(Nomination for 2011 AUREA Award): Energoobnova - Biomass power plant

Energoobnova is the first company to open a mini biomass steam power plant in Serbia, in the village of Dragacica near Cacak, in which it invested about EUR 200,000. A digester with the annual capacity of 6,000 kWh and the nominal power of 75 kW/h uses corn silage as fuel.

This power plant consumes about 1.5 tons of corn silage a year. In addition to the primary output of the system, the power plant also produces 400,000 liters of soil for flowers and about 1,000,000 liters of liquid for fertilizing cultivated fields as by-products. The complex comprises a storage space, a biogas production unit and an electric power production unit, and has no harmful characteristics.

The price of biomass is EUR 252 per ton of silage on the scale. Agricultural manufacturers can earn EUR 1,200 per hectare of corn silage in that way. Since the vegetation period is short, it is possible to sow twice a year, first corn and then field pea or barley, both of which can be used for biomass.

INNOVATION

The innovation of this mini steam power plant lies in using biomass (corn grass silage, dairy waste) in the production of biogas, and later electric and heating energy, for the first time in Serbia. So far, this biological waste has only been polluting the environment, while silage has been used as food for cattle.

Small agricultural manufacturers have practically had no use for silage. The innovative approach to planning and construction of such small plant opens a possibility to have one or several such plants built in every village in Serbia.

Small agricultural manufacturers thus become electric power producers, while manure, grass, corn silage and household waste become raw materials for a highly profitable product – electric power, costing EUR 16 per kWh.

Also, this project offers a solution to the problem of use of manure, grass waste (weed) and food production waste, while no CO2 is emmitted in the process. The culture of work with biomass is created, as well as an opportunity for improvement of villages in central Serbia.

Description of the power plant

The power plant is a technologically very simple solution: the complex comprises a storage space, a biogas production unit and an electric power production unit. The temperature of exhaust gases is about 500 degrees, which can be used, by means of a simple hot water pipeline system, for heating the ethno-village that the company’s owner builds about hundred meters away from the power plant. According to the technology, the period of 120 days needs to pass between the first charging and the production of the first electric power. All gas produced at that plant is intended for consumption, while the gas engine is made by Scania.

Description of work of the steam power plant

The process of anaerobic fermentation of herbs or other organic matters starts by adding bacteria carriers to water, thus creating a bacterial nucleus. Water must be heated to the temperature of 38 degrees Centigrade because the bacteria die at a lower temperature. The process of anaerobic fermentation in the steam power plant's mash tub is identical to the process that takes place in the rumen (part of stomach) of a cow. That is, actually, degradation of dry mass, and the process utilizes the same bacteria. They are obtained from the ground rumens of cattle. The bacteria are pumped into a pool with water within the plant where they start multiplying at the temperature of 38 degrees Centigrade. There is no possibility that the system be entered by other bacteria because only anaerobic bacteria can survive in these strictly controlled conditions (since there is no oxygen) and aerobic bacteria die as soon as they enter the mash tub. Then the selection of the bacterial nucleus is done, with the help of certain acidity, that is, pH value setting, in accordance with the required anaerobic bacteria, and the chemical process eliminates all those unnecessary bacteria. The mash tub is watertight and closed with a rubber membrane, and food is then pumped into the water. When the bacteria break down to the required level, food is pumped in and the bacteria start producing methane within 40 days. Once the required quantity of methane is produced, a motor generator is connected to the system. It works as a motor powered by natural gas, but there are no harmful matters in its exhaust gases. The motor actually produces steam and carbon dioxide, which is not a consequence of the newly created value, but a transformation from the plant.

The capacity of use of the motor when producing electric power is about 32-33%, but one of the products is heating energy and the temperature of exhaust gases at the exhaust pipe amounts to about 500 degrees Centigrade. These hot exhaust gases are then used to heat greenhouses and the ethno-village.

Silage is more effective in the production of electricity at a biomass power plant because one ton of manure produces 40 cubic meters of gas, while one ton of silage produces 200 cubic meters of gas.

SOCIAL UTILITY

This mini steam power plant is opened in a small community (the village of Goracici near Guca), which has significantly contributed to development of the village that was slowly “dying”. The project has a useful ecological character because it protects the environment from further pollution, while being maximally in accordance with the guidelines of the Kyoto Protocol.

Renewable resources (grass, corn silage, manure, whey) are becoming a significant power resource in the first phase on the way to creation of an energy independent village. This solution opens a possibility for the principle “one village – one power plant”.

The project sets a valuable example for other small agricultural manufacturers to follow.

The project raises awareness of the need for use of renewable energy sources.

Many future owners of such plants will be learning from the example of the first biomass power plant since the formation of a school of biotechnology (renewable energy sources) is in the pipeline.

FINANCIAL POTENTIAL

About EUR 200,000 were invested in construction of the power plant, 25,000 of which were provided from the loan granted by the Development Fund, while the rest of the costs were covered by investors themselves. According to the information available to the company Energoobnova, the price of such facility in the global market ranges between 660,000 and 1 million euros.

The project envisages that biomass collected from 30 ha of cultivated land is sufficient for the power plant to stay in operation for one year. The annual profit of this power plant would, with maximally reduced revenues and increased expenditures, amount to EUR 80,000, which is the profit of EUR 2,700 per hectare of cultivated land. That is something rarely or never seen in Serbia to date.

Electric power is purchased at the price of 0.16 EUR per 1 kWh pursuant to law and the 12-year agreement. Heating power is used for heating the company’s ethno-village, greenhouses and fruit dryers. Solid and liquid manure, a by-product, is used as a high-quality organic fertilizer in the organic production of food, thus reducing the need for NPK fertilizers.

An additional advantage is the fact that such small plants can be built at a significantly smaller price than competitive plants with similar technical characteristics.

Feed-in Law

By adopting the Feed-in Law, the state is obliged to purchase alternative energy prior to 2012. The state pays 1 kWh 0.16 euros. Energoobnova’s mini power plant can produce 6,000 kWh in one year so that the projected annual revenue from electricity amounts to EUR 96,000. Germany has about 6,000 such power plants, Austria has about 1,200, while about 200 such plants are situated in Hungary. Serbia has the potential of about 12.5m tons of biomass, mainly in agriculture. By the end of 2012, 7.7 percent more electric energy is planned to be produced in this way, which would be enough for about 175,000 households.

Biomass

The price of biomass is EUR 252 per ton of silage on the scale. Agricultural manufacturers can earn EUR 1,200 per hectare of corn silage in that way. Since the vegetation period is short, it is possible to sow twice a year, first corn and then field pea or barley, both of which can be used for biomass.

After building the first biomass steam power plant in Serbia, Energoobnova also plans to initiate construction of such facilities all around the country and, in that way, prepares “turn key“ projects for all interested investors.

For the construction of mini steam power plants similar to the one in Dragacica, it is necessary that each investor provides the following:

Location

- 50 ares of land,

- Access roads,

- 2,000 liters of water per day,

- Substation and 100 kW long-distance power line not more than 300 meters away

- Telephone connection or mobile network coverage

Buildings

For the production of electric energy at a 70 kWh biogas power plant, the following buildings are necessary:

Concrete storage tank that is big enough for the amount of silage required for one-year work of the power plant whose dimensions are 50x12x3 m.

Concrete digester: radius - 12 m, height - 5 m

Concrete storage tank for ready-made substrate (future new digester for doubling the capacity): radius – 12 m, height - 5 m.

Room with shelves and 50 square meter room for the generator

Equipment- Pursuant to the regulations of the electric power industry of Serbia, mini biogas power plants have the following equipment:

Standard digester equipment

Accompanying manipulation equipment

Scale with the capacity of up to 10 tons (optional)

Tractor with a loading bucket on the front

For all buildings and required equipment, necessary documentation, construction of facilities and delivery of necessary equipment for a 70 kWh biogas power plant, Energoobnova DOO Belgrade offers EUR 200,000 for “turn key“ projects. The warranty period for the built-in equipment is 2 years from the day of handover of the plant to the investor.

The minimum life of equipment is 30 years.

Raw materials

All raw materials required for the work of a biogas power plant are provided from domestic sources, that is, direct surroundings of the plant. What is necessary for the continuous work of the power plant is about 30 hectares of land, which is owned either by the investor or by other owners with whom agreements on production and delivery of raw materials are signed.

It is necessary to provide the minimum annual yield of 50 tons of green mass on each hectare of land, that is, 1,500 tons of green mass in total.

- Annual yield per hectare of corn amounts to 50-70 tons of green mass

- Annual yield per hectare of field pea-barley combination amounts to 30-60 tons of green mass if this crop is grown after corn.

- Annual yield per hectare of Sudan grass amounts to 80 tons of green mass with three harvests a year.

The planned input price of raw materials ensures much higher profit for manufacturers-collaborators than growing of any other plants or crops on that land.

Sales market analysis

The primary product of a biogas power plant is electric energy.

A 70 kWh power plant annually produces 560,000 kW of electric energy. Since the price of 1 kW amounts to EUR 0.16, pursuant to the government’s regulations, the plant annually produces EUR 89,600 worth of electric energy. Aforementioned regulations also guarantee the sales market for the next 12 years so that the manufacturers of electricity from renewable sources should not experience any problem in that regard.

By-products

In addition to the primary product – electric energy, mini steam power plants also have by-products, which are:

Heating energy

Humus – silage residues

Liquid manure.

Each of these by-products provides additional revenues for the power plant owner:

- The amount of heating energy, a by-product of the process of electric energy production, is 30% bigger than the amount of electric energy. About 30% of that heating energy is used in the digester’s production process, while the rest - about 50 kWh, is used by the power plant owner or other users for heating apartments, production halls, greenhouses or water in swimming pools. In that way, a revenue in minimum amount of EUR 10,000 is provided.

- Humus is a by-product of silage. About 400,000 liters of humus is produced every year. There is a demand for humus in the country and it is usually imported for the needs of truck farmers and florists who grow plants and flowers in greenhouses.

The price of imported humus amounts to EUR 0.21 per liter. Humus produced in this way can be sold at the price of EUR 0.05 per liter, meaning that the power plant owner’s annual revenue from humus amounts to (400,000 liters x EUR 0.05 =) EUR 20,000.

- Liquid manure is a by-product of this process and a total of 600,000 liters of that manure is produced ever year. It is used as a substitute for artificial fertilizer on cultivated fields where silage is produced. This way of land fertilization can make it possible for the owner to become a certified organic food manufacturer, which is going to be very important in the future.

The value of liquid manure is minimum EUR 10,000 per year.

Work organization and required staff

Work organization at such plants is very simple because the electric energy production is completely automated. For the work of such power plants, only one worker with secondary school qualifications is required to fill the concrete digester once a day and do other necessary things.

The gross salary with all taxes for one such worker will be EUR 1,000 per month, that is, EUR 12,000 a year.

All other costs – telephone and water bills and other administrative costs – amount to EUR 500 per month, that is, EUR 6,000 per year.

Revenues and expenditures

Based on all the data mentioned above, the lists of annual revenues and expenditures look as follows:

Revenues

- Electric energy – EUR 89,600

- Heating energy – EUR 10,000

- Humus – EUR 20,000

- Liquid manure – EUR 10,000

Total revenues: EUR 129,000

Expenditures

- Raw materials – EUR 37,500

- Worker’s salary – EUR 12,000

- Other costs – EUR 6,000

Total expenditures - EUR 55,500

Profit

-Gross profit – EUR 73,500

-Tax on profit (10%) – EUR 7,350

NET PROFIT – EUR 66,150

If all the business is done within a household, the profit is much bigger - EUR 90,000 per year.

Sources of finance and required financial means

It is hard to give some concrete estimates of required financial means because each investor provides them from different sources of finance: his own funds, domestic or foreign loans, etc.

For this investment, the required following funds are as follows:

- Buildings and equipment – EUR 200,000

- Costs of procurement of raw materials – EUR 37,500

- TOTAL: EUR 237,500

If we assume that the whole amount of funds are provided from a loan wit the annual interest rate of 5%, this investment can be returned within the period of less than 5 years.

If Biomass power plant is your favorite for the innovative investment of the year, you can cast a vote for this nominee on the official website Aurea 2011.

Energoobnova d.o.o. Beograd

eKapija.com Beograd

Vlada Republike Srbije