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COGENERATION in BELIZE Diversifying the Sugar Cane Industry By Robert Tillett Chief Plant Engineer Belize Sugar Indust

COGENERATION in BELIZE Diversifying the Sugar Cane Industry By Robert Tillett Chief Plant Engineer Belize Sugar Industries Limited. Presentation Outline. Contribution of the Sugar Industry to Belize World Leaders in Sugar Rationale for Cogeneration in Belize Brief Project Description

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COGENERATION in BELIZE Diversifying the Sugar Cane Industry By Robert Tillett Chief Plant Engineer Belize Sugar Indust

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  1. COGENERATIONin BELIZEDiversifying the Sugar Cane IndustryBy Robert TillettChief Plant EngineerBelize Sugar Industries Limited

  2. Presentation Outline • Contribution of the Sugar Industry to Belize • World Leaders in Sugar • Rationale for Cogeneration in Belize • Brief Project Description • Challenges and Benefits of the Cogeneration Project

  3. Key Characteristic of the Belize Sugar Cane Industry • Private Sector Led, Owned and Managed • Only one sugar factory processing 1.25 M tons of cane • Belize Sugar Industries, Limited is the Cane Processor • 95% of cane is grown by independent cane farmers • Belize Cane Farmers Association represent 9000 Farmers • Government regulates through the Sugar Act of 2001 • Belize is the Leader in the Caribbean: Lowest cost producer and highest factory efficiency

  4. 7000 tons cane per day 300 tons cane per day 10000 tons PWS 110000 tons Commercial Sugar BSI Factory

  5. CONTRIBUTION OF SUGAR SECTOR 10 yr Avg 1995 - 2004 • Numbers Employed 9672 EMPLOYMENT • As A Percentage of National Working 13.0 Population • As A Percentage of National Employment in 46.3 Agriculture

  6. CONTRIBUTION OF SUGAR SECTOR 10 yr Avg 1995 - 2004 ECONOMY • Sugar Industry Revenue as % of GDP 7.8 • Sugar Industry Revenue as % of Total Agricultural Production 56.9

  7. CONTRIBUTION OF SUGAR SECTOR 10 yr Avg 1995 - 2004FOREIGN EXCHANGE EARNINGS • USD (Million) 42.1 • % of Value of Domestically Produced Exports 26.7 • % of Value of Agriculture Exports 33.6 NB: Average Foreign Exchange Earnings projected to be USD 44 Million in the next 5 yr period.

  8. Belize: 0.12 Million Tons

  9. Belize: 0.10 Million Tons

  10. Drivers for Change • Evolution of International Competitive Market • Industry Stakeholders Vehicle for Increased Economic and Financial Returns • Constant Need to Effectively Manage Risk Facing the Business through Strategic Development

  11. Facilitators of Change • Industry Structure • Regulatory Framework Changes • Power Market Liberalization • Competitive Product Pricing

  12. Towards Diversification -Cogeneration • The Sugar Industry in Belize remains strong and viable, but is pursuing growth opportunities • It has experienced Steady Cane Production but there is scope for increased field productivity • However Need to Mitigate the Impact of External Shocks eg. • Exposure to increased freight, transport and insurance cost • Threats to Existing Markets

  13. External Market Threats: • Successful WTO challenge to EU Regime by Australia, Brazil, and Thailand • Loss in revenues due to EU price reductions of 36% by July 1, 2009 • General Market Trend - reduce price but increase quality demand • Previous Oversupply of Sugar to the World Market

  14. Cogeneration will help address Belize Energy Sector Needs by: • Meeting Government National Security Interest to reduce reliance on imported energy supply • Fulfilling Sector Policy of Promoting Renewable Energy Sources • Provide much Needed additional Capacity and Energy to the National Grid • Facilitate Displacementof Fossil Fuel based Energy and Import Substitution • Prove the IPP Model and Regulatory Processes • Reduce Foreign Exchange Demand especially long-term

  15. National Grid’s Generation Mix

  16. Projected Generation Mix with Cogeneration

  17. COGENERATION PROJECT OVERVIEW • Project is the initiative of BSI as Project Promoter • BSI has engaged Booker Tate as the Project Developer • Owned and Operated as a Private Sector Commercial Operation by • Belize Cogeneration Energy Limited (BELCOGEN) • Supply approximately 20% of the National Energy Demand by 2009 (15 years commercial PPA with BEL) • Generate Power and Steam to Supply Tower Hill Factory (20 years power and steam agreement with BSI) • Commercial Operation Date December 2008 • Financed by 55% Debt and 45% Equity

  18. Projected Allocation ofCapacity and Energy Production Grid IPP BSI Total • Capacity MW 13.5 2.5 9.0 25.0 • Energy Supply GWh 106 18 44 168 • Time Utilization % 90 • Represent 20% of grid demand by 2009 and therefore must be efficient, reliable, stable base load and environmentally sound.

  19. Project DescriptionKey Project Technical Parameters • 1.25 M tons of cane • 430,000 tons of bagasse to IPP • 585,000 tons of process steam to BSI • Two Boilers 90 t/hr, 900 psi (64 bar), 900 deg F (480 deg C) • 32.5MW Installed Capacity Cogeneration Power Plant, this includes: • Extracting Condensing Steam Turbine 15 MW • Back Pressure Steam Turbine 12.5 MW • Two Parallel HFO Generators each 2.5 MW

  20. Cogeneration - Environmental Credentials • Positive Environmental Impact and meets World Bank Environmental Standards • Reduce Air pollution from stack emissions to below 100 mg/normal meter cube • No Water Pollution from Cogeneration and provide additional power to BSI for Water Treatment • Rigorous Environmental Monitoring in compliance with the Equator Principles comprising Environmental Compliance, Social Responsibility and Corporate Governance

  21. Challenges to Project Development • Still Viewed by Many as a New Niche Sector • Few Economies of Scale given most Plants in the 20 – 50 MW Range • Significant Capital Investment, Total Project Cost US $1.4 – 2.0 Million/MW • Historically Renewable Energy Sources has not been competitive to Fossil Fuel Sources • Security of Fuel Supply – bagasse is largely location specific, while fossil fuel is a more unlimited commodity

  22. Challenges to Project Development • Constraints on Finance Resources • Regulatory Process and Framework for IPP model • significant learning curve also having to compete with differing energy sources • BELCOGEN is an Energy Sector Power Plant, Independent of Sugar Sector • Change in Mindset • Robust Contractual Framework which Penalizes Poor Performance • Need Government Support and Political Will

  23. CARBON CREDITS • Carbon market undeveloped but expanding rapidly • Opportunity to Access Clean Development Mechanism (CDM) Funds • Baseline Study to Quantify Carbon Credits and project design documents are presently being developed and funded by BELCOGEN • Valuation yet to be confirmed

  24. BSI Achievables BSI must: • Be financially independent of BELCOGEN • Convert in a Single Repair Season 50-60 Hz • Be Steam and Power Efficient • Process 1.25 million tons of cane • Achieve 82% Overall Time Utilization • Achieve 47 tons fiber per hour

  25. Cogeneration will Strengthen the Sugar Cane Industry • Provide for Value Added Income To BSI • Provide opportunity for Sugar Industry Expansion to Increase Throughput and to Add Value • Provide Steam Thermal Energy • Provide Power & Electrical Energy • Provide Investment Opportunity, Security and Expansion of Market To Farmers • Establish Project Development Credentials Amongst International Financiers for future Diversification Initiatives

  26. This has been a presentation of Cogeneration in Belize By Robert TillettChief Plant EngineerBelize Sugar Industries LimitedThanks for Your Attention!!!

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