Implemented by: Förderung von Biogasprojekten in Serbien und Vorstellung des GIZ-Programms zur Entwicklung eines nachhaltigen Bioenergiemarktes DKTI - Development of a Sustainable Bioenergy Market in Serbia Local subsidies / RDA Zlatibor / Center for Development Leskovac Seite 1
Structure 1. About the GIZ DKTI Programme 2. Biomass Potentials in Serbia 3. Framework Conditions for Biogas and Biomass 4. Modell-Case for Manure Biogas Plants in Serbia 5. Opportunities for Biomass-ESCO Investments in Serbia Seite 2
Implemented by : Facts about the GIZ DKTI programme Objective: To strengthen capacities and create an enabling environment for sustainable use of bioenergy in Serbia Funded by: German Federal Ministry for Economic Cooperation and Development (BMZ) under the German Climate Technology Initiative (DKTI) Duration: March 2013 December 2017 Political partners: Ministry of Agriculture and Environmental Protection & Ministry of Mining and Energy Seite 3
Structure of the programme: Policy advice Biomass supply Eff. firewood use in HH Project development BioRES GIZ: Support to harmonization of laws and regulations to EU standards KfW: Advise to investments in district heating companies. GIZ: Support to a promotion of efficient stoves and ovens / firewood drying GIZ: Advise to the implementation of cost efficient and innovative bioenergy projects GIZ: Support to the creation of regional Biomass Trade and Logistic centres. Support to policy definition and strategy implementation GIZ: Support to the creation of a sustainable supply with bioresources Advise to implement efficiency- and emission standards Technology and knowlege transfer Support local supply chains for biomass. Cross-cutting theme: Sustainability Seite 4
Implemented by : Objective: Innovative bioenergy projects are implemented Activities: Identification of projects and potential investors for bioenergy heating systems in public buildings, biogas facilities, facilities for generation of industrial process heat Consultancy for plant design and project concepts, elaboration of bankable (pre-) feasibility studies, project documentation, etc. Support/Intermediation of financial opportunities and investment subsidies Logistical concepts for biomass Component Project development Technical support for permit application and support to increase the efficiency of processes related to procurement procedure, permits and licensing agreements for bioenergy projects Best-practice documentation and capacity building Dialogue-platform for Serbian and international companies and institutional stakeholders to exchange project ideas, information and experiences Seite 5
Biogas potential from manure in Serbia Liquid cattle manure, Serbia - Foto: GIZ 2014 Liquid pig manure, Serbia - Foto: GIZ 2014 Type of Biomass Theoretica l potential in PJ in Serbia Electrical efficiency in % Potential electrical energy in GWh/a Potential electrical capacity in MW Incl. energy crops, and agroindustrial waste: Manure (cattle, pig and poultry)e 3.4 34 322.2 45 175 MWel Solid cattle manure, Serbia - Foto: GIZ 2014 Velvet Farm plant, Curug, Serbia - Foto: GIZ 2014 Source: DBFZ Study 2015 Seite 6
Feed-in Tariffs for Biomass and Biogas in Serbia (based on proposal for 2016) Type of Electrical Generation Biomass power plant up to 1 MWel Biomass power plant 1-10 MWel Biomass power plant 10 MWel Biogas power plant up to 2 MWel Biogas power plant 2-5 MWel Biogas power plant over 5 MWel Feed-inTariff 13,26 Ct./kWh 13,82-0,56 x Pel Ct./kWh 8,22 Ct/kWh 18,333 1,111 x Pel Ct./kWh 16,852 0,370 x Pel Ct./kWh 15 Ct/kWh Source: http://www.mre.gov.rs/doc/javne%20rasprave/28.09/objedinjeno%20uredba%20o%20podsticajnim%20merama%202015%20098%2014a.pdf Annual increasing rate = inflation rate of EURO zone Corn Silage input = max. 40 % of overall dry matter content Duration of power purchase agreement (PPA)= 12 years No custom payment for importing biogas technology Seite 7
Fuel prices for heating in Serbia 2014 FUELS Heat Values Price per Unit (net) Calorific Price Boiler Efficiency Heat Price Agro Pellets 3.9 kwh/kg 100 /t 26 /MWh 85% 30.2 /MWh Brown coal 4.5 kwh/kg 100 /t 22 /MWh 75% 29.6 /MWh Electricity 1.0 kwh/kwh 60 /MWhel 60 /MWh 85% 70.6 /MWh Light Oil 12.6 kwh/kg 1.05 /l 98 /MWh 85% 115.3 /MWh LPG 12.9 kwh/kg 1.00 /kg 78 /MWh 90% 86.3 /MWh Heavy Fuel Oil (Mazut) 11.2 kwh/kg 550 /t 49 /MWh 80% 61.3 /MWh Natural gas 10.0 kwh/m³ 0.41 /m³ 41 /MWh 95% 43.2 /MWh Wood Pellets 4.7 kwh/kg 160 /t 34 /MWh 90% 37.8 /MWh Woodchips (moisture 35 %) 3.1 kwh/kg 55 /t 18 /MWh 85% 20.9 /MWh Straw in Bales 3.9 kwh/kg 45 /t 12 /MWh 80% 14.4 /MWh Firewood (moisture 45%) 2.5 kwh/kg 60 /t 24 /MWh 65% 36.9 /MWh Current fuel prices for heating in Serbia without VAT Source: GIZ study and calculation Prices can differ depending on location, quality and quantity Seite 8
Project proposal medium-sized farm 50 kwel biogas plant in Serbia Initial values: Following scenario are evaluated: Institute for Animal Husbandry, Serbia - Foto: GIZ 2015 1. Digestion of available liquid pig manure for electricity generation of 50 kw el 2. Digestion of available liquid and solid cattle manure for electricity generation of 50 kw el 100 % of electricity generated will be sold to the grid under current feed-intariffs, 30 % of heat generated will be used for internal heating purposes (30 /MWh -> comparable to current coal price) Seite 9
Project proposal 50 kwel biogas plant in Serbia: Manure input required quantity and quality Biogas production of substrates Substrates Fresh Material DMS odms Production of CH4 Production of biogas t/a m³/d % FM % DMS % m³/year l/kg odms m³/year Liquid Pork manure 31,928 87 2.0% 75% 60% 120,687 420.0 201,145 total 31,928 87 120,687 201,145 or Biogas production of substrates Substrates Fresh Material DMS odms Production of CH4 Production of biogas t/a m³/d % FM % DMS % m³/year l/kg odms m³/year Liquid Pork manure 9,122 25 7.0% 75% 60% 120,687 420.0 201,145 total 9,122 25 120,687 201,145 Biogas production of substrates Substrates Fresh Material DMS odms Production of CH4 Production of biogas or t/a m³/d % FM % DMS % m³/year l/kg odms m³/year Liquid cattle manure 9,445 26 7.0% 75% 55% 95,458.15 350.0 173,560 Solid cattle manure 730 2 18.0% 80% 60% 25,229 400.0 42,048 total 10,175 28 120,687 215,608 Pig farm of around 4.000 animal units (fatteners) or cattle farm around 500 animal units can provide needed amount for the proposed plant size Different farm structures: design, feeding, age and animal type Analysis of organic dry matter content and real quantity values necessary for each individual farm and project Cattle Farm in Serbia, Foto: GIZ 2015 Seite 10
Output 50 kwel Biogas plant Energy Use Production of CH4 120,687 m³/a Caloric Value CH4 9.968 kwh/m³ Losses 5.0% Energy Potential 1,142,857 kwh/a Energy Potential Capacity 143 kw Energetic Use CHP Steam Production (24/7) Energy potential 1,142,857 kwh/a 0 kwh/a Caloric Capacity 143 kw 0 kw Electrical Capacity 50 kw 0 kw Electrical Efficiency 35% 0% Thermal Eficiency 40% 0% Thermal Capacity 57 kw 0 kw Overall capacity 143 kw 0 kw Full operation time 8000 hours/a 0 hours/a Electricity Generation 400,000 kwh/a 0 kwh/a Heat Generation 457,143 kwh/a 0 kwh/a Energetic Demand 1,142,857 kwh/a 1,142,857 kwh/a Calorific Value Natural Gas 8.5 kwh/m³ Sustitution of Natural Gas 134,454 m³ / year Source: Own Calculations GIZ, 2015 30-40 % of generated heat shall be used for biogas process (own consumption) Foto: GIZ Serbia 2015 Seite 11
Average Investment Costs- Individual design Specific Investment Costs Biogas Plant 75 kwel only CHP and Flare Specific Investment Costs Biogas Plant 150 kwel only CHP and Flare Specific Investment Costs Biogas Plant 250 kwel only CHP and Flare Specific Investment Costs Biogas Plant 500 kwel only CHP and Flare Specific Investment Costs Biogas Plant 750 kwel only CHP and Flare Specific Investment Costs Biogas Plant 1.000 kwel only CHP and Flare ca. 9.000 /kw el. ca. 1.700 /kw el. ca. 6.500 /kw el. ca. 1.800 /kw el. ca. 6.000 /kw el. ca. 1.300 /kw el. ca. 4.600 /kw el. ca. 1.000 /kw el. ca. 4.000 /kw el. ca. 900 /kw el. ca. 3.500 /kw el. ca. 800 /kw el. Source: FNR, 2014 Project size between 5.000 and 12.000 /kw (average 8.000 /kw) according to FvB 2015: Reduction of investment costs possible through use of existing equipment like manure tanks Standardized technology from already existing German market for small scale manure biogas plant available Seite 12
Estimated Investment Costs (CAPEX) for modell-case Investment Costs Description Quantity Cost per Unit Total Cost Life-Time Depreciation Civil Works 1 Ground preparation 1.00 10,000.00 10,000.00 15.00 666.67 2 Foundations and canals 1.00 10,000.00 10,000.00 15.00 666.67 Installation of Digesters incl Heating 3 system, Protection and Insulation 1.00 70,000.00 70,000.00 15.00 4,666.67 4 Buildings and Infrastructure 1.00 10,000.00 10,000.00 15.00 666.67 5 Storage Tank open 1.00 50,000.00 50,000.00 15.00 3,333.33 6 Installation of equipment 1.00 50,000.00 50,000.00 15.00 3,333.33 200,000.00 Planning and Engineering 1 Project Concept and Permission 1.00 10,000.00 10,000.00 15.00 666.67 2 Design and Feasibility Studie 1.00 10,000.00 10,000.00 15.00 666.67 3 Site supervision 1.00 10,000.00 10,000.00 15.00 666.67 4 30,000.00 Equipment and Components 1 Pumping systems 1 7,500.00 7,500.00 15.00 500.00 2 Tube system Substrate 1 10,000.00 10,000.00 15.00 666.67 3 Agitation systems 4 5,000.00 20,000.00 15.00 1,333.33 4 Gas membrane 1 15,000.00 15,000.00 15.00 1,000.00 5 Biogas flare 1 5,000.00 5,000.00 15.00 333.33 6 Gas treatment 1 10,000.00 10,000.00 15.00 666.67 7 Gas pipelines 1 5,000.00 5,000.00 15.00 333.33 8 Measuring and Control 1 5,000.00 5,000.00 15.00 333.33 9 CHP and Transformer Station 1 60,000.00 60,000.00 15.00 4,000.00 10 Electrical Integration 1 20,000.00 20,000.00 15.00 1,333.33 157,500.00 Other 1 Miscelleanous 5% 387,500.00 19,375.00 15.00 1,291.67 2 Insurance and Bank Guarantees 2.5% 387,500.00 9,687.50 15.00 645.83 5 29,062.50 416,562.50 27,770.83 8.331 /kw overall investment (assumed) Foto: Fachverband Biogas 2015 Source: Own Calculations GIZ, 2015 Seite 13
Economic presumptions modell-case Feed-in Tariff: 0,1566 /kwhel for 400.000 kwh per year (50 kw, 8.000 full load hours per year) Sales heat price: 0,03 /kwh Heat, 30 % of generated heat is used/sold externally Financing: 30 % equity, 5 % per year interest rate on commercial loan for 10 years Grant: 15 % of investment (e.g. websefff, UNDP/GEF) Manure costs: 0 /t, 1st year after commissioning: 80% of production 80% sales and 80% of variable costs Maintenance costs: 1.5 % per year of investment for biogas plant plus 0,015 Euro/kWhel for CHP Electricity consumption: 6 % of overall generation for 0,05 Euro/kWhel Operation staff: 365 days x 1 h/d x 10 EUR/h = 3.650 EUR/year Admin and Overhead: 1 % of income, telecommunication: 25 /month Insurance: 0,25 % of overall Investment Fees: 1,000 Euro/year Miscellaneous: 2 % of income Production cost increasing rate: 2 % Increasing of feed-in tariff referred to inflation rate Eurozone: 2 % per year NPV and IRR-Evaluation basing on employed equity with Return-On Equity (RoE)-expectation of 5% Solid manure from cattle farm in Serbia, Foto: GIZ 2014 Seite 14
Cash Flow 50 kw Biogas Manure Plant, FiT = 18Ct/kWh Concept 0 1 11 12 13 14 15 Calculated on equity, 5 % equity interest rate IRR on overall project cash flow 18-19 % for 15 years Total (15 years) Heat Use 3,291.43 5,015.29 5,115.60 5,217.91 5,322.27 5,428.71 70,327.20 Electricity Feed-In 57,600.00 87,767.60 89,522.95 91,313.41 93,139.68 95,002.47 1,230,726.02 Reduction of CO²-Emission 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TOTAL INCOMES 60,891.43 92,782.89 94,638.55 96,531.32 98,461.94 100,431.18 1,301,053.22 Raw Material 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Maintenance Biogas plant 4,278.75 6,519.72 6,650.11 6,783.11 6,918.77 7,057.15 91,423.07 Electricity Consumption 960.00 1,462.79 1,492.05 1,521.89 1,552.33 1,583.37 20,512.10 Operation Staff 2,920.00 4,449.33 4,538.32 4,629.08 4,721.66 4,816.10 62,390.97 Telekommunication 300.00 365.70 373.01 380.47 388.08 395.84 5,188.03 Biological Support 2,500.00 3,047.49 3,108.44 3,170.60 3,234.02 3,298.70 43,233.54 Fees and dues 1,000.00 1,218.99 1,243.37 1,268.24 1,293.61 1,319.48 17,293.42 Administration and Overhead 608.91 927.83 946.39 965.31 984.62 1,004.31 13,010.53 Insurance 1,041.41 1,041.41 1,041.41 1,041.41 1,041.41 1,041.41 15,621.09 Miscelleanous 1,217.83 1,855.66 1,892.77 1,930.63 1,969.24 2,008.62 26,021.06 Maintenance CHP 4,800.00 7,313.97 7,460.25 7,609.45 7,761.64 7,916.87 102,560.50 TOTAL Operation Costs 19,626.90 28,202.88 28,746.11 29,300.20 29,865.38 30,441.86 397,254.32 EBITDA 41,264.53 64,580.01 65,892.44 67,231.12 68,596.57 69,989.33 903,798.90 Interest costs 11,455.47 0.00 0.00 0.00 0.00 0.00 67,597.75 EBTDA 29,809.06 64,580.01 65,892.44 67,231.12 68,596.57 69,989.33 836,201.15 Taxes 0 0 0 0 0 0 0.00 NET SURPLUS 29,809.06 64,580.01 65,892.44 67,231.12 68,596.57 69,989.33 836,201.15 Investment Costs -416,562.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Working Capital 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Debt Financing 229,109.38 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Repayment 18,215.24 0.00 0.00 0.00 0.00 0.00 229,109.38 Grant 62,484.38 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 CASH FLOW -124,968.75 11,593.82 64,580.01 65,892.44 67,231.12 68,596.57 69,989.33 482,123.03 OVERVIEW CASH-FLOW in Euro +15 % increasing FiT +45 % increasing profitability!! Indicators 10 years 15 years NPV (5%) 74,718.89 244,638.95 IRR 15.04% 21.30% Source: Own Calculations GIZ, 2015 Seite 15
Technical and financial aspects to consider Modification of existing manure tanks for conversion into a biogas digester possible by installing heat insulation, agitation system, gas storage, heating pipes and concrete protection? Permission and concession procurement Low dry matter content may require especific biogas technology or additional solid organic substrates Availability of slurry and manure all over the year? Additional external heat demand for further income growth GIZ Biogas Workshop Serbia - Foto: GIZ 2015 Grant requirement/availability? Seite 16
Reasons for implementation Additional cash-flow of over 482.000 per project without taxation in 15 years possible (around 32.700 per year) Emission reduction of methane from manure storage Environmental treatment of manure waste Renewable energy sources, energy independency Conditioning of fertilizer, nutrients stay in effluents additional market? Upscale and multiplication possible Mirotin Energo Biogas plant, Vrbas, Serbia - Foto: GIZ 2014 positive visibility Investment cost reduction through adopted technology? Seite 17
Implemented by: Potentials of Bioenergy Energy-Supply-Contracting for the heating of public buildings in Serbia DKTI - Development of a Sustainable Bioenergy Market in Serbia Local subsidies / RDA Zlatibor / Center for Development Leskovac Seite 18
Fuel prices for heating in Serbia FUELS Heat Values Price per Unit (net) Calorific Price Boiler Efficiency Heat Price Agro Pellets 3.9 kwh/kg 100 /t 26 /MWh 85% 30.2 /MWh Brown coal 4.5 kwh/kg 100 /t 22 /MWh 75% 29.6 /MWh Electricity 1.0 kwh/kwh 60 /MWhel 60 /MWh 85% 70.6 /MWh Light Oil 12.6 kwh/kg 1.05 /l 98 /MWh 85% 115.3 /MWh LPG 12.9 kwh/kg 1.00 /kg 78 /MWh 90% 86.3 /MWh Heavy Fuel Oil (Mazut) 11.2 kwh/kg 550 /t 49 /MWh 80% 61.3 /MWh Natural gas 10.0 kwh/m³ 0.41 /m³ 41 /MWh 95% 43.2 /MWh Wood Pellets 4.7 kwh/kg 160 /t 34 /MWh 90% 37.8 /MWh Woodchips (moisture 35 %) 3.1 kwh/kg 55 /t 18 /MWh 85% 20.9 /MWh Straw in Bales 3.9 kwh/kg 45 /t 12 /MWh 80% 14.4 /MWh Firewood (moisture 45%) 2.5 kwh/kg 60 /t 24 /MWh 65% 36.9 /MWh Current fuel prices for heating in Serbia without VAT Source: GIZ study and calculation Prices can differ depending on location, quality and quantity Seite 19
Fuels used for heating in public buildings in Serbia (without district heating) Total installed heat capacity in public building without district heating connections in Serbia: ca. 900 MW Foto: GIZ 2014 Source: GIZ Public Building Overview Serbia 2014 Sustainable available wood potential: 7 million m³/a ~ 10.500 GWh/a Seite 20
Fuels used for heating in district heating in Serbia Average fuel type consumed in DH in Serbia 18% 1.5% 0.5% 15% 65% Natural Gas Heavy Oil Coal Light Fuel Oil Wood Total installed heat capacity in district heating systems in Serbia: ca. 5.657 MW Sustainable available wood potential: 7 million m³/a ~ 10.500 GWh/a Source: GIZ 2015, Survey and assessment of the actual usage of fuel of all district heating companies in Serbia and existing plans for short and mid-term investments, including those for fuel switch Seite 21
Biomass-ESCO-Potential for Serbia Project example with simple numbers: public school building in Serbia Current heating system and its costs: 2 overdesigned, 20-years-old light fuel boilers á 400 kw Current consumption: 75 t/a light fuel á 1.000 /t = 75.000 /a Boiler Technical School Pozega, Foto: GIZ 2014 Solution with a woodchip boiler concept: 1x 500 kw wood chip system for around 150.000 200.000 Investment cost, current system as a back-up Future fuel costs: 275 t/a á 65 /t = 17.875 /a Seite 22
Crucial Steps for ESCO-PPP-Procurement in Serbia Project proposal to be approved by assembly (prefeasibility level) Foundation of public sides project`s team Feasibility Study with Business Plan and Value-for-Money-Analysis Duration for revision by PPP-Comission 3-6 weeks Council/Assembly approval for procurement procedure Contract model and specifications Bidding and selection criteria Council/Assembly approval for selected bidder and final contract Legal Framework for PPP established and doable! Seite 23
Implementation guide of permits and licenses for bioenergy plants in Serbia http://www.mre.gov.rs/doc/efikasnost izvori/v02%20biomass%20plants%20 %20Detailed%20Guide.pdf http://www.mre.gov.rs/doc/efikasnostizvori/v01%20biomass%20plants%20-%20brief%20guide.pdf More information, market overviews and studies on: www.bioenergy-serbia.rs Seite 24
Thank you for your attention! Thomas Mitschke, GIZ-DKTI Component Leader Project Development Please visit us on: www.bioenergy-serbia.rs Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Development of a Sustainable Bioenergy Market in Serbia Bože Jankovića 39 11000 Belgrade Serbia T +381 11 3912 507 E bioenergy-serbia@giz.de Seite 25