Frost: Brazil Turns to Sugarcane Bagasse Power Generation to Reduce Hydropower Dependence
September 30, 2008 // Published as a news service by IHS
According to Frost & Sullivan, biomass power represents approximately 4.1% of the total installed capacity in Brazil and most biomass cogeneration is based on sugarcane bagasse.
At present, sugarcane bagasse cogeneration accounts for 3.03% of the total Brazilian energy matrix.
Recent analysis from Frost & Sullivan of Brazil's sugarcane bagasse for power generation found that the market reached 3.0 gigawatts (GW) in 2007, with estimates to reach 12.2 GW in 2014.
The Brazilian sugar and alcohol sector envisages to market electricity surplus to the national grid, analysts said. In order to produce marketable amounts of electricity, the sector is expected to invest in new technologies, including cogeneration equipment.
There is a clear trend toward the implementation of boilers with higher steam-production capacity. New boilers and steam turbines with higher capacity and efficiency would substantially increase the electricity surplus the plants could sell.
"The National Bank for Economic and Social Development (BNDES) has created several credit lines to finance power plants that require new equipment and upgrade in order to produce excess energy that can be sold to the national grid," said Julio Campos, an industry analyst at Frost & Sullivan.
"At present, there are 47 projects under BNDES and these have the potential to contribute 1.4 GW of cogenerated electricity to the national grid in 2008 and 2009."
However, unattractive prices are discouraging companies looking to sell their excess electricity to the national grid.
Analysts said Brazilian sugar and alcohol plants produce around 95% of their electricity needs, purchasing the remaining 5% from national-grade transmission and distribution (GT&D) companies. Plants claim that the prices they pay to those companies for this additional power are several times higher than the prices paid by GT&Ds for the plants' electricity surplus.
"Another significant restraint for the cogeneration market is the lack of connection to the electric grid," said Campos. "In addressing this, many sugarcane cogeneration-related associations, such as Associação Paulista de Cogeração de Energia (COGEN-SP- Paulista Association of Cogeneration) and Agência Nacional de Energia Elétrica (ANEEL) are working on building generation distributive center units that will collectively transmit electricity cogenerated in the mills and input it into the grid."
Structured tax and financial policies would serve as a driver for the expansion of sugarcane bagasse cogeneration technologies. Government and related regulatory agencies should develop clear planning and regulatory structures in order to boost cogeneration capacities in sugar mills. Analysts said this includes the easy and efficient connection to the grid, and the establishment of fair prices to pay back the high investments of the mills.
Source: Frost & Sullivan.