WEB Decision Support System for Biomass Plant Feasibility Study

R. Berruto a, P. Busato b a DEIAFA, Via L. Da Vinci, 44, 10095 Grugliasco (TO, Italy, [email protected] b DEIAFA, Via L. Da Vinci, 44, 10095 Grugliasco (TO, Italy, [email protected]

Abstract Biomass, with 4,3% energy produced of the total EU consumption, represents the most relevant single renewable resource. The energy production from biomass is an opportunity for agriculture, that seen in the past years the raise of the EU contribution to the renewable energy production. In the simplest case, the agricultural firm must simply redirect its output to another supply chain. In the worst case, it must change type of production. Often the lack of reliable and complete information on this new activity, which is needed to carry out a correct technical and financial analysis, tends to hinder the development and exploitation of biomass based technologies. Hence, there is a need of standardized procedures and data to assess the feasibility of each initiative in order to ensure uniformity, which in turn is a guarantee of the quality of the assessment. With the aim to help the dissemination of the information and the development of the biomass supply chain in agriculture the authors developed a WEB application for a biomass plant feasibility study for the following technologies: 1. Electric or Thermal generation from biomass combustion; 2. Co-generation (Thermal and Electric) from biomass combustion; 3. Electric generation from biogas produced from biomass and biological wastes fermentation. The application provides standard biomass data in the database and a standard framework to compute, for free, the biomass plant business plan. The biomass cost could be computed with a great level of detail (production, transportation, harvesting) when it is derived from farm production by the EnergyFarm® application hosted in the same web site of the application presented in this paper. Among the advantages, the user could compare his result with those of other users, already in the database, without bias since all the feasibility studies share the same standard data and procedures. The use of the WEB decision support system is applied to a case of study, related to a biogas plant feasibility study. Key words: web application, energy production, biomass, economic evaluation, farm management

1 Introduction The total primary energy consumption for EU countries in 2005 has been in the neighbourhood of 1.756 Mtoe, of which slightly more than 112 Mtoe (6.38%) have been produced from renewable resources.

Among renewable resources, the energy produced from biomass has exceeded 75 Mtoe, which corresponds to 66,1% of total energy from renewable resources and to 4,3% of total energy consumption. Hence, biomass represents the most relevant single renewable resource, even though there are several difficulties in its exploitation because of the stretch of the single supply chains, which consist of different phases and partners. The energy production from biomass is both an opportunity and a necessity for agriculture, in order to fully exploit available assets in a context in which the European Union keeps reducing EU contributions to food-oriented agribusiness and increase the contribution to the renewable energy production, including that from biomass. Given this incentive to switch to non-food cultivations, growing biomass for energy generation is a brand new scenario for farmers. In the simplest case, the agricultural firm must simply redirect its output to another supply chain. In the complex case, it must change type of production, converting directly its product in energy and selling the service outside the agriculture. In both cases, the farm finds itself in a different supply chain with possibly new rules. One of the main difficulties for actors interested in playing a role in the development of biomass energy supply chains is the lack of reliable and complete information, which is needed to carry out a correct technical and financial analysis. This tends to hinder the development and exploitation of biomass based technologies. Hence, there is a need of a standardized tool to assess the feasibility and viability of each initiative, possibly standardizing input data and evaluation procedure in order to ensure uniformity, which in turn is a guarantee of the quality of the assessment. Such a procedure must be supported by suitably available software, and it must encompass all of the involved problem dimensions. The aim of the research is contributing to knowledge which can be exploited in designing and evaluating biomass energy supply chains. The first step was the development of a WEB application, hosted by the University of Turin, called EnergyFarm (http://www.energyfarm.unito.it/en/default.asp) that allows for the economic and energetic comparison of crop systems, including biomass production. In the second step, the WEB decision support system, presented in this paper, has been developed to compare the most common technologies for the conversion of biomass into energy through the computation of a simplified business plan. In this paper will be described the structure and the methodology used for the implementation of the WEB DSS for biomass plant feasibility study and introduced an example of utilization related to biogas plant.

2 WEB Application implementation The model uses the protocol of communication HTTP, with the language Active Server Pages (ASP), connected to a database built with Microsoft® Access®. The WEB application produces a simplified business plan of the following technologies: 4. Electric or Thermal generation from biomass combustion; 5. Co-generation (Thermal and Electric) from biomass combustion; 6. Electric generation from biogas produced from biomass and biological wastes fermentation. The application involve that each plant is inserted inside of a project. In this form the user has to insert some general data of the project such are description and location, rate of interest used for the calculations of the model, market price for thermal (€/MJ) and electric energy (€/kWh). In this way it is hypothesized that all the plants within the same project will have in common the same value of the inserted parameters. The second form is related to the plant design, in term of power installed, with description of the system and of the thermal and electric energy demand. In this form are also defined the costs of the installation, including those for the delivery of the energy produced to the point of use. For what concern the thermal

requirements and thermal power, they are computed from the building volume and insulation characteristics. The user has to specify if the boiler/engine will use burn just biomass/biogas or also fossil fuel. The value of some parameters is selected from a list, in order to avoid mistakes that will yield erroneous results. Selection is provided for the thermal efficiency, the electric efficiency and so on, the insulating parameters for the buildings to be heated, and the number of hours that the heating should be provided yearly, according to regional and national guidelines. Once the plant has defined and the energy requirement has been inserted, the user could add biomass or fossil fuels, in order to match the energy required with the energy that can be produced by the biomass delivered to the plant. The model has a database with all the main technical information and data related to biomass characteristics (LHV, methane yield, moisture content, etc), and the user can rely on the data provided for his own feasibility study. The biomass parameters (energy production, methane yield, material composition and emissions) are presented in the database with four different reference units: kg, t, L and m3. So, the user will found the same biomass (e.g. corn silo) presented in the database as many times as the different reference units (weight or volume) used. He has just to choose the biomass record that presents the same reference unit of his own biomass. The data standardization is essential for comparison between different technologies, or different plant costs within the same technology and plant size. The cost of the biomass is real if we purchase it from a supplier. In the case where the biomass is produced by the owner of the plant (e.g. corn silo) it is necessary to compute the cost of the resource. With Energyfarm®, present in the same web site under the menu farm (Berruto & Busato, 2006), the user could compute his own biomass cost considering the cultivation, the transportation and the process before the biomass use, and input the result into the feasibility study WEB application. Before the computation of the results, another form has to be filled with the contributions, belonging to the follow categories: • Capital basis as a percentage of the plant value; • Interest basis; • Contribution per unit of energy produced, like the green certificates for electricity production from renewable sources; • Contribution to the management and annual expenses. In some cases (e.g. self-production of energy) the public agencies cover partially the wages of the people working at the biomass plant. After the data insertion has been completed, the WEB application outputs a feasibility study for the biomass plant, with technical and economic indicators. This allow the user to compare, for free, different scenarios of the feasibility study before starting with a more professional, detailed and costly studies. Also he can compare his scenario with the other plants already designed in the application, by other users, and compare technologies offered by different vendors. The output web page, related to the analysis of the costs and the income of the plant is composed by the followings sections: • Cost of investment. It is considered the total cost for the realization of the plant, including concrete construction, land purchase, project cost, the contributions available and, by difference, the net investment that should be financed directly by the entrepreneur; • Yearly costs. It includes the fixed costs (the amortization, divided among building machines and devices, that have different lasting, the interest), the annual costs of management of the plant, the costs of assistance and the biomass costs. This cost includes the biomass itself, the transportation cost to and from the plant and the activities endured previously to its utilization for energy production. The possible income from the delivery of biomass wastes from suppliers is calculated as a reduction of the costs of purchase of the biomass, and it doesn't appear in the sale side. In this section the unitary cost of the produced thermal (€/MJ) or electric (€/kWh) energy is also calculated. • Gross income. The energy sold, both thermal and electric, the contribution per unit of energy produced and the revenues are computed and summed.

•

Net income. The section includes the annual profit and the payback time of the investment.

With the purpose to allow further, customized elaborations in a spreadsheet, the result web page has been formatted in a way that can be copied and pasted in Excel®. In this way the user can easily compare scenarios in a different way than those provided by the WEB application and also has some results already formatted for technical reports. The application refers the results to an average year. However, for a careful evaluation of the plant, the cost-benefit analysis should be made year by year to compute correctly the business plan of the energy production from biomass. Nevertheless, the purpose of the application is that to give a reliable preliminary feasibility study, even if not so detailed. For greater level of detail the entrepreneur could rely on consultancy firms.

3 Application of WEB decision support system to a case study: biogas plant With the aim to demonstrate the use of the web application, one portion of the feasibility study related to a plant for electricity production from biogas is presented in Figure 1. The plant will be installed in the year 2007 in the Piedmont region, NW part of Italy. The plant has two engines with a special device to recover energy so the electric efficiency is expected to be quite high (0,41). The plant uses many different biomasses and wastes (manure from cattle, pigs, corn silo, glycerine, sugar beet wastes, etc.). The interest rate was considered at 3%, the depreciation of the buildings and concrete constructions was assumed of 20 years, while the engines and electric devices were supposed to last 8 years. The electric price was taken from Italian prices – year 2006.

Fig. 1 Cost benefits analysis for the biogas application. Main window.

A consultant firm provided all the technical data and investment costs of the plant. Technical data related to biomass and biogas production (LHV, Methane Yield) were taken from consultant audit, and from two main internet database sources (GEMIS, 2007 and Phyllis, 2007). The price of corn silo, produced within the farm, was computed with the EnergyFarm® application (Berruto & Busato, 2006). Due to space availability in the paper, just the main window of the economic analysis is provided. As an example, starting from the biogas plant depicted for the case of study (Figure 1), one simple simulation was done by changing the value of the green certificate for electric energy production from biomass, ranging from 0,06 to 0,14 €/kWh. The results are presented in Figure 2.

16

Payback Time (Years)

14 12 10 8 6 4 2

Actual Value

0 0,05

0,07

0,09 0,11 0,13 Green Certificate (Electricity) Value (€/kWh)

0,15

Fig. 2 Payback time for the biogas plant of the case of study, as a function of the Green Certificate Value.

It can be noted that the payback time is of 5,66 years with the current value of the certificate (0,118 €/kWh), however it range from 4,59 years with the green certificate value of 0,14 €/kWh, to 14,5 years with a value of 0,06 €/kWh. Currently in Italy the green certificates have a maximum of 12 years duration, and from the chart we can point out that the certificate price cannot drop below 0,07 €/kWh, otherwise the plant payback time will be greater than the number of years we can profit of the green certificates, pointing out the infeasibility of the plant by the economic point of view. This example shows just one type of result that the single user can derives from the outputs of the web application. In this way he can explore, for free, different scenarios (e.g. increase of biomass cost, interest rate, etc) and the effects on the profits and payback time of the plant. Of course in the simulation it is possible to mix many parameters and show off the effect of each single factor into the economic analysis. Thanks to the standard data provided by the application, it is possible to compare the single plant data with grouped, anonymous results of plant inserted by other users.

4 Conclusions The application developed could be a first step to be adopted for a feasibility study for establishment of new plant for the production of thermal or electric energy from biomass. The application provides some indexes and comparison with other plants/technologies inserted in the database. The use of the web to run the application has the following advantages: -

Standardization of the results gotten with the same method of calculation and with the same biomass characteristics, that allows the comparison of the results produced by different users, and different scenarios;

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Free availability of standard data on biomass characteristics (Low Heating Value, moisture content, density, etc.) for non-expert users;

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Absence of installation and costs of distribution of the software and of the updates, since the application resides only in one server;

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Safe storage of the user feasibility studies and possibility to retrieve them, in presence of Internet connection;

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Summarized and grouped results for classes of plant sizes that produce energy from biomass sources.

From a more general point of view, the most important result is the widespread diffusion of culture, among professionals, public and private stakeholders, and possibly students. A WEB application providing simple, anonymous and free access to sophisticated and otherwise quite costly services is the only way to achieve this significant result. The way with which the technical, economic and energy parameters are computed can vary also from country to country, as the unities of measure. Nevertheless, an application distributed on the web represents a first step toward the standardization of the data and the methodologies of calculation, within EU countries. Acknowledgements. This research has been made with funding from Region Piedmont, within the PROBIO Program (biofuels program), Italian Ministry for Agriculture and Forestry.

5 References Berruto, R., Busato, P. 2006. EnergyFarm: Web Application to Compare Crop Systems Under Technical, Economic and Energetic Aspects. Proceedings of 4th World Congress of Computers in Agriculture. 24-26 July, Lake Buena Vista, Florida, USA, 481-487. GEMIS 2007. Global Emission Model for Integrated Systems database http://www.oeko.de/service/gemis/en/index.htm last accessed April 2007. Hunt, D. 2001. Farm power and machinery management. Iowa State University Press, Ames, USA, 77-93. Jarach, M., 1985. On the vaues of energy coefficient for analysis and energy balance in agriculture. Rivista di Ingegneria Agraria, 2, 102-114. Nielsen, V., Sørensen, K. G, 1993. Theoretical background and calculation examples concerning fieldwork. Bulletin n. 53, dept. of Agricultural Engineering and Production Systems, Bigholm, Denmark. Phyllis 2007. PHYLLIS, database for biomass and wastes, http://www.ecn.nl/phyllis/ last accessed April 2007. Pimentel, D., Pimentel, M. and Karpenstein, M. 1999. Energy use in agriculture: an overview. CIGR E-journal, http://cigrejournal.tamu.edu/submissions/volume1/CIGREE98_0001/Energy.pdf , 1-32, last accessed April 2007.