China Holdings to build second 50MW biomass co-generation plant in Anhui

Biomass is rapidly becoming the preferred clean alternative to polluting coal in the country most dependent on the most climate destructive fossil fuel: China. One of the major green energy companies active in the sector is China Holdings, Inc., which announces it has executed its second development contract to build a 50MW biomass co-generation plant through its subsidiary China Power, Inc. The contract was signed with the local government of Anhui Province in the east of the country. The project is part of China's ambition to have 30GW of bioenergy capacity by 2020, making it the second-largest renewable after hydropower (previous post).

China Power, whose main competitors are Dragon Power, China Enersave and the National Bio Energy Company, now has 100 MW of biomass energy in the pipeline. It has acquired all the resources needed to construct and operate the plant, feedstock handling facilities, water supplies, the plant, 215 Mu (1 MU = 667 sq. meters) of land and biomass supplies from local agriculture.

The company will utilize a CAPS-II pyrolysis system to gasify and pyrolyse the biomass efficiently and with low emissions. It takes a modular design philosophy, maximizing the flexibility of the plant's possible expansion and adaptation to new requirements.

The biomass to electricity system is a two-stage process. In a first phase biomass is dried, pyrolysed, gasified with the combustible materials partially burned. The combustible gas plus a majority of the entrained combustible particles is then consumed in a combustion chamber which releases the thermal energy which is converted into electricity. The advantage of the two stage processing is that it burns the biomass in a clean manner under a controlled processing temperature. The process of trransforming solid biomass fuel at lower temperatures in the gasification chamber means that slagging of residual ash is eliminated.

The by-products from the process, the heat energy and ash, can be utilized to supply heat for households and industry, and fertilizer, thereby eliminating the need for the production of these products in an environmentally harmful manner.

China Power's biomass to electricity technology can be further described in twelve steps from collection, to combustion, to the production of electricity:

1. The biomass fuel is collected in site and packed as bales. Biomass fuels are corn stalk, rice straw, cotton stalk, branches and other biomass by-products and waste material.
2. The feedstock is then stored in the storage yard and delivered to the biomass power plant.
3. Next, the biomass fuel is weighed and taken to the storage area.
4. The feedstock is then taken by the preloading system from the storage area to the loading hopper.
5. The hydraulic charging ram puts the biomass fuel from the loading hopper to the gasification chamber, where the biomass fuel is dried, heated, pyrolysed and partially oxidized. This releases moisture, combustible gas and volatile components.
6. The residual ash is discharged from the gasification chamber by the ash removal system.
7. The collected ash is taken for further processing into fertilizer or other products.
8. The combustible gas and volatile components is then transferred to the combustion chamber where it is further oxidized and releases energy.
9. The energy released during this process heats the water/steam in the boiler to produce superheated steam.
10. The superheated steam drives the steam turbine and generator producing electricity.
11. The electricity is delivered into the power grid through a substation.
12. The gas flows into the emission control system that includes a spray tower, bag filters, exhaust fans, and stack. The gas is treated to remove acid gas and particles to meet environmental requirements.
    

The 50MW biomass project has a total expected annual power generating capacity of 400 million kilowatt hours (kWh), expected annual revenues of approximately 250 million Yuan (e22.9/$33.6 million), and an expected annual net income (45% of revenue) of approximately 112.5 million Yuan based on 8,000 annual operation hours:
energy :: sustainability :: bioenergy :: biomass :: straw :: residues :: co-generation :: climate change :: coal :: China ::

The electricity sale price is 0.60 Yuan/kWh (approximately €0.054/$0.080/kWh) with a government policy stipulating a guaranteed purchase of the electricity obtained from bioenergy.

The total investment for this Biomass Renewable Energy Project (Power Capacity: 50 MW) is also approximately 580 million Yuan (€53.2/$77.9): 35% in cash investment and 65% will be China-based bank loans with preferred interest rates with government policy protection for the project.

The power plant is expected to be in full production in approximately 2 years.

The company's biomass to electricity technology is based upon processing biomass fuel like corn stalk, rice straw, cotton stalk, branches and other biomass by-products and waste material in two stages at temperatures sufficient to produce steam-generated electricity. Biomass is solar energy settled on Earth through photosynthesis of plants. Most forms of photosynthesis release oxygen as a by-product.

There are 170 billions tons of biomass produced on Earth, as the fourth biggest energy resource on the earth after coal, oil and natural gas, but only less than 1% of biomass is currently used as an energy resource, and most of this application is located in rural areas with lower than 10% of energy efficiency and high indoor pollution.

A large part of China's biomass resource is currently burned by farmers, out in the open on their fields, resulting in a major air pollution problem

China Holdings sketches the Chinese policy context within which its projects are positioned as follows:

Renewability: Straw is renewable energy and is a part of nature's plants. The carbon on the inside of the straw can change to organic carbon through absorption of carbon dioxide (CO2) from the atmosphere during photosynthesis. The biomass energy project, as an alternative and renewable energy source, is fully supported by the central government and local governments of China. The development and construction of the renewable energy project is protected by The Renewable Energy Law, created on January 1, 2006 by the People Congress of China. The Chinese central government has set a series of tax exemption/deduction regulations to encourage the construction of renewable energy projects. The National Reform and Development Committee implements the purchase electricity price for renewable energy. It ensures the standard purchase electricity price is 0.25 Yuan/kWh addition base on the local average grid connection price (0.25-0.44 Yuan/kWh). In addition, there is a supervision system to ensure full purchase and payment.

Environmental Benefits: official statistical information from the Ministry of Agriculture in May 2005 shows that the annual production of straw in China is about 650 million tons. Studies done by international energy organizations show that crop straw is a type of clean renewable energy resource. Normally the heating value of crop straw is about 15MJ/kg. Crop straw is the fourth energy resource after coal, petroleum and natural gas. Many developed countries have already used straw as raw material to generate energy. Each year China produces about 650 million tons of crop straw, which has the same energy content as 268 million tons of regular coal, about 13.7% of China coal production in 2004. By the year 2010, China will have had discarded 350-370 million tons of straw. If used to generate electrical power, it is equivalent to a 90 million KW generator running 5000 hours per year and generating 450,000 million kWh of electricity. This in return will gear the development of a greener economy and the greater sustainable economic development of China.

Economic Benefits: take 1040TPD as a sample, the average annual electricity sales revenue of a STE project is 232 million Yuan RMB, the average annual net profit is 100 million Yuan RMB, and the average net profit rate is 43%. The economic benefit is very profound. In addition, based on the most updated data from the China CDM Information Centre, the guiding price of CO2 is 51.21 RMB/ton. Recently, considering that 0.95kg of CO2 will be discharged when 1 kWh of electrical power is generated by using mineral fuel, each 4X260TPD STE plant is estimated to have 3.31 million tons of CO2 reductions during its 10 years CO2 reduction salable operation. With a price of 51.21 RMB/ton, the 1040TPD project can have an additional income of about 170 million RMB, which is 17 million RMB per year. For the 780TPD project, the CO2 reduction is 2.48 million tons over 10 years. With a price of 51.21 RMB/ton, there will be 127 million RMB in income, which is 12.7 million RMB per year. According to China Energy Research Institute's 2006 update report, China's Biomass Energy implementation and development has reached its power capacity for 2GW in 2005. China Biomass Energy Capacity will reach a total of 5GW in 2010, and 30 GW in 2020.

References:
China Holdings: China Holdings, Inc. Announces 2nd Biomass Renewable Energy Project (Power Capacity: 50 MW); Total Potential: 100 MW in Biomass Energy Pipeline - November 5, 2007.

Biopact: China unveils $265 billion renewable energy plan, aims for 15% renewables by 2020 - September 06, 2007

Biopact: Expert: China's biomass power plants to be profitable in three years - October 30, 2007

Biopact: A closer look at China's biomass power plants - April 19, 2007

Biopact: China's Dragon Power to raise US$2 billion for 100 biomass power plants - August 07, 2007

Biopact: China EnerSave retrofits coal plants to burn biomass - June 18, 2007