Mapping out a renewable energy future
Instead of investing to properly dispose unused agricultural waste, additional investment can convert this waste into a renewable energy source to provide energy back into the process plant for better overall energy efficiency.
Crushed sugarcane stalks, once regarded as trash, are fed into boilers and burned to generate fuel at a mill in northeast Thailand. The burned sugarcane waste generates enough electric power to support the Mitr Phol Bio-Power mill’s daily operations and even provides surplus power to Thailand’s electricity grid.
An APEC project on best practices in energy efficiency and renewable energy in industry recently highlighted the activities of the Mitr Phol Bio-Power’s mill. Renewable energy, if used efficiently, has the potential to supply 23 percent of final energy use in the global manufacturing industry and up to 14 percent of fossil feedstock can be replaced by biomass like sugarcane waste, also known as bagasse. Together, this equates up to 21 percent of final energy use, according to the APEC project report.
Taking advantage of incentives by the Thai government to promote renewable energy, Mitri Phol Bio-Power installed new high-efficiency boilers and turbines to generate electrical power and steam to run the mill’s manufacturing processes. The new cogeneration plant was especially designed to export excess power to the grid by a contract with the Electricity Generating Authority of Thailand (EGAT), a new concept for the sugar industry.
“The project was beneficial in terms of both financial return and plant efficiency,” said Mr. Suwat Kamolpanus, Managing Director of Mitr Phol Bio-Power Co. Ltd.
“Before, the used sugarcane or bagasse was merely agricultural waste to be rid of. But with the government incentives, the bagasse has become a valuable asset to be well taken care of.”
With 450 million kilowatt hours of power generation annually, of which 300 million kilowatt hours are exported to the electricity grid, Mitr Phol Bio-Power is now regarded as a Small Power Producer.
“The agricultural processing industry is a good model for combining renewable energy and energy efficiency as they already have the agricultural waste at their processing plants,” explained Dr Nuwong Chollacoop, APEC project overseer and Head of the Renewable Energy Laboratory at the National Metal and Materials Technology Center (MTEC) in Thailand.
“Instead of investing to properly dispose unused agricultural waste, additional investment can convert this waste into a renewable energy source to provide energy back into the process plant for better overall energy efficiency,” he added.
However, the critical element is having the appropriate government incentives and policies to encourage companies to invest in economically viable renewable energy projects.
“In fact, Mitr Phol Group tried to export power to the grid before, but the incentives were not attractive then. However, once the government in Thailand offered the appropriate incentives and policies to promote renewable energy, the project became financially feasible,” added Mr. Kamolpanos of Mitr Phol.
The Thai government program included a feed-in premium or a premium offered to renewable energy producers. The program also included tax incentives for energy reduction, exemption of import duties and corporate tax for new investment in renewable and energy efficiency technologies, and a revolving fund to promote and push investment through lower interest rates provided by financial institutions.
“The most significant obstacle for renewable energy technologies in developing and emerging economies is competition from heavily subsidized fossil fuels since renewable technologies are usually more expensive,” said Dr Chollacoop.
“With fossil fuels subsidized by many governments, it is difficult for companies to employ renewable technologies.”
The outcome of the APEC project was a “roadmap” to assist governments in APEC economies. It outlines the steps that are required to plan and implement an industrial energy efficiency and renewable energy program.
The roadmap highlights ten key elements from developing financing packages to facilitating access to technology. Tax incentives and benefits are considered one of the most common policies used by governments to promote the introduction of renewable and energy efficiency improvements.
Leading by example through introducing energy improvements in government-owned industrial plants was also considered an important element of a successful program. In addition, government policies can provide support through demonstration projects and regulatory standards such as a minimum renewable energy requirement.
“With respect to the roadmap, we have endeavoured to formulate a generic map rather than being economy-specific,” explained Dr David Natusch, Managing Director, Resource Development Ltd in New Zealand, a consultant on the APEC project and report author.
“The steps that a government should follow in pursuing a national policy for the introduction of renewable energy in industry together with energy efficiency improvements are broadly outlined along with an indication of the sequence in which these steps need to be put in place.”
The project recommends that the next step is for APEC members to develop economy-specific roadmaps, including details of how each element will be achieved and by which government agencies.
“One of the best examples of how similar roadmaps are being developed is in Thailand. We should encourage more economies to develop their own roadmaps,” said Dr Natusch.
To move this initiative forward, targeted dissemination of the roadmap to key government policymakers and a follow-on seminar to assist policymakers develop their own economy-specific plans could be useful.
There are many obstacles to successful adoption of renewable and energy efficiency technologies by industry. A well-developed government roadmap or program can help address some of these issues. For example, by building technical capacity, government programs can help make renewable energy a reality in the region.
“The main obstacle for us was human resources both during the project implementation and plant operation,” explained Mr Kamolpanos of Mitr Phol Bio-Power Co. Ltd.
To overcome this problem, Mitri Phol Bio-Power hired the Electricity Generating Authority of Thailand (EGAT) as a consultant or owner engineer to manage the project and deal with the contractors. They also recruited staff from the power plant industry for key positions in the plant operation.
“Experience and knowledge transfer was critical for such a new technology,” added Mr Kamolpanos. “We have learned a lot and have not stopped doing so yet.”
More details on the government roadmap and industry best practices can be found in the APEC project report “Best Practices in Energy Efficiency and Renewable Energy in Industry” on the APEC website.