International Research Journal of Engineering and Technology (IRJET)
e-ISSN: 2395-0056
Volume: 11 Issue: 10 | Oct 2024
p-ISSN: 2395-0072
www.irjet.net
Economics Feasibility Study of Combustion-Based Small-Scale Biomass Power Plant in Northern Ethiopia Limat Teklay Gebremariam1, Fentahun Abebaw Belete2*, Tesfaldet Gebregerges Gebreegziabher3 1Department of Chemical Engineering, African Youth for Peace and Sustainable Development, PO Box 1313, Mekelle,
Ethiopia 2Department of Chemical Engineering, Ethiopian Institute of Technology-Mekelle, Mekelle University, PO Box
Mekelle, Ethiopia
231,
3Department of Chemical Engineering, Tigray Institute of Policy Studies (TIPS), Mekelle, Ethiopia
***
Abstract Biomass has emerged in the renewable energy area with a high potential to contribute to the energy needs of both industrialized and developing countries. This study aims to analyze the techno-economic feasibility study of a combustion-based small-scale biomass power plant in Northern Ethiopia. The power plant’s economic feasibility was analyzed, in terms of the payback period (PBP), Internal Rate of return (IRR), net present value (NPV), and profitability index from the developed discount cash flow spreadsheet for different financing conditions (i.e., for FIT incentive scenario and 5% escalation without incentive Scenario) over the plant lifetime period of 30 years. The technology readiness level of the proposed technology was assessed as almost >TRL-6 (Technology readiness level). The economic result showed that the investment in the power plant is positively justified. The net internal return value is 25.58% which is three times greater than the discount rate of this project (8%) and is an acceptable value. The payback period of the investment is 4.15 years in the operational life of the plant and the rate profitability index is 2.61%. Hence, for the projected 30-year operational period of investment, installing a small-scale combustion-based power plant is feasible in the FIT incentive and escalated scenarios. From the sensitivity analysis, capacity factor and net efficiency changes have almost close impact on the cost of electricity. Maintenance cost has a relatively lower impact on the cost of electricity (COE) compared to the other factors. Keywords: Biomass, Combustion, Power plant, sensitivity analysis, White eucalyptus
1. INTRODUCTION The world's energy supply has been influenced by fossil fuels for decades, which account for approximately 80% of total consumption of more than 400 EJ per year. From this, biomass accounts for approximately 10–15% of this demand. On average, biomass accounts for about 9–14% of the total energy supply in developed countries such as the United States, and it accounts for about one-fifth to one-third in developing countries (Khan et al. 2009). Biomass fuels can be classified into four main categories based on their origin. 1) primary residues; which include by-products of food crops and forest products (wood, cereals, maize, etc.); 2) Secondary residues; which include by-products of biomass processing for the production of food products or biomass materials (saw and paper mills, food, and beverage industries, apricot seed, etc.); 3) Tertiary residues; that includes by-products of used biomass-derived commodities /waste and demolition wood; and 4) Energy crops (IFC 2017; Khan et al. 2009). Hence, biomass is considered a fundamental source of energy, especially in sub-Saharan countries such as Ethiopia. Ethiopia is suffering from significant depletion of domestic biomass resources. Therefore, the development of appropriate institutions and technologies to produce renewable energy from biomass is extremely valuable (Diriba Guta 2012). The development and use of biomass power plant systems improve the mitigation of significant health risks through reduced air, land, and water pollution. This technology also improves waste management, nutrient recycling, job creation, the use of surplus agricultural land and modern energy sources in rural areas, and improves land management in countries that have adopted it by law. The economic analysis of the energy potential of biomass has already been studied by many researchers, and the main conclusion is that the viability of biomass projects is influenced by local conditions at the project site, including biomass waste raw material cost, biomass logistics cost, costs of ash disposal, and labor costs (Abdelhady, Borello, and Shaban 2018). Even if it is an ultimate solution for the problem of managing waste and at the same time recovering energy with high stability of power generation and high total energy conversion efficiency, no clear policy regarding biomass power generation in Ethiopia has been announced so far. Therefore, this study aimed at the evaluation of economic feasibility and technological efficiency, availability, affordability, and maturity of the power plant in Northern Ethiopia particularly in the Tigray Regional State.
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