As part of the incentive program within the South African government, a biomass plaint with a capacity of 17.5 MW has been selected as the latest renewable energy project. Building Energy, an Italian organization focusing on the production of energy from renewable resources, will lead the completion of a biomass plant, which will have a short supply chain in South Africa.

The allocation of this project is part of the third round of an incentive program of energy production from renewable resources promoted by the county's Ministry of Energy. The biomass plan by Building Energy was the only one selected by local authorities and the first to provide base load power under the Department of Energy Renewable Independent Power Producer Procurement Program (REIPPP).

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The plant, which will be positioned in Mkuze, in the country's North Eastern region, will hold a capacity of 17.5 MW and will be fueled by a combustion of sugar cane tops and leaves biomass producing 132,000 MWh per annum. Charl Senekal Suiker Trust (CSST) is the main private sugar producer in South Africa and plants more than 3,500 hectares of irrigated sugar cane in Mkuze and Pongola and produces 360,000 tons of finished product annually.

Building Energy will be a shareholder of this project with a number local investors including BE, CSST H1 Holdings and Mkuze Local Community Trust, whereas Rand Merchant Bank will be the Mandate Lead Arranger for the Project Finance. The plant's overall value is estimated to be around $100 million.

The project will involves (construction set to begin July 2014) around 100 local technicians, whereas 240 more will work in the departments connected to the plant after the activation, expected at the end of 2016. Furthermore, it will have local components to the tune of 40 percent of project value.

“We are very satisfied for this new assignment in South Africa,” said Fabrizio Zago, Building Energy CEO. “During the first round of the program our project involving a 81 MW photovoltaic system in the Northern Cape region had already been selected, which is currently being built and will end in August 2014.”

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The key difference between biomass and solar or wind energy is that biomass requires fuel. “Unlike typical renewable-energy plants, which rely on freely available wind and solar resources, a biomass plant requires a reliable long-term fuel supply agreement with a creditworthy fuel supplier,” says Musso.

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Italian company Building Energy has been named preferred bidder for a 17.5MW biomass plant in South Africa.

The facility was the only biomass scheme selected under the third round of the South African government’s Renewable Energy Procurement Programme and construction is expected to kick off in July 2014.

The $100m plant will be sited in Mkuze, in the north-east of the nation, and Building Energy said “local components” would account for some 40% of the project value.

The facility will be fuelled by sugar cane tops and leaves and is slated to go live in 2016.

“We are very satisfied with this new assignment in South Africa,” said Building Energy chief executive Fabrizio Zago.

Building Energy is working with Charl Senekal Suiker Trust, South Africa’s main private sugar producer.

It will be a shareholder in the project with a number local investors including BE, CSST H1 Holdings and Mkuze Local Community Trust. Rand Merchant Bank will be the mandate lead arranger for project finance.

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A study conducted on the country's biomass processing for energy production indicated that biomass from bush encroachment is a prospective fuel source by saving of fossils fuels, securing of agricultural productivity and preserving the environment.

The study was conducted by STEAG Energy Services GmbH in colaboration with Transworld Cargo between February and October 2013 on a budget of N$1 million. The results of the study where presented to stakeholders by researchers of STEAG Energy Services on Thursday morning this week. According to statistics provided by the study, bush encroachment affects 26 million to 30 million hectares of farmland and is estimated to cause overall economic losses of N$ 1.6 billion a year.

However, at the same time, bush encroachment constitutes an immense economic opportunity as well as a potential energy asset. Biomass as a national energy source has great potential to play a major future role in the national energy supply of the country. Effective debushing programmes not only contribute to increase agricultural productivity, they also have an effect on improving the national energy supply base, which has the potential to increase self-sufficiency in energy and to bridge a demand gap of energy supply expected to take effect as of 2016. The national energy generation capacity in the country totals up to approximately 500 mW and even with the recent upgrading of the Ruacana power station, the country's own production of power is not sufficient for the total national power demand. Even more so is the fact that a high amount of electricity is imported from neighbouring countries which is said to be cheaper than the self-production as a result of higher local power productions costs. According to the study, in order to avoid a possible demand gap from the year 2016 onward, new power generation capacities have to be realised. This includes rehabilitating the Van Eck power station near Windhoek. This project is expected to be completed in 2014/2015.

The identified biomass utilisation options focus on local consumption and export opportunities. Findings show that local utilisation of biomass for power generation is based on favourable "leveled costs of energy production" which are in the range of N$1.0 to N$1.1 per kilowatt hour.


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South Africa’s sugar industry has proposed that 20.4 billion rand ($2.1 billion) be invested in 15 cane-fueled power projects to help address electricity shortages in the continent’s largest economy.

The projects could create as many as 712 megawatts of capacity and 37,786 jobs, the South African Sugar Association said in a written presentation to Parliament’s energy committee today. Implementation is contingent on the government agreeing to power-purchase agreements that will cover fuel and operating costs and provide for an appropriate return on capital, it said.

State-owned Eskom Holdings SOC Ltd. currently supplies about 95 percent of South Africa’s power. Electricity shortages caused mines and factories to shut for five days in 2008 and demand is currently close to outstripping supply. Today, peak electricity usage is forecast to exceed capacity by 7 megawatts, Eskom said. One megawatt is enough capacity to power 500 to 1,000 homes.

South Africa’s 26,600 sugar farmers produce about 2.2 million metric tons of the sweetener a year, earning revenue of about 12 billion rand, the industry association’s data show. The country has 14 sugar mills that produce sufficient power to meet their own needs from bagasse, a byproduct from cane that remains once the juice has been extracted.

The plants could invest in bigger and more efficient boilers and sell excess electricity to other users, according to the association.

Illovo Sugar Ltd. (ILV), is South Africa’s biggest sugar producer by output and market value.

The country will face a capacity shortfall of at least 700 megawatts next year that will have to be met by encouraging co-generation by companies and economizing, according to the South African National Energy Development Institute, a state research body.

While waste from sugar, pulp and paper plants has the potential to produce 1,500 megawatts of power, industries have no incentive to increase generation because of a lack of off-take agreements and tax incentives, Kadri Nassiep, the institute’s chief executive officer, told the energy committee.

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Before South Africa exports citrus fruit products, they first have to be processed and that consumes lots of energy. One juice factory has replaced harmful coal with eco-friendly sawdust to power its operations.

Project type: Switching from coal to biomass to slash CO2 emissions

Project size: Biomass is currently used to power the oven that dries fruit peels, but soon it will also power the juice boiler. 16,000 tons of biomass will be used every year.

CO2 Savings: 101,000 tons of CO2 emissions in the next 10 years

Project volume: The first phase (purchasing new drying ovens) cost 4.5 million South African Rand ($454,889), the second phase (purchasing new steam boilers, transitioning from coal to biomass) will need another 18 million Rand ($1.82 million)

So far, South Africa’s largest citrus juice producer, Letaba, has been a major polluter, using almost 11,000 tons of coal each year to power its production operations and drying ovens. Now, it’s switching to a more sustainable source of energy – sawdust from neighboring lumber mills. It’s already being used to fire the drying ovens which are used to process the fruit peels. The company aims to completely switch to biomass in the long term. That is in line with South Africa’s attempts to play a leading role in climate protection and meet ambitious goals to slash CO2 emissions levels by one third by the year 2020.

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WALNUT, Calif., June 6, 2013 /PRNewswire/ -- VIASPACE Inc. (OTCQB: VSPC) today provided an update on the status of Giant King(TM) Grass growing in South Africa. Previously, the company announced that it had signed a project agreement and received funding from Selectra CC of Johannesburg, South Africa, and that Giant King Grass was delivered and planted in South Africa.

The first project for Selectra is to remediate and also produce energy on land that has been altered by gold mining in South Africa. Mining is a very large industry in Africa, and there are numerous large tracts of mine affected lands. For example, gold mining produces large amounts of ore from which the gold has been extracted. There are thousands of hectares of these "mine dumps" or more correctly stated, slimes dams and mine tailings (the footprint that remains after a slimes dam has been removed for further processing).

The slimes dams are composed primarily of crushed rock that has been processed to remove the gold. It is not suitable soil and has minimal organic matter. There are traces of chemicals and contaminants from the gold processing. The mining companies are responsible for ensuring that these contaminants do not enter into the groundwater or are transported outside the dam itself by wind or erosion. They must maintain these slimes dams indefinitely until they are no longer a hazard.

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As the price of biomass fuels becomes more competitive, compared with traditional fuels such as coal, oil and gas, the demand for biomass-fired boilers is steadily increasing. Subsequently, this has created a growing need for the manufacturing of boilers for these cleaner and more sustainable fuels, states boiler designer and manufacturer John Thompson (JT).

As a result of the interest in biofuel combustion, for both existing and new boilers, the company has initiated a programme that establishes the combustion characteristics of each particular fuel.

“With this information, our engineers can advise our customers on expected performance and any modifications that an existing plant needs to efficiently burn a particular fuel. The company’s Thompson Europac test boiler is a standard coal-fired design and, with minor software and stoker modifications, we have been able to fire most of the biofuels tested successfully,” says JT Package Boilers technical manager Neville Sharwood.

The test boiler is installed at JT’s Boiler Development & Training Centre, in Bellville, Cape Town. This facility is dedicated to training customers’ staff and developing JT’s products. Between training courses, the boiler is available to the research and development engineers for the development of new products and the testing of various fuels. The boiler features a programmable logic controller-based combustion management system and all the necessary instrumentation to collect test data.

The programme to test the combustion characteristics of each type of fuel involved a series of tests, firing a variety of biomass fuels at sites in South Africa and with JT’s test boiler to enable JT engineers to establish the most efficient combustion settings for each fuel type and understand the limitations of the fuel on existing equipment.

Biomass fuels tested include wood pellets, woodchips, wood pucks, grape pomace, nutshells, sunflower seed husks, corncobs, dried hops and torrefied biomass.


The tests measure the combustion efficiency and fuel gas losses. This information is used to predict the performance of an existing plant. Parameters, such as grate rating and furnace volumetric heat-release rates, are calculated from the test results and are useful in sizing a new plant to ensure that a boiler operates efficiently.

“Under efficient combustion conditions, steam outputs of between 50% and 85% of the coal-fired output were recorded during firing of the biomass fuels. As many boiler installations have surplus capacity, the existing boilers could be converted from coal to biomass firing without having to buy additional boilers,” he highlights.

Sharwood adds that biofuels typically have lower calorific values than coal; therefore, the mass of the fuel has to be increased to generate the same quantity of steam when fired using a coal-fired design.

“On existing coal-fired equipment, maxi- mum output will be reduced when firing a biomass fuel. But there is often spare capacity in an existing plant that allows for a simple fuel switch to take place. Dependent on the biomass, the materials handling system may need changing, but many of the biofuels tested were adequately conveyed by the existing coal handling equipment. JT is looking into designing a range of boilers optimised around the biomass combustion parameters,” he explains.


Biogas is produced from the treatment of wastewater in certain industries and can offset 10% to 25% of fuel requirements in the production of steam. Several JT biogas boilers have been supplied to the local market, which have reduced customers’ carbon emissions and reliance on fossil fuels.

The high outputs achieved during the tests were largely owing to JT’s modified chain- grate stoker and Micropac boiler management system, which can easily be fine-tuned for different fuels. Both of these can be used to retrofit existing coal-fired boilers when changing from coal to biomass.

Upgrades to and conversions of existing plants can be engineered by JT to achieve optimal boiler efficiency and emissions in compliance with the National Environmental Management: Air Quality Act, No 39 of 2004.

“We have several packaged boilers in the field specifically for the burning of biomass. We have supplied more than 50 small wood-fired boilers, ranging from 3 t/h to 6 t/h, in the last ten years, especially to com- panies in sub-Saharan Africa. We have customers operating large sunflower-seed-husk-fired boilers and a large project, coming on line soon, that will burn a mix of coal and husks,” Sharwood concludes.

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LONDON -- Driven by aggressive biofuel mandates, rapid industry growth will cause great strain on biomass by 2030, according to analysis firm Lux Research. A report from the firm says that, using today's technologies, an area the size of Russia would need to be cultivated to replace all petroleum used for chemicals and fuels, and feedstock innovation will be needed to keep growing biomass's market share.

But the future doesn't look grim for biofuels, according to Kalib Kersh, Lux's bio-based materials and chemicals/alternative fuels analyst. Kersh told REW that he believes some developers will deliver the needed innovation, though others will founder. “When cellulosic pre-treatment technologies come to commercial viability in the next several years, biofuels and biocemicals producers will have new options for feedstocks,” he said. “In turn that will create a new variation of agriculture, stimulating biomass production in a very efficient way.” And Kersh saw more investment in the bioenergy sector in 2012 than ever before.

When Stresses Bite

Today biofuels and biochemicals need more than one billion metric tons of material per year to replace 3 percent of total petroleum products, according to Kersh. “By 2030 this number will soar to 3.7 billion metric tons,” he said. To meet this growing challenge, measures will be needed such as crop modifications, new value chain configurations and agronomic technology improvements like irrigation and biosensors.

Kersh is “cautiously optimistic” that these measures will be taken - although particular regions could be problematic. What will happen if industry innovation doesn't materialize to the levels necessary to avert a crisis? Kersh said his research had led him to conclude that Japan, North America and Brazil would end up being importers of biomass. “It's almost impossible to see it happening otherwise”, he said. And he warned that “it's always possible that some of these countries will backpedal on their mandates”, although he cautioned that it's too soon to tell.

Costs Can Be Lowered

New logistics methods could lower costs, according to the report. Alternative fuel companies such as Sweetwater Energy and BlackGold Biofuels are developing 'hub-and-spoke' models to build satellite intermediate conversion facilities that feed into a central processing facility, cutting transportation costs. According to Kersh, the largest contributing cost in bioenergy production is the feedstock. Other contributors to cost are in harvesting, processing, transport and, in some cases, storage.

The Public Opinion Factor

It may surprise some that the biofuels market appears to be burgeoning despite widespread public debate over food vs fuel and destruction of the world's rainforests. Kersh shed some light on the issues: “For one thing,” he told REW, “sugar cane in Brazil is actually grown far from rainforests; it needs a fairly dry environment for part of the growing season.”

In terms of the food vs fuel debate, Kersh believes that “some disingenuous players” have been making much of the issue, but that it “doesn't make that much sense”.

“The issue of food security needs to be dealt with head-on, not in an indirect way by attacking biofuel,” he said. “There is plenty of grain and plenty of foodstuffs for everybody; the problems are not a matter of supply.”

In the US, he said, the American Petroleum Institute has exerted efforts to eliminate the Renewable Fuel Standard (RFS2). "The irony of that," said Kersh, "is that use of ethanol frees up other petroleum-derived blend-stock fractions for higher-value sale to other, non-fuels markets."

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South Africa’s Sugar Association is in talks with the nation’s government about using bagasse, a byproduct from cane, to generate power and help stem a shortage of electricity in the country.

“It is being worked on with government and hopefully, in the next couple of months, something will come up,” Trix Trikam, the association’s executive director, said in a March 5 interview. “We are at a crucial stage of discussions now.”

South Africa, where chronic electricity shortages led to the suspension of mines and factories in 2008, has embarked on a program to boost generation by awarding contracts to build wind, solar and biomass plants. Bagasse, the part of sugar cane that remains once the juice has been extracted, isn’t regarded by the government as a renewable source of electricity, according to Remgro Ltd. (REM)’s TSB Sugar Holdings unit, which supplies 2 megawatts to 7 megawatts to the country’s grid.

“We could make about 1,000 megawatts, but a lot of capital investment will be needed,” Trikam said. “So we’ll have a lot more electricity that we can put on the grid to be used by South Africans.”

One megawatt is enough electricity to power about 1,000 U.S. homes.

South Africa, which has the continent’s biggest economy, is seeking 3,725 megawatts of power from renewable sources. The deadline for companies to submit bids in the third of five bidding rounds has been postponed to Aug. 19 from May, according to the Department of Energy’swebsite on the program.

Invest MoreSugar millers, which already generate power to run their operations, are willing to invest to produce more energy, Trikam said.

“We can make those boilers much more efficient and we can invest money in bigger boilers,” Trikam said. “You’ll get much more electricity, which we can put on the grid to be used by South Africans.”

The country is Africa’s biggest producer of the sweetener. Output of saleable sugar fell to 1.82 million tons, the lowest in 17 years, in the 2011-12 season after a two-year drought in the KwaZulu-Natal province cut yields, Trikam said.

Sugar output by the industry, which directly employs 79,000 people, has climbed to 1.96 million tons in the 2013 season, Trikam said.

Tongaat Hulett Ltd. (TON) is South Africa’s largest sugar producer by market value. Illovo Sugar, another producer in the country, also has operations in Malawi, Zambia, Tanzania, Swaziland and Mozambique.

Raw sugar for May delivery gained for a fourth day, adding 0.1 percent to 18.78 cents a pound on ICE Futures U.S. in New York yesterday.

To contact the reporter on this story: Tshepiso Mokhema in Johannesburg attmokhema@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net