Economic Impacts of Mechanisation and InHouse Renewable Energy Generation and
Integration in African CPO Mills
R.K. Padi
Promoters:
Dr. A.F.A Chimphango
Prof. J.F. Görgens
Fakulteit Ingenieurswese

Faculty of Engineering
Overview
 Background
 Problem Statement
 Objectives
 Process Modelling Approach
 Results
 Conclusion
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
2
2
Background
Oil Palm value chain
Study focus area
Background
Problem
Statement
Scope of Study
Objectives
Process
Modelling
Approach
Results
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Conclusions
3
Background
African rural CPO processing
 Dominating traditional Processing (>80 % )
 Inherent setbacks of traditional technologies
• Lower production capacities
• Labour Intensive
• Poor product quality
Overall low productivity- Mechanisation addresses aforementioned
challenges
Background
Problem
Statement
Scope of Study
Objectives
Process
Modelling
Approach
Results
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Conclusions
4
Problem Statement
Reasons for less adoption of mechanised units?
• Perceived risk on profit margins
• Lack of diverse energy
• Social acceptance
Background
Process
Results
Modelling
Approach
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Problem
Statement
Scope of
Study
Objectives
Conclusions
5
Objectives
Develop process models for various levels of mechanization in the CPO
process
Determine the potential contribution of the process biomass residue to
its energy demands.
To establish the economic impact of mechanization and in-house energy
integration in the CPO process
Background
Process
Results
Modelling
Approach
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Problem
Statement
Scope of
Study
Objectives
Conclusions
6
Modelling Approach
•
•
•
•
Degree of
Mechanisation
Organisational
level
Base-Case
Improved Case
Energy Integration
Schemes
Background
Process
Results
Modelling
Approach
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Problem
Statement
Scope of
Study
Objectives
Conclusions
7
Simplified CPO process flow diagram
Background
Process
Results
Modelling
Approach
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Problem
Statement
Scope of
Study
Objectives
Conclusions
8
Process configurations investigated
Traditional
•
•
Household scale
110 liters CPO/day
Background
Semi-Mechanised
•
•
Small-scale
1193 liters of CPO/day
Mechanised
•
•
Industrial scale
49287 liters CPO/day
Process
Results
Modelling
Approach
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Problem
Statement
Scope of
Study
Objectives
Conclusions
9
In-house Energy Generation & Integration
Traditional and semi-mechanised
• Thermal energies by combusting solid residues in Improved cook
stoves
Mechanised (steam, hot water & electricity)
• Cogeneration of heat and power (CHP) from solid residues (MF, PKS,
EFB)
• Cogeneration of heat and power from Biogas (POME)
Background
Process
Results
Modelling
Approach
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Problem
Statement
Scope of
Study
Objectives
Conclusions
10
Cogeneration (CHP) from solid residues
• EFB has high moisture (65%) & less combustible
• Two scenarios investigated:
1: No EFB addition
Background
2: Shredding & drying EFB + conventional
fuel
Process
Results
Modelling
Approach
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Problem
Statement
Scope of
Study
Objectives
Conclusions
11
Cogeneration (CHP) from solid residues
• Steam turbine power-to-heat ratio between 0.1 – 0.3 (US EPA, 2007)
• Process model developed in Aspen Plus® simulation software
• Economic assessment based on Ghana’s year 2014 conditions (Interest rate
-24%; Inflation rate -15%)
Background
Process
Results
Modelling
Approach
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Problem
Statement
Scope of
Study
Objectives
Conclusions
12
Cogeneration (CHP) from solid residues
Results
Technical Performance
Annual rate of generation
Scenario 1
Scenario 2
MF (tons/yr)
13141.44
13141.44
PKS (tons/yr)
6836.47
6836.47
EFB (tons/yr)
-
45576.46
CPO Process steam (tons/yr)
40884.48(100)*
40884.48(100)*
CPO Process hot water (tons/yr)
31074.86(100)*
31074.86(100)*
-
161840.62
1654.85(100)*
1654.85(100)*
4705.64
17040.79
EFB drying steam (tons/yr)
CPO process electricity (MW/yr)
Export electricity (MW/yr)
* Values
in parenthesis represents percentage of energy demand of the 13 ton FFB/hr CPO mill attained
Economic Performance
Electricity s.p. of $0.207/kWh
Parameters
Electricity s.p. of $0.348/kWh
Scenario 1
Scenario 2
Scenario 1
Scenario 2
-27.96
-55. 91
-22.03
-38.85
0.10
1.42
9.94
12.93
24.8
23.2
15.5
13
NPV (million $)
IRR (%)
Payback period (yrs)
Background
Process
Results
Modelling
Approach
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Problem
Statement
Scope of
Study
Objectives
Conclusions
13
Cogeneration (CHP) from solid residues
Conclusions
• Both Scenarios investigated CAN MEET in-house energy demand
with excess electricity for export.
• Scenario 1 and 2 did NOT achieve expected IRR of 40%. Scenario 2
(EFB addition) improved the economics from IRR of 9.94% to 12.93%
• Realistic electric price at $1.132/kWh and $0.842/kWh for Scenario
1 and Scenario 2 respectively (for IRR of 40%).
• Scenarios 1 and 2 attained NPVs of $2.145 million and $1.774 million
at grant contributions of 80 and 65% respectively at prevailing power
price of $0.348/kWh. Thus both are viable under grant funding.
Background
Problem
Statement
Scope of Study
Objectives
Process
Modelling
Approach
Results
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Conclusions
14
Cogeneration (CHP) from Biogas (POME)
• Palm oil mill Effluent (POME) biogas yield of 2.65 - 4.96 m3m-3 day-1
(Yeoh, 2004).
• Scenarios investigated: Steam-turbine and Gas-engine routes
• CHP process modelled in Aspen Plus® simulation software
• Economic assessment based on Ghana’s year 2014 economic
conditions (Interest rate -24%; Inflation rate -15%)
Background
Process
Results
Modelling
Approach
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Problem
Statement
Scope of
Study
Objectives
Conclusions
15
Cogeneration (CHP) from Biogas (POME)
• Steam turbine process- similar to solid residue CHP
• Gas-engine process
Background
Process
Results
Modelling
Approach
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Problem
Statement
Scope of
Study
Objectives
Conclusions
16
Cogeneration (CHP) from Biogas (POME)
Results
Technical Performance
Annual rate of generation
Gas-engine route
Steam turbine route
2073.326
2073.326
2308.198 (5.65)*
11742.602 (28.72)*
CPO Process hot water (tons/yr)
29880 (96.16)*
-
CPO process electricity (MW/yr)
1654.85 (100)*
368.865 (22.29)*
1117
-
Biogas (tons/yr)
CPO Process steam (tons/yr)
Export electricity (MW/yr)
* Values
in parenthesis represents percentage of actual energy demand by the 13 ton FFB/hr CPO mill attained
Economic Performance
Electricity s.p. of $0.207/kWh
Parameters
Electricity s.p. of $0.348/kWh
Gas-engine
Steam turbine
Gas-engine
Steam turbine
NPV (million $)
-6.38
-14.46
-4.71
-14.22
IRR (%)
7.80
-0.77
14.89
0.18
Payback period (yrs)
11.3
14.3
9
13.7
Background
Process
Results
Modelling
Approach
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Problem
Statement
Scope of
Study
Objectives
Conclusions
17
Cogeneration (CHP) from Biogas (POME)
Conclusions
•
Gas-engine and steam-turbine NOT meet all in-house energy demand. Gas-engine
route attained all process electricity demand with excess for export.
•
Both routes investigated did NOT attain expected IRR of 40%. Gas-engine route
more promising with IRR of 14.9% at $0.348/kWh.
•
Realistic electricity price at $0.753/kWh and $9.403/kWh for gas-engine route
and steam-turbine route respectively (for IRR of 40%)
•
At power price of $0.348/kWh, Gas engine attained NPV of $158000 at 40% grant;
steam turbine NPV of $1.834 million at 90% grant. At $0.207/kWh, gas-engine NPV
of $234000 at 60% grant; steam turbine NPV of $576000 at 90% grant. Thus both
viable under grant funding.
Background
Problem
Statement
Scope of Study
Objectives
Process
Modelling
Approach
Results
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Conclusions
18
Results of Energy Integration in CPO
Processes
Energy Intensity (MJ/kg CPO)
40
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
35
30
25
20
15
10
5
0
B/C
I/C
Traditional
B/C
I/C
Semi-mechanised
B/C
Steam (Biomass residue)
Hot water (Biomass
residue)
Electricity (biomass
residue)
Electricity (national grid)
Diesel oil
MF, EFB
MF, EFB, residual oil
I/C
Mechanised
Manual energy
Wood
•
Mechanised I/C – adopted CHP solid residue (+EFB) (100% in-house energy attained &
competitive power price of $0.842/kWh)
•
Substituting external energy firewood (traditional), and national grid power (mechanized)
with available CPO process biomass residues is feasible.
•
The highest and least energy intensive processes: semi-mechanized B/C (37.058 MJ/kg
CPO) and mechanized B/C or I/C (6.007 MJ/kg CPO) respectively.
Background
Process
Results
Modelling
Approach
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Problem
Statement
Scope of
Study
Objectives
Conclusions
19
0.05
0.04
12
0.03
8
0.02
4
0.01
0
0
Fixed Capital
Working Capital
14
12
10
8
6
4
2
0
Utilities
Fixed charges
O&M
Specific capital investment ($/kg)
1.5
1
0.5
0
Specific Production Cost ($/kg)
16
Millions
0.06
Total Production Cost ($/yr)
20
Specific Capital Investment ($/kg)
Millions
Total Capital Investment ($)
Economic Results of CPO Process
General expenses
Feedstock (delivered)
Specific Production Cost ($/kg)
•
Variation in TCI ranging $4464 - $17.746 million due to difference in capacities
•
SCI ranging $0.013/kg - $0.055/kg with semi-mechanised level having least range of $0.013 - 0.019/kg while
mechanised level attained highest range of $0.053 - 0.055/kg
•
At B/C scenarios, traditional level’s SPC was higher than the semi- and mechanised level’s by 15.25% and
63.66% and by 31.90% and 42.73% at I/C scenarios respectively. Thus, suggesting a high benefit of
economies of scale on the production cost.
Background
Process
Results
Modelling
Approach
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Problem
Statement
Scope of
Study
Objectives
NPV of $18,500,245 & $11,501,445
Conclusions
20
Economic Results of CPO Process
0
-10
0
1
2
3
4
5
6
-20
Millions
Semi-Mechanised CPO CCF
CCF ($)
Thousands
CCF ($)
Traditional CPO CCF
2
1.5
1
0.5
0
-30
-0.5 0
-40
2
4
6
Plant life (yrs)
8
10
Plant life (yrs)
Base Case
Base Case
Improved Case
Improved Case
NPV of -$109,334 & $301,643
NPV of - $ 16,212 & -$10,110
300
200
100
0
-50 20 30 40 50 60 70 80 90 100 110
-100
-150
NB: At minimum selling
price of $710/ton CPO
-200
-250
0
-100
Thousands
400
NPV ($)
Millions
CCF ($)
Mechanised CPO CCF
0
5
Base Case
10
Plant life (yrs)
15
Improved Case
NPV of $18,500,245 & $11,501,445
Background
-300
Grant contribution to TCI (%)
Semi-mechanised B/C
Traditional B/C
Traditional I/C
Process
Results
Modelling
Approach
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Problem
Statement
Scope of
Study
Objectives
NPV of $18,500,245 & $11,501,445
Key:
CCF –Cumulative Cash
Flow
NPV- Net Present Value
Conclusions
21
Conclusions
•
For (B/C), only the mechanized process is economically viable with an
NPV of $18.5 million and IRR of 47.23%.
•
For I/C: semi-mechanized and mechanized processes are the
economically viable options with IRR of 143% and 40.57% respectively.
•
Poor performances of traditional- B/C & -I/C and the semi-mechanized
B/C mainly due to their unduly high SCI ranging $0.019 – 0.053/kg and
SPC between $0.431 – 1.187/kg as they still remained unviable under
100% grant funding
•
Thus mechanization is economically beneficial in CPO processing
•
In-house energy from process residue is viable and most promising at
semi-mechanized and mechanized levels.
Background
Problem
Statement
Scope of Study
Objectives
Process
Modelling
Approach
Results
Evans Chomba, Prof. J. Gorgens and Dr. F. Collard – Stellenbosch University – Stellenbosch, South Africa
Conclusions
22
Thank You!
Fakulteit Ingenieurswese

Faculty of Engineering