybacks

Biomass energy plants are plagued by numerous uncertainties including fuel price escalation and unreliable biomass resource supply to name just a few. Project owners should consider other opportunities to increase their profit margins. One of these could very well include tying up with the power exchanges as is the case in India, which could offer better prices for the power that is sold at peak hour slots.

The developer may also consider the option of merchant sale to agencies which are either in need of a consistent power supply and are presently relying on expensive back-up means (oil/coal) or are looking forward to purchase “green power” to cater to their Corporate Social Responsibility (CSR) initiatives.

7. Resource Price Escalation

A study of some of the successful biomass energy plants globally would result in the conclusion of the inevitability of having own biomass resource base to cater to the plant requirements. This could be through captive forestry or energy plantations at waste lands or fallow lands surrounding the plant site. Although, this could escalate the initial project costs, it would prove to be a great cushion to the plants operational costs in the longer run.

biomass resource

In cases where it is not possible to go for such an alternative, one must seek case-specific biomass procurement models, consider help from local NGOs, civic bodies etc. and go for long-term contracts with the resource providers.

How to Keep Sustainable Installation Projects From Running Over Budget

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Costs can spiral in any sustainable installation scenario if you aren’t on the ball from the very beginning. The key is to plan properly, and have tools on hand to help everything run smoothly.

With that in mind, here are some pieces of advice to follow that will avoid budget overruns in your own projects going forward.

ways to avoid budget overruns in sustainable projects

Use ERP Software to Keep Everything Under Control

First and foremost, it’s worth pointing out that using an ERP (Enterprise Resource Planning) software package is the best way to ensure that everything runs smoothly and stays under control.

This type of system allows companies to organize all their data in one place, including financials, inventory management, human resources information, and more.

It also helps them track project costs by providing real-time visibility into labor hours and materials used. With this tool at hand, it’s easier than ever before for businesses to make informed decisions about how much money they should allocate towards each job—and stay within their allotted budget.

It’s worth exploring ERP solutions for your organizations like opusflow.io, as this is a growing market with plenty of competing platforms to consider.

Identify the Necessary Steps and Create a Plan of Action

You need to know what steps are involved in each project, and plan how you’ll tackle them, before you can get a precise idea of costs, and make realistic estimates for your budget.

Starting off with an accurate assessment of project scope, timeline and cost estimates can help ensure that each step is properly planned out ahead of time.

Additionally, it’s important to have regular updates throughout the process so that nothing falls through the cracks or gets missed along the way.

Also, having specific milestones in place gives companies something tangible they can track their progress against—helping them stay within their allotted budget at all times, and identifying issues ASAP so that evasive measures can be implemented.

Monitor Your Spending Regularly

Speaking of pinpointing problems so that they can be minimized immediately rather than left unaddressed, frequent monitoring of project spending is a must in this context.

Make sure that all expenses are tracked accurately and in real-time, and don’t delay in acting when inconsistencies or imperfections become apparent. The sooner you swoop in to fix things, the less chance there is of spending running out of control.

As part of this, it’s important to have access to detailed financial reports on demand which give an overview of the project budget. The aforementioned software solutions should serve you well in this regard.

How to maximize solar energy in your home

Take Advantage of Cost Saving Opportunities Whenever Possible

Part of the role of sustainable installation projects is to be eco-friendly and efficient in their own right. This means making sure to avoid any kind of waste when budgeting, which is only achievable if you are looking for places where savings are available.

For instance, companies can take advantage of bulk discounts when ordering materials, or negotiate better payment terms with their suppliers.

Then there’s the opportunity to harness energy efficient solutions and renewable sources to power the moving parts of a project. If you can set up solar panels on-site, your energy costs can be driven down, for example.

The Bottom Line

Keeping sustainable installation projects from running over budget isn’t just about dealing with one issue, but several.

You have to be realistic about what your spend might be, plan out how you’ll stick within the allotted budget, and watch every penny as progress is made. This is the best way to avert disaster and keep clients happy.