1. Case study on Bagasse Energy Cogeneration in Mauritius by Dr
Case study on Bagasse Energy Cogeneration in Mauritius by Dr. Kassiap Deepchand Technical Manager Mauritius Sugar Authority

2. Content of presentation
Mauritius Sugar industry background
Bagasse Energy Development policy issues
- Sugar Sector Action Plan
- Sugar Industry Efficiency Act
- Bagasse Energy Investments
- Institutional set up
- Constraints to development
Bagasse Energy projects

3. Content of presentation (ii)
Electricity export
Participation of stakeholders
Project implementation experience
Technology transfer options/lessons learnt
Concluding remarks

4. Mauritius: Selected Indicators
Population (million): 1.1 (2000)
Area (km2): 1,865
Capital City: Port Louis
GDP Growth Rate (%): 7 (2000)
GNP per Capita (US$): 3,600 (2000)
Official Exchange Rate: MRs = 1 US$ (Dec, 2001)

5. Mauritius: Selected Indicators (ii)
Economic Activities: Agriculture, commerce, financial services, construction, textile manufacture, tourism
Energy sources: Hydro, Bagasse, Solar, imported petroleum, imported coal.
Installed capacity (MW): 498
Electricity consuption per Capita (kWh): 1,156 (2001)
Electricity generation (GWh): 1,424 (1999)
System Losses (%): 10.8 (1999)

6. Mauritian Cane Sugar Industry
Introduced by Dutch - 17th Century
Production reached - 650,000 tonnes
Major net foreign exchange earner
Provided industrial base for emergence of Mauritius as a semi-industrial society
Ensured economic growth and social stability

7. Sugar Production/Exports
Target: 650,000 tonnes
Export:
Sugar Protocol (ACP/EU) - 506,000 t
Special Preferential Sugar Agreement (1995) - 40,000 t
USA - 12,000 t
Other Market - 8,000 t
Local Market - 38,000 t

8. Cane Land Area/Ownership
Total area - 186,000 ha
Area under cane - 75,000 ha
Miller Planter - 55% or .. Ha
Number - 21
Size of holdings to 5,500 ha
Small Growers - 45% or .. Ha
Number - 35,000
Size of holding to 10 ha

9. Cane Sugar Industry - Background
CROP 1998
Area under Tonnage of
Cane Sugar
Ha % T %
Small Planters (<5 ha)
Large Planters
Miller Planters
Miller
Total

10. Sharing of Sugar /By-products
Growers Millers
% %
Sugar
Molasses
Filter Mud
Bagasse*
*Out of a Bagasse Transfer Price Fund for Rs100/t used for electricity export

11. Energy Status - Mauritius
No oil, gas or coal reserves
Renewable energy - hydro and sugar cane
Hydro - 10 MW (fully exploited)
Sugar Cane million tonnes
Imported diesel, coal and gas

12. Evolution in Energy Demand
Sharp level of increase due to:
Expansion in EPZ and tourism;
Quality of life improvement.
Annual increase:
Over 11% in consumption;
9.5% in maximum demand.

13. Sugar Sector Action Plan (1985)
Reason:
Rising demand in Preferential Market
Rapid price increase as from 1975
Subsequent fall in price
Profitability threatened
Export duty increase
Climatic conditions (cyclone/drought)

14. Sugar Sector Action Plan (ii)
Objective:
Restructure to maintain viability
Modernise production both at field/factory
Export duty relief
Centralisation
Energy from bagasse

15. Action Taken Add. Prod. speciality sugar Improve irrigation techniques
Adoption of derocking/mechanisation
Intensity research (variety/efficiency in field operations)
Value added products, e.g. electricity

16. Sugar Industry Efficiency Act(1988)
Objective:
To provide for an efficient and viable sugar industry
To promote agricultural diversification and diversification within sugar

17. Sugar Industry Efficiency Act (ii)
Introduction of performance linked export duty rebate related to:
(a) Improved sugar recovery
(b) Enhanced use of bagasse for energy
(c) Use of cane interline/rotational land for foodcrops
Income tax
Incentives for speciality sugars, investment in energy saving and investment in bagasse electricity

18. Investment Options (i) Utility to add 2 x 24 MW (fuel oil)
(ii) Utility to invest in MW coal plant
(iii) IPP for 2 x 22 MW bagasse/coal plant
Option (iii) was adopted in that:
It would displace public sector investment
It was economically more attractive

19. Definition of Cogeneration
Energy system sequentially generating electrical power and thermal energy
System common in cane sugar industry for a very long time

20. Bagasse Energy and Sugar Production
Sugar Sector Action Plan:
Emphasis on bagasse energy
Active collaboration between Government and Private Sector
Formulation of appropriate enactments (SIE Act)
Industry presented a programme of investment US$130M for factory modernisation/irrigation/diversification inc. US$27M w.r.t bagasse energy

21. Bagasse Energy Development Objectives
Optimise bagasse electricity for export with increase from 70 to 120 GWh implying a 22 MW bagasse/coal plant
Use of cane field residues for additional electricity from cane biomass

22. Bagasse Energy Development Benefits
Maintain long-term viability of sugar sector
Increased investment in rehabilitation/modernisation
Ensure continued viability of sugar sector
sustained commitment for Sugar Protocol
Saving on fossil fuel import
Saving on boiler/turboalternator investment equivalent of 50% investment in sugar factories

23. Bagasse Energy - Investments (US$80M)
2 bagasse/coal plant at 2 regional factories
Energy conservation in cane processing
Bagasse saving and transport to central power plants
Investment in transmission lines

24. Projected Capital Investment US$55M
22 MW power - US$24M
Bagasse Saving - US$18M
Studies on Cane Field Residues - US$1.6M
Bagasse Transport Studies - US$1.3M
GEF Grant of US$3.3M

25. Institutional Set-Up (i) Regulatory framework:
- to promote private sector investment in power production and factory modernisation
- to encourage efficient bagasse market
- to attend to energy pricing/contracting
(ii) Setting up of an ad-hoc technical committee comprising of MSA/Ministries of Public Utilities/Finance/and Economic Planning
(iii) Setting up of a BEDP Coordination Unit at MSA

26. Constraints to Bagasse Energy
1. Price of bagasse (based on coal kWh at condensing mode)
- Consolidation of milling activities excluding transport of bagasse
2. Funding and fiscal framework (huge capital required)
- Enactments to induce investments e.g. tax free debentures, segregation of growing/milling activities w.r.t bagasse energy

27. Constraints to Bagasse Energy (ii)
3. Centralisation of cane milling activities
- Reduction in number of mills closing of small ones in favour of higher capacity
4. kWh price - based on avoided costs (Technical Committee)

29. Table 1 -Bagasse based Power Plants in Mauritius up to year Factory Tonne Power Start Date Units from Units from Total Units cane per Bagasse Coal from Bagasse hour & Coal (GWh) (GWh) (GWh) FUEL 270 F Oct Deep River/ Beau Champ 270 F April Belle Vue 210 F April Médine 190 C Mon Tresor/ Mon Desert 105 C July Union St Aubin 150 C July Riche en Eau 130 C July Savannah 135 C July Mon Loisir 165 C July Mon Desert Alma 170 C Nov Total 3 F 360 GWh 420 GWh 780 GWh 7C 235 GWh F GWh C F = Firm or Bagasse during crop and Coal during intercrop C = Continuous or Bagasse during crop season only

30. Table 2 -. Evolution of Bagasse (in tonnes)
Table 2 - Evolution of Bagasse (in tonnes) saved and sold to firm power plant Factory DRBC Beau Plan Belle Vue Constance MDA Mon Loisir Britannia Riche en Eau

31. Evolution of sugar industry electricity export (1989 – 2002)

32. Bagasse Transfer Price Fund (BTPF)
Comprises of 2 elements:
Sale of electricity to the grid
Sale of bagasse for purposes other than sugar manufacture

33. Bagasse Transfer Price Fund (BTPF)
Accruals to BTPF
Electricity
kWh exported x Rs100/t bagasse = A
Conversion Factor
for continuous, factor was 360 kWh/tonne
bagasse up to year 1995 and subsequently 400 kWt/tb
for firm, factor is 440 kWh/t bagasse
- Other uses – weight of bagasse x Rs100 = B
BTPF = A + B

34. Sugar Investment Trust (SIT)
Instituted in 1994
Shareholders
Employees of sugar industry and institutions
Cane growers

35. Sugar Investment Trust
Share Ownership of:
20% in all milling companies
14% in 70 MW CTBV power plant
20% in 38 MW plant at FUEL
10% in 24.5 MW at DRBC
Dividend paid
1999 4%
1998 6%

36. 50% of BTPF in proportion to share of electricity
Sharing of Revenue
For cogenerator % income tax free
50% of BTPF in proportion to share of electricity
exported
For non miller-planters % of BTPF prorata on sugar production
For miller-planters % of BTPF prorata on sugar production
For SIT shareholders Share of dividend

37. Project Implementation Stages
1. Government policy definition on bagasse energy
2. Energy conservation measures and use in sugar factories
3. Public utility to establish energy demand forecast
4. MoU between utility/sugar company
5. Conduct of feasibility study
6. Signing of PPA

38. Project Implementation Stages (ii)
7. Raising of funds (PPA as bank guarantee)
8. Detailed design
9. Tendering for supply of equipment
10. Evaluation of tenders
11. Award of contract
12. Erection/Commissioning
13. Operation

39. Technology Transfer Opportunities
Mauritius has acquired an indigenous experience on bagasse energy
- 10 power plants of which 3 export firm power (coal and bagasse) and 7 export continuous power (bagasse only)
- All plants located within 1,860 km2 and are easily accessible
- Can share the experience inc. visits

40. Cane Sugar Industry Mauritius/Fiji
Land area (km2) 1, ,000
Arable area (ha) 95, ,000
Area under cane 75, ,000
Cane production (x106)
Land ownership Private Tenant
Mill ownership Private Government
No of mills
Crushing capacity (daily)1,600-7,000 N/A
Bagasse energy 10 plants 2 plants

41. Lessons Learnt/Recommendations
- Bagasse based electricity linked with sugar as well as with power sector
- Government support and clearly defined policy on bagasse as a substitute to fossil fuel
- Full participation of all stakeholders right from conception to implementation with World Bank acting as “honest broker”

42. Lessons Learnt/Recommendations (ii)
- Detailed feasibility with proper cost estimate to avoid delay in implementation
- Bagasse/coal power plant associated with environmental advantages and benefit the sugar industry and the country at large
- Bagasse saving and transport to central power plant is not advisable - rather cane milling operations should be centralised

43. Concluding Remarks Mauritius
successfully implemented bagasse energy cogeneration on a commercial basis
attributable to be the various entrepreneurs operating in an environment with clearly defined Government policy

44. Concluding Remarks
But this success could have been jeopardised
were it not the participation and involvement of all the stakeholders in the sugar industry especially the most vulnerable partners like the employees and the small cane growers.
Government, through legislation and establishment of the Investment Trust coupled with the collaboration of the entrepreneurs has created the necessary environment which has led to the success of bagasse energy cogeneration.