Bagasse, sweet success this time round?

Sugarcane being crushed in a rudimentary machine in Charsadda, a rural area near Peshawar, Khyber Pakhtunkhwa Credit: Mohammad Sajjad


Pakistan would gain much if it greatly scaled up its cogeneration fired by this sugar mill by-product. But is its new plan to do so more promising than previous failed initiatives, ask Rahimullah Yusufzai and Robert Stokes

After many false starts and delays, Pakistan appears to be ready to expand its bagasse-based cogeneration output.

It was in March, ahead of the country’s general election, which saw the first handover of one elected government to another, that a policy to scale up cogeneration through the use of sugar mills was announced by the cabinet’s Economic Co-ordination Committee. Pakistan is aiming to persuade its 83 sugar mills to start producing electricity on a commercial basis, The expansion would build on the experience of some pioneering cogeneration projects already built in Pakistan’s sugar sector, which have demonstrated such development is feasible.

The incentives planned by the government include an attractive upfront power purchase tariff and help towards capital financing.

A widespread sense of urgency exists among most political parties in Pakistan to overcome bureaucratic red tape and make use of every resource to generate electricity to meet the acute shortages that are causing social unrest, affecting industrial production and slowing down the economy.

For this reason the new policy ” framed within the Framework for Power Cogeneration 2013 Bagasse and Biomass, itself an annex to the government’s renewable energy policy ” is expected to be continued in the new government of Mohammad Nawaz Sharif and his Pakistan Muslim League (N) party, which came to power in the 11 May election.

One of the first things that the two-time former premier Sharif did when he came to power ” and even before assuming the position of prime minister ” was to set up a team of experts to come up with short and long-term proposals to tackle the country’s crippling energy crisis. Plans to diversify the sources of energy also came under discussion because the rising prices of fossil fuels are hitting the already depressed economy hard.

A few days later, Sharif’s younger brother Shahbaz Sharif called a meeting of government officials, sugar mills owners and experts to discuss proposals for electricity generation from bagasse, or crushed sugarcane. Shahbaz Sharif is the chief minister of Pakistan’s most populous and economically advanced province, Punjab. He gave a committee of government officials and members of the Pakistan Sugar Mills Owners Association (PSMA) until 29 May to finalise and submit a plan to this effect.

Previous attempts

However, this is not the first time that the Sharif brothers and others in power have focused attention on bagasse in a bid to diversify Pakistan’s energy sources. Four years ago, Shahbaz Sharif invited sugar mill owners to work out a plan for utilizing their plants and waste feedstock to fuel the cogeneration of electricity and heat on a commercial basis to meet the growing demand for energy. However, discussions stalled over issues such as setting the tariff for the electricity that the mills would produce and sell to the state-owned Water and Power Development Authority (WAPDA).

Today, the team of the Pakistan Muslim League (N), headed by Nawaz Sharif in the central government, and Shahbaz Sharif in the Punjab, appears keen to use every resource to produce more electricity and stave off protests by consumers. However, unluckily for them, the general election took place when the weather becomes hot and the demand for electricity increases. The two brothers were installed in power in the first week of June when the temperatures in most of the country rise to over 40à‚ºC and shortfalls in power reach phenomenal levels.

On 27 May, for example, the total generation from all sources, including hydro, thermal and nuclear, was 10,500 MW against a demand of 17,500 MW. Inevitably a series of load-shedding power cuts followed.

Promising option

The bagasse option does have promise, however. Pakistan is the fifth largest sugarcane producer in the world. Forty-five of its 83 sugar mills are located in Punjab, with most of the remaining mills in Sindh province and some in Khyber Pakhtunkhwa, which borders Afghanistan and was formerly called North West Frontier province. The total installed sugarcane crushing capacity in the country is around 65 million tonnes per season. Pakistan’s annual sugar production is reported to be 5 million tonnes.

In addition there are 19 distilleries that process the molasses by-product into ethanol. These have a combined capacity of around 400,000 tonnes. Until 2005 most of the molasses was exported but the situation changed as companies adjusted to the demands of the market and began exporting ethanol as a value-added product instead of molasses. Thus, some could now be used as a domestic power feedstock.

Villagers in Charsadda, in Khyber Pakhtunkhwa, carrying sugarcane stalks (left) and bagasse (right) Credit: Mohammad Sajjad

All the sugar mills have an in-house bagasse-based power generation capability but they use inefficient boilers and primitive back-pressure small turbines to generate power. A Punjab government official has said a sugar mill produces on average of 2″3 MW of electricity to meet its energy requirements. Hussain Ahmad Siddiqui, former chairman of the State Engineering Corporation, opined that a sugar mill crushing 2000 tonnes of cane daily could, if the waste is effectively harnessed, generate 11 MW of electricity. He said a mill could use 2 MW for its own consumption and sell the remaining electricity to the grid.

According to government officials and experts, it could be possible to produce 2000″3000 MW of electricity from local bagasse during the sugarcane crushing season, which normally begins in October and continues for about 120 days. However, last year the former chief official for the Ministry of Water and Power, Secretary Zafar Mahmood, was more conservative. He said Pakistan could generate 1500 MW of electricity daily by using bagasse once the sugar mills were able to acquire efficient machinery. Other government officials, such as Jehanzeb Khan, the secretary of the Punjab government’s energy department, feel a more realistic figure would be 800″1000 MW to begin with, which could be increased gradually to 1500″2000 MW.

Mill owners have said rice husk, cotton and wheat stocks, coal and other locally available raw materials could be used to generate electricity during the rest of the year.

A more appealing aspect of power generation by sugar mills would be to bring much-needed electricity to rural communities because the mills are mostly in those areas. The power would also be available during the winter, when hydropower is reduced due to the decreased flow of rivers. As one official put it, it would be nice to complement the country’s power generation by making available bagasse-generated electricity to the national grid at a time when there is less production of hydroelectric power, which is a major power source in Pakistan.

Slow progress

Although successive governments in Pakistan began paying attention to the potential of bagasse producing electricity many years ago, the progress in making this happen has been slow. In November 2005, the cabinet Economic Co-ordination Committee approved plans for increasing the existing capacity of the cogeneration power plants to 700 MW but, as with the more recent arguments on the issue in Punjab, the sugar industry was not keen as it wanted a higher tariff for power sales to cover the cost of investment for upgrading their boilers and related machines.

In January 2006, the government released its National Policy for Power Co-Generation by Sugar Industry, which offered incentives to sugar mills. However, only one major company showed interest, Fatima Sugar Mills. It wanted to build a dual-fuel power plant to generate 125 MW, using natural gas as a secondary fuel. The project, however, did not take off. The policy was revised in January 2008 in consultation with the PSMA, with government backing for a series of 60+ MW projects to produce a total of 1000 MW on a commercial basis by 2010 and doubling the capacity by 2012, yet Fatima’s project still stalled.

In June 2008, the National Electric Power Regulatory Authority (NEPRA) announced an indicative tariff of US$0.083/kWh for a period of 30 years of a project’s life. The PSMA however found it unacceptable. Subsequently, NEPRA offered an upfront tariff of $0.093/kWh, but the PSMA wanted $0.11/kWh.

These failures represent one reason why the outgoing Pakistan People’s Party-led coalition government has been criticised for neglecting the energy sector during its five-year rule after the 2008 general election. But on 8 February, towards the end of its rule, Chaudhry Ahmad Mukhtar, the water and power minister, presided over a meeting in Islamabad on the fast-track development of bagasse-based power generation projects. It aimed to approve a draft national policy for cogeneration by utilising bagasse and biomass ” the policy released in March.

Pakistan’s neighbour India can offer good practice on bagasse cogen if the new government succeeds in improving Indo-Pakistani relations. Here trucks unload sugarcane at the Khatauli sugar mill in Uttar Pradesh, India, which generates renewable heat and power from the waste bagasse

A delegation headed by PSMA chairman Shunaid Qureshi also attended the meeting and received assurances that a reasonable upfront tariff would be given for fast-track projects and the producers would have the option to sell electricity to distribution companies working under WAPDA or the Central Power Purchasing Agency.

The meeting heard that around 12 million tonnes of bagasse annually generated by the sugar mills should be used for cogeneration rather than being wastefully incinerated. It would reduce imports of costly furnace oil and save foreign exchange, the meeting also noted. It has been calculated by experts and the PSMA that $500 million could be saved in fuel costs by consumers if 2000 MW is generated from bagasse. The foreign exchange savings for the country through the use of this indigenous fuel in place of imported heavy fuel oil is said to exceed $1 billion annually.

Immediately after the election, NEPRA approved PKR10.5 ($0.11) per kWh as an upfront tariff for sugar mills utilising bagasse, and the Alternate Energy Development Board was tasked to progress bagasse-based projects under the government’s umbrella renewable energy policy. A NEPRA spokesman said at the time that the move could encourage sugar mills to generate around 1500 MW of electricity on a fast-track basis. Government officials and experts have calculated that the cost of hydropower is PKR2.50 ($0.02) per kWh while it is around PKR5 ($0.5) per kWh if gas is used to generate power. Electricity generated by standard thermal plants cost PKR14″18 ($0.14″0.18), while diesel-based generation costs PKR23″28 ($0.23″0.28) per kWh.

The high-pressure boilers of the flagship Almoiz bagasse-fired cogeneration plant Credit: D.I. Khan, AEDB

Scepticism remains

Some of the sugar mill owners remain sceptical of the government’s promises and wish they had been made earlier. Iskander Khan, a director at the privately-owned Premier Sugar Mills, Frontier Sugar Mills and Chashma Sugar Mills, in Khyber Pakhtunkhwa, says if NEPRA had offered $0.11 in 2008, “the sugar mills would have started operations by now, saving precious foreign exchange due to reduced demand for furnace oil”.

Khan also says his aim is to make electricity the main product and sugar the by-product of the sugar mills in due course. “We are producing enough electricity from bagasse to run our sugar mills and would be happy to produce more by installing pressure boilers, provided the tariff being offered is attractive,” he says. Lamenting the missed opportunities, he adds that the new government should streamline its policies and adhere to decisions taken in meetings with the corporate sector to overcome the crises facing the economy.

Javed Kiyani, who served as PSMA chairman from 2010″12, is also critical of the government for failing to offer a reasonable tariff to the sugar industry in the past. “The previous government was interested in projects [involving] rental power and those proposed by independent power producers,” he says, “as those in authority could demand commissions to fill their pockets. There was little interest in cheaper sources of energy and renewable energy projects.” He also points out that Pakistan has lacked a comprehensive sugar policy while neighbouring India devised one many years ago, increasing sugar exports and encouraging sugar mills to produce 3500 MW of electricity from bagasse and biomass.

According to Kiyani, Pakistan had the potential to substantially increase bagasse-generated electricity from the current 225″250 MW by pursuing realistic policies. “From the 48 million tonnes of sugarcane that is crushed, Pakistan produces 15 million tonnes of bagasse,” he says. “One tonne of steam is generated from two tonnes of bagasse. By installing high-pressure boilers in place of low-pressure [types], our sugar mills would be able to efficiently use bagasse for electricity generation and sell it to the national grid.”

When reminded that NEPRA had offered a better upfront tariff to the sugar mills owners by raising it from $0.098/kWh to $0.11, Kiyani says the 20% devaluation of Pakistani currency and the rising costs of machinery mean that the tariff had to be raised to make it competitive and attractive to the owners.

Kiyani and other mills owners also complain that they can no longer sell their surplus electricity to the national grid because NEPRA last year instructed the mills to first obtain a power generation licence. “More than 200 MW of our surplus electricity is being wasted as the mills couldn’t sell it last year,” he says, adding that mill owners did not apply for generation licences as they first wanted the tariff issue to be sorted out with NEPRA.

Good reception

Pakistan’s progress towards a more supportive policy for cogeneration in general and bagasse or biomass co-fired projects in particular has been welcomed by international groups promoting these forms of heat and power production.

“As our own reports show, there’s an abundant opportunity for the wider use of bagasse-based cogeneration in sugarcane-producing countries and to contribute substantially to high efficiency energy production, but this potential remains largely unexploited,” says Syed Hassan, programme director at the World Alliance for Decentralized Energy (WADE), which works to increase the market share of cogen and on-site renewables in the global power mix.

Hassan summarises the Pakistani situation in this way: “The government’s framework for power generation based on bagasse offers a very attractive power purchase agreement, high price per unit, tax holidays, accelerated depreciation, almost 20% return on investment, and import duty exemption on plants and equipment. The government agencies are also being directed to look at assistance with financing and feasibility studies.”

He adds that the time is ripe to raise global awareness of what Pakistan has to offer in this regard. “Bagasse and biomass power generation offers great potential for global vendors,” says Hassan.

Opportunities

Pakistan does have native companies that are more than capable of making equipment for cogeneration and on-site power plants that use bagasse, biomass or biogas produced from molasses. They include Descon Engineering, a Karachi-based multinational, which has worked worldwide to help equip cogeneration projects.

However, if the new policy unlocks new domestic projects and results in the upgrading of older generating equipment, there will be greater opportunities for foreign suppliers or designers of equipment such as stokers, boilers and steam turbines, and for consultants of various kinds.

As of 31 January, seven cogen proposals linked to sugar mills and totalling 585 MW were on the table, according to the private power and infrastructure board of Pakistan’s Ministry of Water and Power, with the majority in Punjab These are: JDWP/JSML’s 80 MW JDW project near Rahim Yar Khan; the Ramazan Energy/Sharif Group’s and Ramaz Sugar Mills’ 100 MW plant planned for Bhawana; Janpur Energy/RYK Mills’ 60 MW scheme at Rahim Yar Khan; Fatima Energy/Fatima Sugar Mills’ 100 MW proposal for Sanawan; CPL/CSML’s Chistia 65 MW project at Sargodha; Dewan Energy’s 120 MW plan for Dewan City near Sujawal in Sindh province; and Etihad Power Generation’s 60 MW facility for Rahim Yar Khan.

One UK turbine maker told Cogeneration & On-site Power Production that it would not currently consider Pakistan because of security concerns. However, foreign firms with recent direct experience of selling into the country include Brazilian equipment maker NG Metalurgica, which in 2005 made an HB 420 model 9 Type B multi-stage steam turbine for the Almoiz bagasse cogen project, a 27-MW facility generating power for Lahore-based Almoiz Industries’ Paharpur sugar mill, in Khyber Pakhtunkhwa.

The output of the NG Metalurgica back-pressure turbine is 12 MW, with rotation speeds of 9250 rpm for the turbine and 1500 rpm for other equipment. The steam conditions are: a temperature of 480à‚ºC, an inlet pressure 4500 kPa and an exhaust pressure of 300 kPa.

A separate condensing extraction turbo-generator of 15 MW for Almoiz was made in 2006 by the Guangzhou Guangzhong Enterprise Group of Guangzhou, China.

The Almoiz project demonstrates what scope there is to do business in Pakistan without necessarily being there. Descon Engineering, for example, provided two 80 tonnes/h, 6500 kPa high-pressure boilers for the plant. These were based on the latest designs from Eckrohrkessel of Berlin, Germany, which licenses out engineering designs to manufacturers worldwide. Similarly, ipro Consulting of Kalsruhe, Germany, was the engineering consultant on the project.

Det Norske Veritas Certification of Norway has conducted validation analysis and reports for bagasse and biomass cogeneration and on-site power production in Pakistan, and Ecoenergy of Sao Paolo, Brazil, has provided carbon market consultancy for bagasse cogeneration in Pakistan and South America.

First Climate of Zurich, Switzerland, a world-leading carbon asset management and consultancy company, was involved in a recent project that established cogeneration from biogas produced from molasses left over in sugar refining at Shakarganj Mills in Jhang, Punjab. While, GE Jenbacher of Austria, has supplied eight 1 MW JGS320 gas generators and the gas dehumidification unit for the project. A desulphurisation unit to sweeten the gas came from Denmark’s ScanAirclean.

Trailblazer projects such as Almoiz and Shakarganj could encourage other Pakistani sugar mills to consider new or upgraded cogeneration plants as part of the new government policy. And international suppliers and consultants may be encouraged to participate in such cogen projects in Pakistan because they know that external development agencies are likely to support the projects.These include international development financial institutions such as the Asian Development Bank, which already has in place incentives that include debt financing and meeting part of the cost of initial feasibility studies. Its priorities for co-operation and investment in Pakistan include the all-important energy security.

Rahimullah Yusufzai and Robert Stokes are freelance journalists specializing in energy matters. Rahimullah is based in Peshawar.

More COSPP Articles
Past COSPP Issues

No posts to display