BioMass Report 06+2017 PDF

Converting Biomass to Energy
A Guide for Developers and Investors
IN PARTNERSHIP WITH
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Converting Biomass to Energy
A Guide for Developers and Investors
2017 June
CONTENTS
Definitions and Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xii
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii
1 Introduction to Biomass-to-Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 Project Development Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3 The Biomass Resource . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4 Securing Biomass Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5 Energy Conversion Processes .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6 Plant Design and Permitting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
7 Procuring the Biomass Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
8 Construction and Commissioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
9 Operation and Maintenance of Biomass Plants .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
10 Regulatory Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
11 Commercial Aspects .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
12 Typical Investment and Operation and Maintenance Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
13 Financial and Economic Analyses .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
14 Financing Biomass Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
15 Environmental and Social Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
16 Lessons Learned from Biomass Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
Appendix A: Screening List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
Appendix B: Characterization of Biomass . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
Converting Biomass to Energy: A Guide for Developers and Investors iii

LIST OF FIGURES
Figure 2-1: Main Contracts for a Biomass-to-Energy Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Figure 2-2: Stakeholders of the Biomass Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Figure 2-3: Project Development Stages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Figure 2-4: Project Implementation Stages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Figure 2-5: Typical Contents of a Pre-Feasibility Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Figure 3-1: Flow Chart of Biomass, from Field to Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Figure 3-2: Biomass Classification .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Figure 4-1: Calculation Methodology for Biomass Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Figure 4-2: Seasonality of Agricultural Crops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Figure 4-3: Map of Distance from Biomass Resource to Project Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Figure 5-1: Overview of Biomass Conversion Technologies and Their Current Development Status . . . . . . . . . . . . . . . . . 33
Figure 5-2: The Biomass Combustion Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Figure 5-3: Combustion Process on a Sloping Grate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Figure 5-4: Straw-fired CHP plant: 35 MWe and 50 MJ Per Second of Heat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Figure 5-5: Traveling Grate Principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Figure 5-6: Vibrating Grate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Figure 5-7: Step Grate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Figure 5-8: Principle of BFB and CFB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Figure 5-9: Bubbling Fluidized Bed Boiler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Figure 5-10: Evaporator Circulation System, P.K. Nag, Power Plant Engineering .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Figure 5-11: Typical Water Tube Boiler Arrangement, P.K. Nag, Power Plant Engineering . . . . . . . . . . . . . . . . . . . . . . . 43
Figure 5-12: Water-Steam Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Figure 5-13: Illustration of a Steam Turbine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Figure 5-14: Principle of a Typical Organic Rankine Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Figure 5-15: Principle of Connections to an ORC Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Figure 5-16: Illustration of Electrical Efficiency as a Function of Cooling Water Temperature . . . . . . . . . . . . . . . . . . . . . 48
Figure 5-17: Layout of a 1 MWe ORC Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Figure 5-18: MWe Biomass-driven ORC Unit .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
iv Converting Biomass to Energy: A Guide for Developers and Investors

Figure 5-19: Illustration of the Layout of a Biomass ORC Plant Including Biomass Boiler,
Fuel Silo, and Some Auxiliary Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Figure 5-20: A 1 MWe Biomass ORC Plant in Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Figure 5-21: Illustration of a Multicyclone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Figure 5-22: Illustration of a Venturi Scrubber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Figure 5-23: Detail of an Electrostatic Precipitator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Figure 5-24: Baghouse Filter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Figure 5-25: The Waste Hierarchy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Figure 5-26: Cooling Tower from a Mexican Sugar Mill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Figure 5-27: Industrial Cooling Towers for a Power Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Figure 5-28: Simplified Typical Electrical Single-line Diagram for a 35 MWe Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Figure 5-29: Biogas Plant with Integrated Gas Holding Tank Under a Soft Top . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Figure 5-30: Biogas Production Based on Pig Manure and Slaughterhouse Residues Using a Lagoon Digester . . . . . . . . . . 60
Figure 5-31: Process Flow of a Simple Biogas Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Figure 5-32: Gas Engine and Generator Unit for Biogas Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Figure 5-33: Example of Biomass Gasification Power Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Figure 5-34: Wood Chips, at Different Steps Toward “Black Pellets” .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Figure 5-35: Sketch of a Pyrolysis Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Figure 6-1: General Layout of Straw-fired Power Plant with Storage Facility Located in Pakistan . . . . . . . . . . . . . . . . . . 68
Figure 6-2: PQ-diagram Showing Power Output on the Vertical Axis and Heating Output on the Horizontal Axis . . . . . . 69
Figure 6-3: Simplified Design of a Biomass Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Figure 6-4: Firing Diagram of Lisbjerg Biomass Energy Plant in Denmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Figure 6-5: Conceptual Design for Biomass Power Plant in Southeast Asia

(to give an impression of the possibilities for using process simulation calculations) . . . . . . . . . . . . . . . . . . . 72
Figure 6-6: The Environmental and Social Impact Assessment Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Figure 6-7: The Mitigation Process in an Environmental and Social Impact Assessment . . . . . . . . . . . . . . . . . . . . . . . . . 75
Figure 6-8: Sample Table of Contents for an Environmental and Social Impact Assessment Report . . . . . . . . . . . . . . . . . 76
Figure 7-1: Selecting Which FIDIC Contract to Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Figure 8-1: Simplified Time Schedule for the Construction Phase of a Biomass Project . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Figure 8-2: Simplified Risk Register .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Figure 8-3: Time Schedule for the Commissioning Phase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Figure 11-1: Commercial Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Figure 12-1: Investment Costs for Plants of Different Sizes and for Different Regions . . . . . . . . . . . . . . . . . . . . . . . . . 129
Figure 12-2: Range of Typical Investment Costs (CAPEX), Depending on Plant Size, for Steam Cycle . . . . . . . . . . . . . . 131
Figure 12-3: Range of Typical Investment Costs (CAPEX), Depending on Plant Size, for ORC . . . . . . . . . . . . . . . . . . . 131
Converting Biomass to Energy: A Guide for Developers and Investors v

Figure 12-4: Range of Typical Investment Costs (CAPEX), Depending on Plant Size, for Biogas . . . . . . . . . . . . . . . . . . 131
Figure 13-1: Approach to Financial Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
Figure 13-2: Example Illustration of Project Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
Figure 13-3: Approach to Economic Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
Figure 14-1: The Difference Between Corporate Finance and Project Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
Figure 14-2: Financial Viability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Figure 14-3: Setup and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Figure 15-1: Project Emission Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
vi Converting Biomass to Energy: A Guide for Developers and Investors

LIST OF TABLES
Table A: Overview of Proven Biomass-to-Energy Technologies and Plant Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii
Table B: Overview of Needed Biomass Quantities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiv
Table C: Typical Investment Costs, Best Available Techniques (CAPEX) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv
Table 1-1: Overview of Technologies and Plant Sizes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Table 2-1: Biomass Amounts and Plant Sizes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Table 3-1: Biomass Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Table 3-2: Characterization of the Biomass Feedstock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Table 3-3: Sample Questions to Consider When Assessing Constraints

or Risks Associated with Biomass Feedstock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Table 3-4: Supply Chain Questionnaire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Table 4-1: Biomass Amounts and Plant Sizes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Table 5-1: Selection of Technology Based on Biomass . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Table 5-2: Overview of Technologies and Plant Sizes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Table 5-3: Steam-cycle Technologies According to Size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Table 5-4: Ash Analysis of Different Types of Biomass . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Table 6-1: Environmental and Social Impacts: Construction Phase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Table 6-2: Environmental and Social Impacts: Operational Phase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Table 6-3: Environmental and Social Impacts: Decommissioning Phase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Table 7-1: Types of Contracts .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Table 7-2: Warranties and Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Table 8-1: Training Schedule: Phase One . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Table 8-2: Training Schedule: Phase Two . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Table 9-1: Examples of Operation and Maintenance Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Table 9-2: Examples of Consumables and Wear Parts for a Steam Technology Plant . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Table 9-3: Examples of Strategic Spare Parts for a Steam Technology Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Table 9-4: Typical Maintenance Issues for a Steam Technology Plant .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Table 10-1: Overview of the Renewable Energy Support Policies in Selected Countries, 2015 . . . . . . . . . . . . . . . . . . . . 118
Table 10-2: Regulatory Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Table 12-1: Main CAPEX Groups and Sub-items for a Steam-cycle Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Converting Biomass to Energy: A Guide for Developers and Investors vii

Table 12-2: Typical Investment Costs (CAPEX) on a European Basis .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
Table 12-3: Example of Cost Distribution of the Main CAPEX Items for Biomass Plants . . . . . . . . . . . . . . . . . . . . . . . 130
Table 12-4: Operation and Maintenance Costs (OPEX) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Table 12-5: Typical Operation and Maintenance Costs (OPEX) on a European Basis . . . . . . . . . . . . . . . . . . . . . . . . . 133
Table 13-1: Assumptions for Economic Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
Table 14-1: Assumptions for Economic Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Table 15-1: Environmental Aspects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
Table 15-2: Overview of Proposed Questions to Screen for Environmental and Social Issues
on Biomass-to-Energy Projects, based on IFC Performance Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
Table 15-3: Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
viii Converting Biomass to Energy: A Guide for Developers and Investors

DEFINITIONS AND ABBREVIATIONS
DEFINITIONS:
Project owner The developer of the project, in this case typically the owner of the small or medium industrial plant.
Project developer The project owner or an independent and professional developer of energy projects.
EPC contractor Engineering, Procurement, and Construction (EPC) is a particular form of contracting arrangement used
in some projects. The EPC contractor is responsible for all activities from design, procurement, and
construction to commissioning and handover of the project to the end-user or owner. The EPC contract
is often limited to the electro/mechanical equipment.
Guide The present guide on converting biomass to energy.
Turnkey project A turnkey project is a package solution (including detail design, supply, and construction/erection)
offered as the answer to a buyer’s request for proposal. A turnkey contractor is a company or
consortium that provides this type of package solution.
O&M contract An operation and maintenance (O&M) agreement is a long-term agreement between the project
company and a service contractor for the operation and maintenance of the plant.
Process steam/heat Provision of steam at various steam pressures for industrial processes or heat and/or for district heating.
ABBREVIATIONS:
AC Alternating Current CO2 Carbon Dioxide

ADB Asian Development Bank CPU Central Processing Unit
AfDB African Development Bank DAC Direct Air Cooling
ATEX EU Directive 9/94/EC (Appareils destinés à être DB Design–Build
utilisés en ATmosphères EXplosibles) DBFO Design–Build–Finance–Operate
BAT Best Available Techniques DBOO Design–Build–Own–Operate
BATNEEC Best Available Techniques Not Entailing DC Direct Current
Excessive Cost DCS Distributed Control System
BFB Bubbling Fluidized Bed DMC Dry Matter Content
BIGCC Biomass Integrated Gasification Combined Cycle DSCR Debt Service Coverage Ratio
BM Build Margin EBRD European Bank for Reconstruction
BOP Balance of Plant and Development
BOT Build–Operate–Transfer EHS Environment, Health, and Safety
C Celsius EIA Environmental Impact Assessment
C&I Control and instrumentation EIB European Investment Bank
CAPEX Capital Expenditure (investment costs) EPC Engineering, Procurement, and Contracting
CDM Clean Development Mechanism EPCM Engineering, Procurement, and Construction
CFB Circulating Fluidized Bed Management
CHP Combined Heat and Power ESIA Environmental and Social Impact Assessment
Converting Biomass to Energy: A Guide for Developers and Investors ix

ESMS Environmental and Social Management System MJ Megajoule
ESP Electrostatic Precipitator MW Megawatt
EU European Union MWe Megawatt electrical
FID Final Investment Decision MWh Megawatt hour
FIDIC International Federation of Consulting Engineers MWth Megawatt thermal
FRA Frequency Response Analysis n.a. Not Applicable
GGF Green for Growth Fund NPV Net Present Value
GJ Gigajoule O&M Operation and Maintenance
GNOC Global Nitrous Oxide Calculator OECD Organisation for Economic Co-operation
HMI Human Machine Interface and Development
IDB Inter-American Development Bank OEM Original Equipment Manufacturer
IEA International Energy Agency OM Operation Margin
IFC International Finance Corporation OPEX Operational Expenditure (costs of O&M)
IRENA International Renewable Energy Agency ORC Organic Rankine Cycle
IRR Internal Rate of Return PPA Power Purchase Agreement
IUCN International Union for Conservation of Nature PS Performance Standard
KfW Kreditanstalt für Wiederaufbau R&D Research and Development
(German Development Bank) RfP Request for Proposal
kg Kilogram RCM Reliability Centered Maintenance
kV Kilovolt SIA Social Impact Assessment
kW Kilowatt TEWAC Totally Enclosed Water to Air Cooling
kWh Kilowatt hour Ton Metric Ton (1,000 kg)
LCOE Levelized Cost of Electricity UN United Nations
LCV Lower Calorific Value V Volt
LPG Liquefied Petroleum Gas WACC Weighted Average Cost of Capital
MDF Medium-density Fiberboard
x Converting Biomass to Energy: A Guide for Developers and Investors

FOREWORD
Biomass can become a reliable and renewable local energy source to replace conventional fossil fuels in local industries
and to reduce reliance on overloaded electricity grids. In this perspective, many medium-to-large agricultural, wood
processing, or food processing industries in developing countries and emerging economies are well placed to benefit
from the successful development of biomass-to-energy.
The International Finance Corporation presents this guide as a practical tool for developers of and investors
in biomass-to-energy projects. The target audience is medium-to-large agricultural, food and beverage, or wood
processing companies in developing countries. Most likely, they have a biomass resource on-site in the form
of a byproduct or waste from their core business that may be used for energy production and hence used to replace
existing energy sources.
The development of a biomass-to-energy project requires careful preparation, and it is hoped that this guide will help
project developers and investors prepare successful projects, adopting industry best practices in the development,
construction, operation, and financing of biomass-to-energy projects. To facilitate this, the guide provides reference
knowledge for key types of biomass-to-energy projects on technical, financial, and environmental aspects as well
as issues related to grid access, offtake agreements, biomass availability, sustainability, and the supply chain.
This guide is written mainly for developers and investors in energy production from bio-waste generated from the
agricultural, food and beverage processing, and wood processing sectors in developing countries and emerging
economies. However, much of the technical content is equally relevant to broader applications and is likely to be
helpful to readers who are keen on deepening their understanding of the biomass-to-energy sector.
We hope that you find this guide useful.
Milagros Rivas Saiz

Global Head of Cross-Industry Advisory
International Finance Corporation
Converting Biomass to Energy: A Guide for Developers and Investors xi

ACKNOWLEDGMENTS
This publication was prepared by COWI A/S on behalf of the International Finance Corporation.
The guide’s development was managed by Carsten Glenting and Niels Jakobsen, who also contributed extensively
to the content. COWI colleagues Frederik Møller Laugesen, Meta Reimer Brødsted, Ole Biede, Michael Madsen,
Asger Strange Olesen, Simon Laursen Bager, John Sørensen, Lars Bølling Gardar, and Claus Werner Nielsen provided
valuable input to key sections. Anne-Belinda Bjerre and Wolfgang Stelte of the Danish Technological Institute provided
important input on the biomass characterization. The authors also would like to thank Gunnar Kjær for skillfully
editing the manuscript as well as Maria Seistrup for assistance in layout.
The work was guided by Ahmad Slaibi (IFC), who, together with colleagues Cody Michael Thompson, Paolo
Lombardo, Daniel Shepherd, and Efstratios Tavoulareas, provided important review and comments that helped to
improve the document. The document also benefited from comments from Alexios Pantelias, John Kellenberg, Viera
Feckova, Sergii Nevmyvanyi, and Dragan Obrenovic of IFC as well as Jari Vayrynen of the World Bank.
Finally, this guide has benefited from a wide range of input received from industry, governmental, and
nongovernmental experts.
xii Converting Biomass to Energy: A Guide for Developers and Investors

EXECUTIVE SUMMARY
The International Finance Corporation presents this

guide as a practical tool for developers of and investors in 1. Project development 2. Project implementation
biomass-to-energy projects to help them assess the technical 1.1 Project idea 2.1 Design
and financial feasibility of the different biomass-to-energy 1.2 Pre-feasibility study 2.2 Construction
options available to their businesses and industries. 1.3 Feasibility study 2.3 Commissioning
1.4 Contracts and financing 2.4 Operations
The guide specifically covers modern biomass-to-energy
2.5 Decommissioning
technologies where the biomass is derived as residues from the
agricultural (including livestock and biomass from any crop),
food and beverage processing, and wood processing sectors. A project owner must carefully consider a number of issues
that present potential barriers before proceeding with
The guide discusses three general types of proven development. The most important concerns are:
technologies for producing steam/heat and electricity from
biomass: steam technology (combustion), Organic Rankine • Is biomass available at a guaranteed quality, quantity,
Cycle (ORC) technology, and biogas technology. The and price?
technologies differ by plant capacity and target different • Is a site with proper access and size available at
types of biomass (see Table A). reasonable costs?
The project owner and/or the project developer need to have • Is there sufficient biomass project development
a detailed overview of the various options when initiating a experience and financial strength?
biomass-to-energy project. These options relate to both the • Is financing available at reasonable terms and conditions?
technologies and the actions necessary to take the project
• Is a well-defined market available for the export of
from conceptualization to a successfully completed and
energy (electricity and/or steam/heat), offering long-term
operating biomass project.
secure prices to make the project financially feasible?
The project development and implementation can be broken • Is a grid connection available within a short distance,
down into the following stages: and is connection possible at reasonable terms (in case
Table A: Overview of Proven Biomass-to-Energy Technologies and Plant Capacity*

1–5 MWe 5–10 MWe 10–40 MWe
Technology/Range (4–20 MWth) (20–40 MWth) (40–160 MWth)
Combustion plants using a water/steam boiler ● ● ●
Combustion plants using ORC technology ● ● n.a.
Biogas production with gas engine ● n.a. n.a.
Source: COWI.
* Steam technology and ORC technology apply to fuels with a moisture content below approximately 60 to 65 percent, whereas biogas technology (anaerobic digestion with
gas engine) applies to fuels with a moisture content above 60 to 65 percent.
Converting Biomass to Energy: A Guide for Developers and Investors xiii

the project is not developed solely for self-supply of owner of the plant to the contractor(s), listed below in order
electricity and/or heat/steam)? of increasing responsibility for the contractor:
• Is national (and any regional or international) legislation

• Traditional contracts with division of the plant into a
in favor of this type of project, and can planning and
number of partial contracts with separate detailed designs
environmental approval be expected?
• DB (Design–Build) / EPC (Engineering, Procurement,
Furthermore, the project owner should identify and mitigate Construction) / Turnkey contract with one contractor
any potential regulatory risk to the project. The most being responsible for the design and construction for the
common regulatory risks are: entire plant
• DBO (Design–Build–Operate) / BOT (Build–Operate–

• Availability of policy support measures necessary for
Transfer) type contracts where the contractor also
project viability
operates and maintains the plant
• Changes in political priorities that may reduce
• DBFO (Design–Build–Finance–Operate) where the
attractiveness of regulatory regime
contractor takes full responsibility for the provision of a
• Planning and environmental permits are not obtained in biomass-based power plant and is remunerated through
a timely manner. the sale of heat and power.
When initiating a biomass project, the amount, quality, and The decision of the type of contract will depend on the
availability of the biomass is essential for the success of the degree to which the biomass plant is integrated with the
project. This guide includes a characterization of 35 different owner’s existing facilities and the owner’s ability and
types of biomass, including their calorific value (energy willingness to transfer design decisions, operational control,
content of the fuel), biogas potential, chemical composition, and project risks to the contractor.
ash content, and moisture content. The guide also explains
During the construction phase, special attention must be
the elements needed to secure biomass availability, including
given to the time schedule and follow-up on progress, the
supplier agreements, realistic transport distances, and
handling of claims for extra work, the handling of risks
acceptable costs of collection, transport, and storage. It
related to the project, and the environment, health, and
provides the approximate amounts of biomass necessary
safety (EHS) aspects.
for different plant sizes and technologies (based on certain
criteria for calorific value, load profile, etc.) (see Table B).
When the construction of the plant is completed, it is time
for the commissioning phase, which includes training, cold
Once the technology has been chosen and sufficient amounts
testing, hot testing, functional testing, and trial operation.
and quality of biomass are confirmed, procurement and
contracting of the biomass plant becomes relevant. There
A financially viable business case is essential for securing
are several ways of transferring the responsibility from the
financing for any project. To support the business case
Table B: Overview of Needed Biomass Quantities

1–5 MWe 5–10 MWe 10–40 MWe
Technology/Range Minimum input (GJ/day)*
Combustion plants using a water/steam boiler 20 tons/day–100 tons/day 100 tons/day–200 tons/day 200 tons/day–900 tons/day
Combustion plants using ORC technology 50 tons/day–200 tons/day 200 tons/day–500 tons/day n.a.
Biogas production with gas engine 40 tons/day–200 tons/day n.a. n.a.
Source: COWI.
xiv Converting Biomass to Energy: A Guide for Developers and Investors

estimates, this guide provides indicative estimates of the • Reflect the underlying project risks and the identified
capital expenditures (CAPEX) and operational expenditures mitigation measures.
(OPEX) for the different technologies and for different sizes
of plants (see Table C). There are many different ways of securing financing for a
biomass-to-energy project. The most common ways are:
Another important factor when securing financing is
formalizing of the agreements with biomass suppliers and • Own funds (equity)
heat/power buyers. Once the terms of these agreements have • Bank loans (from international commercial banks, local
been established, the project developer will have concrete banks, and development banks or multilateral financing
knowledge of the input and output of the plant. This will institutions)
enable the developer to conduct a realistic financial analysis,
• Investment by technology supplier
which is the basis for a bankable feasibility study to be used
for ensuring financing. • Investment by biomass supplier (could be cooperatives of
farmers or biomass processing companies with significant
Before initiating the search for finance, the project developer bio-waste quantities)
should bear in mind the following:
• Build–Operate–Transfer (a third party takes the
• The process of acquiring finance can be time consuming. responsibility of financing, designing, building
infrastructure, and operating the plant for a fixed period)
• The technical, contractual, and permitting aspects of a
biomass-to-energy project all affect the opportunities for • Private equity funds.
securing financing.
This guide focus primarily on secondary and tertiary
• Project lenders will carefully assess all aspects of the bio-residues, as the social and environmental risks associated
project, with specific attention to the risks involved. with using primary biomass for energy purposes are much
Therefore, attention to detail, risk mitigation, and higher. It is therefore important that the main biomass input is
anticipation of lender concerns are very important. bio-residues to ensure environmental and social sustainability.
When addressing financial institutions, it is a prerequisite The development of a biomass-to-energy project requires
that the project developer be able to present a financial careful preparation. It is hoped that this guide will help project
viable business case. This is important for both small and developers and investors prepare successful projects that adopt
large-scale biomass projects. A financial business case should industry best practices in the development, construction,
be conducted with the following issues in mind: operation, and financing of biomass-to-energy projects, thereby
paving the way for an increase in these projects.
• Be seen from the investor’s perspective
• Be based on market prices (include taxes, tariffs, and

subsidies, but not externalities)
Table C: Typical Investment Costs, Best Available Techniques (CAPEX)

Plant Size (MWe) Steam Cycle CAPEX* ($/kW) ORC CAPEX ($/kW) Biogas CAPEX ($/kW)
1–5 5,000–10,000 3,000–8,000 3,500–6,500
5–10 4,000–8,000 2,000–5,000 n.a.
10–40 3,000–6,000 n.a. n.a.
Sources: Turboden, 2016; Danish Energy Agency and Energinet.dk, 2015; Ea Energianalyse, 2014; IRENA, 2015; COWI.
* Capital expenditure: European basis, indicative minimum and maximum costs. For other geographical areas, see Figures 12–2, 12–3, and 12–4.
Converting Biomass to Energy: A Guide for Developers and Investors xv

Source: COWI.
xvi Introduction to Biomass-to-Energy

INTRODUCTION TO BIOMASS-TO-ENERGY
1
Biomass resources are found almost everywhere and can The guide also includes biogas, where organic matter (such
become a reliable and renewable local energy source to as agricultural residues, animal wastes, and food industry
replace fossil fuels. Energy produced from biomass can wastes) is converted into biogas through anaerobic digestion.
reduce reliance on an overloaded electricity grid and can The raw biogas can be combusted to produce electricity and/
replace expensive fuels used in local industries. or steam/heat, or it can be transformed into bio-methane and
used as a substitute for natural gas in internal combustion
The International Finance Corporation (IFC) presents this engines. This guide does not cover biofuel technologies
guide as a practical tool to help developers of and investors such as liquid fuel ethanol and biodiesel intended for use as
in biomass projects assess the technical and financial transport fuel in vehicle engines.
feasibility of the different biomass-to-energy options
available to their businesses and industries. Biomass-to-energy is a sustainable solution that can reduce
greenhouse-gas emissions to the atmosphere, assuming the
The target audience is medium-to-large enterprises for which use of secondary and tertiary biomass to substitute the use
biomass is a byproduct, including, but not limited to, the food of fossil fuels. Agricultural and forest-based industries in
and beverage industry, the wood processing industry, and developing and emerging economies generate a substantial
forestry and agriculture in developing countries. Most likely, amount of biomass residue and waste that could, in
these enterprises already have identified a biomass resource principle, be used for energy production.
as a byproduct or waste from their core business and can use
the energy for captive purposes, with grid sales as a secondary However, the development of a biomass project is complex
goal. The focus here therefore is not on primary biomass and requires careful preparation. The absence in many
sources, except to supplement the on-site biomass. developing countries and emerging economies of high-quality
project documentation that substantiates the technical,
1.1 BACKGROUND financial, and socioeconomic feasibility of biomass projects
is a key barrier for access to funding for these projects.
Solid biomass—including fuel wood, charcoal, agricultural
and forest residues, and animal dung—traditionally has
Against this background, IFC has requested COWI to
been used for energy in rural areas of developing countries,
develop this guide for developers and investors. The guide
alongside traditional technologies such as open fires for
provides reference knowledge for key types of biomass-to-
cooking, kilns, and ovens for small-scale agricultural
energy projects on technical, financial, and environmental
and industrial processing. Often, the use of traditional
aspects as well as issues related to agreements for the sale
biomass-to-energy technologies has been beneficial to local
of steam/heat and electricity and grid access, in addition to
communities, but this approach continues to lead to high
biomass availability, sustainability, and the supply chain.
pollution levels, forest degradation, and deforestation.
The overall objective of this guide is to build competence

The present guide concerns modern biomass-to-energy
among key stakeholders. Improved knowledge of the technical
technologies where electricity and steam/heat are derived
and financial feasibility of the different biomass-to-energy
from the combustion of solid, liquid, and gaseous biomass
technologies available to business and industry may lead to
fuels in high-efficiency and low-emission conversion systems.
Converting Biomass to Energy: A Guide for Developers and Investors 1

Source: COWI.
an expansion of biomass-to-energy projects in developing Once the available biomass has been assessed, a suitable
countries and emerging economies, as well as elsewhere. technology has to be selected. This guide presents three
general types of technologies to provide the project developer
This guide is written mainly for developers and investors in with the insight to perform an initial project assessment and
energy production from biomass surplus or waste generated development. The three technologies in focus are:
from small, medium, and large-sized firms that operate in
the agricultural, food and beverage processing, and wood • Combustion plants using a water/steam boiler
processing sectors.
• Combustion plants using Organic Rankine Cycle
(ORC) technology
1.2 SCOPE
• Biogas technology using a gas engine.
The scope of this guide is to provide project developers in
developing countries with an approach and methodology This guide furthermore distinguishes between plant sizes,
for developing a biomass project, while at the same time as biomass-to-energy projects are subject to significant
giving them the ability, on an initial level, to assess the economies of scale. The projects are divided into the
quality of their biomass and the corresponding most-suitable following ranges:
technologies.
• Small (1–5 MWe)
To assess the quality of the available biomass, this guide
• Medium (5–10 MWe)
includes a characterization of 35 of the most common types
of biomass available in developing countries. The biomass • Large (10–40 MWe).
included in this guide is primarily waste products from the
Table 1–1 provides an overview of the key technologies and
agricultural and forestry sectors and from industry. The main
the typical plant sizes in which they are applied.
focus is on secondary and tertiary biomass types; primary
biomass is included only as a supplemental energy source, if Technology descriptions in this guide are based on Best
other sources are unavailable. Available Techniques (EU BAT Reference Documents
2 Introduction to Biomass-to-Energy
Table 1-1: Overview of Technologies and Plant Sizes
1–5 MWe 5–10 MWe 10–40 MWe
Technology/Range (4–20 MWth) (20–40 MWth) (40–160 MWth)
Combustion plants using a water/steam boiler ● ● ●
Combustion plants using ORC technology ● ● n.a.
Biogas production with gas engine ● n.a. n.a.
Source: COWI.
(BREFs) and BAT Conclusions (IPCC, 2015)). International

standard prices as of early 2016 are applied, scaled to the The guide structure:
specific world regions based on their typical relative price Chapter 1: Introduction to Biomass-to-Energy
level differences. Local conditions, specific local context, Chapter 2: Project Development Process
and the market situation at the time of procurement may Chapter 3: Biomass Resources
influence actual procurement prices, so these cost estimates Chapter 4: Securing Biomass Supply
should be used with caution. Chapter 5: Energy Conversion Processes
Chapter 6: Plant Design and Permitting
1.3 GUIDE STRUCTURE Chapter 7: Procuring the Biomass Plant
This guide describes all the necessary steps in the Chapter 8: Construction and Commissioning
development of a biomass-to-energy project. Following this Chapter 9: Operation and Maintenance of

Biomass Plants
introductory chapter, we present an overview of the entire
Chapter 10: Regulatory Framework
project development process, so that project developers
Chapter 11: Commercial Aspects
have an idea of the overall process they are about to enter.
Chapter 12: Typical Investment and Operation and
Next, the guide describes biomass resources and how to
Maintenance Costs
secure biomass supply. This is followed by several in-depth
Chapter 13: Financial and Economic Analysis
chapters covering the technology aspects, plant design, plant
Chapter 14: Financing Biomass Projects
procurement, construction, and operation. After the more
Chapter 15: Environmental and Social Considerations
technical aspects, the guide focus on framework conditions,
Chapter 16: Lessons Learned from Biomass Projects
investment costs, financial and economic analysis, and
Appendix A: Screening List
securing financing. Finally, the guide presents potential
Appendix B: Characterization of Biomass
environmental and social considerations and concludes with
Appendix C: References
a chapter on the lessons learned from implemented biomass-
to-energy projects.

Source: COWI.
4 The Project Development Process

THE PROJECT DEVELOPMENT PROCESS
2
This chapter presents an overview of the development 2.1.2 ENERGY DEMAND
process from the point of view of both project owners and
A successful biomass project brings together a source of
professional project developers. It begins with the concept of
biomass with an energy demand. This may result in different
a biomass project, describes the complexity of such projects,
plant types and sizes.
presents the stakeholders involved, and discusses the stages
of project development and implementation.
Two types of energy use:
1. Electricity generation and/or heat/steam for in-house
2.1 PROJECT CONCEPT consumption
2.1.1 HOW IS THE PROJECT IDENTIFIED? 2. In-house consumption plus export of electricity/heat/
steam/district heating
A biomass project can provide many advantages, such as:
• Offering a cheaper and more stable energy supply ELECTRICITY GENERATION AND/OR HEAT/STEAM FOR
(electricity, steam, heat) for an industrial process IN-HOUSE CONSUMPTION
• Improving the economy of the industrial business by All industrial plants use electricity for processing, and many
exporting surplus electricity, heat, or steam produced need heat in the form of steam or hot water. If the proper
from biomass residues match exists between available biomass resources and energy
demand at the plant (power and heat), a cogeneration plant
• Providing an environmentally friendly solution to
may be developed. If biomass resources are limited and there
the energy needs of an industry or a local community
is a process demand for steam/heat, it may be preferable to
(district heating or cooling)
design the plant for heat production only. The technology
• Reducing greenhouse-gas emissions by substituting fossil is simpler, operation and maintenance are easier, and the
fuels such as oil, gas, or coal with biomass capital cost is less.
• Reducing a potential industrial or agricultural waste IN-HOUSE CONSUMPTION PLUS EXPORT OF

disposal problem. ELECTRICITY/HEAT/STEAM/DISTRICT HEATING
One or more of these reasons may lead to the idea to When biomass resources exceed the energy demands of the
develop a biomass project. The owner of an industrial industrial plant, this may become a local energy center based
enterprise or a professional project developer may identify on biomass as fuel. The plant may export surplus energy to
an opportunity for a potential biomass project. It will then nearby industries in the form of electricity and heat (steam or
take the combined efforts of a larger group of stakeholders hot water). In cooler climates, biomass also may feed a district
to bring the idea to fruition in the form of a successfully heating system for the surrounding community. This type and
operating project. size of project will demand careful planning, as the technology
is more complicated, the time and cost of the project
development is more demanding, and the risk is greater.

2.1.3 BIOMASS RESOURCE The residues from forestry and agriculture also may be used
as a supplementary fuel source for industrial biomass plants.
Two types of biomass sources:
1. Energy production units using biomass residues from If no suitable industrial facility exists to use the available
industrial production forestry and agricultural residues, a new biomass plant may
2. Energy production units based on available residues be established to supply electricity and/or district heating for
from agricultural crops and forestry wastes a local community.
ENERGY PRODUCTION UNITS USING BIOMASS This is outside the scope of this guide, but many
RESIDUES FROM INDUSTRIAL PRODUCTION considerations and recommendations of this guide are
Industrial facilities may develop energy plants using their relevant and may be useful for that purpose.
own biomass residues. The biomass may consist of, for

2.1.4 IS ENOUGH BIOMASS OF PROPER QUALITY
example, waste from wood processing industries, distillery AVAILABLE?
waste, ethanol production waste (lignin), bagasse from sugar
The most important question to ask is whether sufficient
production, etc.
biomass (at guaranteed long-term quality, quantity,
As a starting point, the biomass plant produces electricity and price) is available from the industrial facility’s own
and/or steam/heat for the industry’s own use, but it may also production, perhaps supplemented by local agricultural or
export excess electricity and/or heat. forestry biomass wastes.
In case of seasonal industrial production, such as a season or Before investing in a biomass plant, the project owner must
campaign at a sugar mill, the energy production plant may be certain that sufficient biomass is available to keep the
be used outside the campaign to export electricity and heat. plant running and to ensure a financially viable project. If
This will require that the plant be designed for off-season the project owner fails to convince the potential investors
operation (typically the turbine needs to be an extraction/ of the project’s financial viability, the project is unlikely to
condensing type instead of a backpressure turbine). obtain financing on reasonable terms.
Supplementary fuels will be needed outside the campaign, Table 2–1 shows the minimum amount of biomass necessary
so it is important to secure that the biomass plant is able to for the project to be technically viable.
operate fully on the two different types of biomass.
ENERGY PRODUCTION UNITS BASED ON AVAILABLE

RESIDUES FROM AGRICULTURAL CROPS AND
FORESTRY WASTES
This option represents projects based on the recovery of

residues from the forestry and agricultural sectors. In this
case, there may not be an existing industrial facility to use
the electricity, steam, or heat produced. An exception could
be an industry owning, for example, fields for sugarcane
production, wheat grain production, oil plantations, or fruit
plantations (mango, pineapple, etc.).

Table 2-1: Biomass Amounts and Plant Sizes
1–5 MWe 5–10 MWe 10–40 MWe
Combustion plants using a water/steam boiler 20 tons/day–100 tons/day 100 tons/day–200 tons/day 200 tons/day–900 tons/day
Combustion plants using ORC technology 50 tons/day–200 tons/day 200 tons/day–500 tons/day n.a.
Biogas production with gas engine 40 tons/day–200 tons/day n.a. n.a.
Source: COWI.
* Biomass tonnages at an average caloric value of 10 megajoules per kilogram, assuming 100 percent load.
2.2 MOVING FROM IDEA TO CONCEPT Potential plant sites must be identified if space is limited at
the industrial site or if the project is planned for the use of
The project owner must carefully consider a number of
forestry or agricultural residues. In this respect, the following
issues before proceeding with the development. Aside from
considerations are necessary:
having sufficient biomass of the proper quality, the most
important barriers are listed below.
• What is the cost of suitable and available sites?
Important project barriers: • Are there any restrictions on their use?
1. Is a site with proper access and size available at • Is the potential site large enough for the biomass plant
reasonable cost?
and for the necessary biomass storage area?
2. Does the project owner have sufficient strength to
close the project? • How is the infrastructure of the area? For example,
3. Is financing available at reasonable terms and conditions? connection to grid (if relevant), connection to heat/steam
4. Is a well-defined market available for export of energy customers (if relevant), road/railway access (if relevant),
(electricity and/or steam/heat), offering long-term power supply, sewer connection, raw water supply, etc.
secure prices and making the project feasible?
5. Is a grid connection available within a short distance, • What is the distance from the biomass resource?
and is connection possible at reasonable terms? (This
is not relevant if the project is developed only for • Is sufficient storage space available to accommodate
self-supply of electricity and/or heat/steam.) interruptions in external fuel supply (rainy season,
6. Is national (and any regional or international) legislation blocked roads, etc.)?
in favor of this type of project, and can environmental
approval be expected? PROJECT DEVELOPMENT
The development of a biomass project may take long and be

Additional questions to be considered are also listed below. To
complicated and costly. The success of the project depends
support these considerations, Appendix A provides a screening
entirely on the strength of the project owner/ project
list to be used by project owners and/or project developers.
developer in terms of available time, technical and economical
SITE IDENTIFICATION insight, and access to sufficient funds to develop the project.
The use of biomass residues requires a proper site adjacent IMPORTANT QUESTIONS
to the industrial facility with sufficient space for the storage,
• The development process may require substantial
potential processing, and feeding of the biomass residue.
assistance from specialists with experience in
Additional space must be available for the biomass plant
engineering, architecture, environment, legal issues,
itself and for the residues from the combustion process.
and economy/finance. What can the project owner
If supplementary biomass fuel is needed from outside
do, and when will external assistance be needed from
sources, proper access roads are important.

consultants and advisers? Are the necessary advisers • Who will pay for the transmission line to the grid
available, and what would be the associated costs at each connection point and for the heat/steam connection?
stage of the project development?
• How is biomass handled and stored at the site?
• What would be the timeline for project development,
• How is backup energy supply secured (in case of plant
and is this realistic in terms of authority approvals, etc.?
breakdown, lack of biomass supply, etc.)?
• Are potential government incentives or subsidies OPERATION AND MAINTENANCE

available within the timeframe of the project?
A biomass plant is a technically complex setup that requires
BIOMASS SOURCING (SUPPLEMENTARY FUEL OR staff with sufficient skills unless operation and maintenance
FORESTRY/AGRICULTURAL PROJECTS) is outsourced to an operation and maintenance operator
• Is sufficient biomass available, and from whom/where? under a long-term contract.
• Is seasonality or the rainy season an obstacle? • Will the plant’s own staff carry out maintenance, or will
• How is the biomass stored until delivery to the plant it be outsourced?
(at the biomass supplier’s place)? • Are staff with required skills locally available to manage
• Who delivers the biomass, and what is the contractual setup? and operate the plant?
• How is the quality of the biomass verified? • Will the plant have a high degree of automation, thus
reducing the need for manpower? (This may require
• What is the price and the payment mechanism (weight,
more highly skilled staff.)
moisture content)?
• Are disposal routes for ashes available?
TECHNICAL ISSUES
LEGISLATION
• Is the biomass waste appropriate as a fuel for energy
production? • Is national (and any regional or international) legislation
in favor of this type of project, and can planning and
• Is potential corrosive behavior of the fuel acceptable for
environmental approvals be expected?
technology providers?
• Does legislation allow such facilities?
• If supplementary biomass fuels are needed, can the
biomass plant operate without limitations on both on-site • What are the local and national emission limits that need
and off-site sourced fuels? (Fuel handling, steam boiler, to be met? What is the associated cost?
and flue gas cleaning are important points to consider.)
FINANCING
• Is it technically and economically feasible to convert the
• Who will be the owner and operator of the project?
biomass waste to electricity/heat?
• Is the project financially viable, and are potential risks
• Is sufficient biomass fuel available, and, if not, are
identified and adequately mitigated?
supplementary fuel sources available, and at what cost
and terms? • Does the project have access to sufficient financing from
internal sources, or will external financing from financial
• Is a connection to the grid possible at the correct voltage
institutions be necessary for implementation?
(if export of power is relevant)?
• Is financing available at acceptable terms and costs?
• Is a connection for the supply of steam and/or heat to
nearby industries or district heating networks accessible
(if export of heat and/or steam)?

PROJECT ECONOMY These considerations and the approach to take are discussed
in more detail in the following.
• Is the project dependent on external sale of energy? If
yes, is there a market for the sale of electricity, process
2.3 COMPLEXITY OF THE DEVELOPMENT
steam, or heat to outside customers?
PROCESS
• What terms can be obtained for connection to and sale 2.3.1 MEDIUM-SIZED, COMPLEX PROJECTS
of electricity to the grid, including available support
When a biomass project has been identified, more-thorough
mechanisms for renewable energy such as feed-in tariffs,
studies and considerations must be made in order to develop
clean energy certificates, etc.?
the project.
• Is there a tariff for the sale of heat and/or steam?
The development of a biomass project is complex and
• Can the feed-in tariff be guaranteed, and what are the
requires careful preparation with the support and
commercial terms and timeframe?
involvement of several stakeholders. The development
• Is the anticipated project revenue sufficient to generate a of a project, including all necessary permits from the
return on investment commensurate with project risks? environmental authorities, may take as many as one to three
A thorough discussion and assessment of energy demand, years depending on the location, financing, and procurement
biomass resources, site selection, and many of the other process—potentially leading to high project development
issues stated above is crucial in order to continue the costs. It is therefore of utmost importance to know the route
development of a biomass project. to follow and the barriers and constraints that need to be
managed in order to achieve a project that is technically
Some issues may still be left open, but the more important well functioning and financially viable. This section defines
questions must be resolved with a favorable answer if the project the stages and details the requirements for key initial
development shall proceed and the time and money be spent. considerations, studies, and documents.
The size and complexity of a project will guide the Figure 2–1 shows the main agreements for a biomass
development process. Is the proposed project small or large; project. The agreements concern biomass supply, financing,
will it supply energy for a single industry only or will it contractors/consultants, and energy sales—all aspects vital
export to others; will energy be produced as electricity or for a financially sustainable project. If these agreements are
steam/heat, or perhaps energy cogeneration? missing, the project developer faces large risks.
Figure 2-1: Main Contracts for a Biomass-to-Energy Project
Banks
Equity for Authority
providing
project approvals
loans
Loan
Own agreement Own energy
biomass
consumption
on site
Biomass-to-Energy Project
External External heat
Biomass supply
biomass and power
agreement Plant construction
suppliers customers
contracts PPA
O&M contractor Construction and Insurance

Consultants (if outsourced) equipment company
contractors
Source: COWI.

Plant procurement may take place in various ways, • Technology (fuel preparation, combustion, energy
recovery and use, etc.)
• As a turnkey/EPC contract
• Staffing (quality of personnel for operation and
• As EPC/turnkey for the electro/mechanical equipment maintenance, etc.)
• In multiple lots with separate contracts (e. g., for the • Energy backup
turbine/generator, steam boiler, etc.).
• Contractors/consultants
Likewise, the civil construction can be split into several
• Project risk evaluation.
contracts. This is discussed in more detail in Chapter 7.
If the owner’s evaluation of the issues listed above is
An operation and maintenance contractor is relevant only favorable and the owner is capable of financing the project
if operation and maintenance are outsourced instead of the from his or her own funds or from local banks, the owner
plant having its own operation and maintenance personnel. may be able to develop and procure the project locally and
complete the project quickly.
External heat and power customers are not relevant if the
biomass plant only produces electricity and/or process steam/ 2.4 STAKEHOLDERS
heat for own-consumption by the industrial plant.
The success of a biomass project often depends on the
2.3.2 SMALL AND LESS-COMPLEX PROJECTS attitude of various stakeholders, including the authorities,
biomass suppliers, energy customers, and local stakeholders
Small plants are often developed to serve a single industry,
(among them nongovernmental organizations and various
producing the quantity and quality of biomass residue to
community groups).
meet the industry’s own energy requirements. The energy
could be in the form of electricity and/or heat (steam). This Figure 2–2 gives an overview of the many different
type of project is usually less complex, less controversial, and stakeholders that may influence or be involved in the
less costly than many larger projects; as such, development development of a biomass project. The text below describes
may proceed more quickly. their different roles.
An example of this is the owner of a small industrial plant who

Figure 2-2: Stakeholders of the Biomass Project
wishes to develop an energy production unit using biomass
as the fuel. The owner has access to the necessary funds for
O&M operator
the development, and biomass fuels of acceptable quality and

sufficient quantity are available in the area. The energy needed
could be in the form of electricity and/or heat (steam). s/
Fin nt
an u lta rs
cin ns is e
g Co adv
The owner should still ensure that the basic requirements for
a successful project are observed with respect to:
Community THE BIOMASS Authorities
PROJECT
• Financing available at acceptable terms
s Ene
tor rgy
• Permits (planning, environment and community trac sale
Con
relations, etc.)
ply
Re
up
s
ss
idu
• Infrastructure (access roads, utilities, etc.)

as
es
om
• Fuel supply (quality, quantity, transport, storage, cost,

Bi
contract terms, etc.)

Source: COWI.

The Biomass Project represents the proposed scheme and a project. Local citizen groups may support the project
its developer/owner. If the biomass plant is established as but also will be concerned about potential negative
an SPV (Special Purpose Vehicle), the owner becomes a environmental and social impacts. It will be essential
stakeholder as the SPV is an independent legal entity. to consult with communities on their concerns and to
incorporate results of the consultation in the design of the
The stakeholders are presented in alphabetic order below: environmental and social risk and impact mitigation strategy.
Authorities include national bodies that will examine the Project-related traffic could be an important issue to manage
project from a national statutory and planning position as if external biomass is necessary, as many trucks will enter
well as from an environmental and a working environment/ the biomass plant every day. On the other hand, transport
health point of view. Authorities also include local authorities creates job opportunities that may benefit the local economy.
(which may include the municipality) with the mandate
to issue local planning and construction permits, traffic Energy sale represents the necessary agreements with the
regulations, fire certificates, licenses to connect to wastewater buyers of electricity and/or heat/steam.
sewers (and to the electricity grid, if applicable), etc.
Power may be used by the industrial company that owns
Biomass supply represents an agreement (if necessary) with the biomass plant (captive power). Alternatively, it may be
outside biomass suppliers. In the case of a project using sold to another industrial consumer or it may be sold to
waste material produced from the manufacturing process a utility company.
of the owner’s industrial plant, such agreement probably
will not be required. This may, however, be the case if the A power purchase agreement (PPA) with the national or local (as
in-house production of biomass residues is insufficient to may be) power company or agency or with an industrial user/
meet the industrial plant’s need for energy. Biomass supply consumer will stipulate the terms and price for taking and paying
agreements will be required if the project is designed for the for any surplus electricity from the biomass plant. It may include
use of external agricultural or forestry biomass wastes (for a commitment on the part of the biomass plant to produce
example, as supplementary fuel due to seasonal variations of power for a minimum number of hours during the year.
the primary biomass or to achieve economies of scale).
Energy sale also may include the sale of any surplus heat
Consultants/Advisers. In addition to the capabilities of their in the form of hot water or low-pressure steam to adjacent
own organization, the owner may need outside advice and industries or to a district heating/cooling company.
support from consultants within technical, environmental,
Financing. The source of finance for this type of project could
legal, commercial, and financial areas.
be company- or investor-owned funds, but usually it involves
Contractors. At some point, a decision should be made on a financial institution. Lenders are typically international
whether to use a turnkey contractor or to rely on separate commercial banks, local banks, and development banks or
contracts for the process plant and a civil contractor for multilateral financing institutions (for example, IFC). Owner
building and civil construction work. Further contract equity or third-party investors, such as technology suppliers,
breakdown may include, for example, separating the turbine/ also may be an option.
generator and the fuel-handling equipment from the steam
O&M operator. Three options may be relevant. The biomass
generator and the flue gas cleaning. There are variations to
plant may be operated from the industrial plant’s control
these two main options, and all will require a different set of
room or from a control room at the biomass plant with
contract agreements.
its own personnel. Another option is to engage an O&M
Community. Well-managed, early community engagement contractor, who is responsible for operation and maintenance
is an important factor to decide the success or failure of on a long-term contract. A third option is to enter into

Name and location: Tres Valles, Mexico
Project: Power plant at sugar mill in the province

of Veracruz in Mexico
Description: Grate-fired boiler producing process

steam and electricity for the sugar mill.
Surplus electricity is exported to the
owner (soft drink producer) via the grid.
Boiler data: 65 bar / 510 °C / 250 tons of steam

per hour
Turbine output: 40 MW gross power output + 50 tons

of extraction steam per hour
(28 bar, 392 °C)
Fuel: Sugarcane bagasse
Source: TGM, 2016, www.grupotgm.com.br; COWI A/S, www.cowi.com.
a Design–Build–Own–Operate (DBOO) contract for the PROJECT IMPLEMENTATION

biomass plant. This is a joint, long-term contract with one
2.1 Design
counterpart to design, build, finance, and subsequently
operate and maintain the biomass plant. 2.2 Construction
2.3 Commissioning
Residues represent an agreement with a waste hauling/
disposal contractor to remove and dispose of all residues from 2.4 Operations
the plant in accordance with local and national environmental 2.5 Decommissioning
rules. Disposal of residues also may be included in a biomass
Project development stages 1.1 to 1.4 take the project from
supply agreement or handled by the industry owner.
the conceptual ideas/thoughts until the final investment
There may be opportunities to use the residues as fertilizer, which decision (FID) is taken by the owner. At the end of stage
could provide cost savings and/or an additional revenue stream. 1.4, due diligence is conducted by the financial institutions,
and the financing concept is finalized. Figure 2–3 shows
2.5 OVERVIEW OF PROJECT STAGES the entire route to follow for project development (from
the perspectives of project developers and of banks) and
The development and implementation process for a
highlights the main activities. The development stages are
biomass project can be broken down into development and
described in more detail in Section 2.6.
implementation of the project.
Figure 2–3 shows the “standard procedure” for new

PROJECT DEVELOPMENT (PREPARATION)
projects, especially if external financing is involved. If the
1.1 Project idea project is fully owner-financed, many of the steps may be
1.2 Pre-feasibility study avoided or reduced. This may be the case for many industrial
biomass projects.
1.3 Feasibility study
1.4 Contracts and financing Figure 2–4 shows the entire route to follow for project
implementation, from the perspectives of project developers
and of banks.

Figure 2-3: Project Development Stages
BANK PERSPECTIVE DEVELOPER PERSPECTIVE
STAGE 1 1.1 Project idea
• Identification of industrial, forestry or agricultural

biomass residues
• Funding of project development
• Development of outline technical concept
• Assessment of available biomass and related
supply chain
STAGE 2 1.2 Pre-feasibility study
• Assessment of different technical options

• Approximate cost/benefits
• Permitting needs
• Market assessment for biomass feedstock and
sale of produced energy
STAGE 3 1.3 Feasibility study
• Technical and financial evaluation of preferred option

• First contact with • Assessment of environmental and social risks
project developer. • Assessment of financing options
• Initiation of permitting process
STAGE 4 1.4 Contracts and financing
• Permitting
• Lenders’ due diligence • Procurement strategy
• Financing concept • Suppliers selection and contract negotiation
in place • Biomass supply agreements negotiated
• PPA negotiated
• ESIA
• Financing of project
Source: IFC, 2015; COWI.
Implementation stages 2.1 to 2.3 take the project from however, is done at the owner’s own risk, and the contract
financial investment decision to start of operation of the therefore must include a clause concerning pending
biomass plant. The implementation phase is described in approvals. Typically, a design agreement is signed with the
more detail in Section 2.7. EPC contractor allowing the contractor to start the design
but not to order any materials. Reservation of special
It should be noted that mandatory requirements stipulated by materials, such as boiler tubes, may be necessary, and this
the banks (signed power purchase agreement, environmental often involves payment of a reservation fee.
impact assessment in place, etc.) must be met in order to make
the loan agreement effective (financial close).1 Note that a project development and implementation process
may not always follow the simple linear progression as
The owner may decide to start the design stage by signing shown in Figures 2-3 and 2-4.
the prepared contract with the EPC contractor. This,
1 Financial close may be reached when the project is already

under construction or even in operation.

Figure 2-4: Project Implementation Stages
BANK PERSPECTIVE DEVELOPER PERSPECTIVE
STAGE 5 2.1 Preparation and review of detailed design
• Follow up on contractors detailed design

• Preparation of detailed design for other lots
• Financial close* • Preparation of detailed project
implementation schedule
• Finalization of permitting process
• Contingent PPA signed
STAGE 6 2.2 Construction
• Supervision of construction
• Continued follow up on contractors’ quality
• Review of construction control, commissioning schedule etc.
STAGE 7 2.3 Commissioning
• Follow up on cold and warm testing

• Performance testing and trial run
• Review of commissioning • Preparation of as built design (if required)
• Handing over
STAGE 8 2.4 Operation
• Supervision of operational performance

• Review of operation • Supervision of major maintenance
STAGE 9 2.5 Decommissioning
• Preparation of plans prior to decommissioning

• Review of decommissioning • Supervision of decommissioning
Source: IFC, 2015; COWI.

* Financial close may be reached when the project is already under construction or even in operation.
2.6 PROJECT DEVELOPMENT The typical pre-feasibility study may cover the following issues:
2.6.1 PROJECT IDEA
• Description of the biomass fuel resource (amount,
An opportunity for a potential biomass project may be characteristics, price, transport, logistic, need for
identified by the owner of an industrial enterprise or by a supplementary fuel, etc.)
professional project developer. This stage is described in
• Barriers for the project
more detail in Section 2.1.
• Potential technical concepts (several concepts may be
2.6.2 PRE-FEASIBILITY STUDY STAGE
identified and briefly assessed)
The pre-feasibility study is the first assessment of the potential
• Calculation of expected energy production (electricity,
project. It is a high-level review of the main aspects of the
steam, heat)
project, and the purpose is to decide if it is worth taking the
project forward and investing further money and time. • Preliminary layout

• Possibility to connect to the electrical grid (distance to
grid, voltage level, costs for connection, etc.) Time and Cost Implications
Depending on the size and complexity, the associated costs
• Preliminary assessment of energy sales (PPA, electricity
and the time needed may vary substantially. The authorities
price, heat price, steam price, etc.) normally are not involved in a pre-feasibility study, and it
therefore can be conducted quite quickly, typically in two
• Preliminary assessment of alternative sites (access to site, to six months.
size, connection to grid, sewer, etc.) The associated cost also may vary substantially but
is typically between $20,000 (for a small and less-
• Preliminary assessment of alternative locations complicated project) and $100,000 (for a large and
complicated project).
• Preliminary assessment of environmental and social risks
and impacts
2.6.3 FEASIBILITY STUDY STAGE
• Preliminary assessment of construction costs (CAPEX)
and operating costs (OPEX) If the outcome of the pre-feasibility study is favorable, a
detailed feasibility study will follow. This feasibility study
• Preliminary financial analysis
consists of a significantly more detailed assessment of all
• Preliminary risk assessment aspects of the project. The purpose of the feasibility study
• Preliminary assessment of necessary permitting and licensing is to explore the project in enough detail for the interested
parties and stakeholders to make a commitment to proceed
• Planning and project implementation, including tentative
with its development.
time schedule.
Figure 2–5 shows a typical table of contents for a Financial Institutions involved may require the preparation of a
pre-feasibility study for a biomass project. “bankable feasibility study.” The bankable feasibility study may
include an environmental and social impact assessment (ESIA).
Figure 2-5: Typical Contents of a Pre-Feasibility Study
A well-detailed technical description, rough layout, plant main
1. Introduction
data, etc. are needed in order to estimate the CAPEX/OPEX and
2. Conclusion and recommendations

to conduct, for example, a detailed environmental assessment.
3. Description of the project

Consequently, a conceptual design study is necessary.
4. Expected energy production

CONCEPTUAL DESIGN
5. Power and heat demands
6. Preliminary environmental impact assessment

The conceptual design typically comprises:
7. Assessment of alternative sites

• Definition of fuel characteristics, such as composition
8. Layout
and heating value
9. Civil engineering design
10. Electro-mechanical equipment • Description of applied technology

11. Grid connection
• Evaluation of suitable technologies, including fuel
12. Cost estimation (CAPEX/OPEX)
handling, combustion system, boiler, ash handling
13. Permitting and licensing process
and disposal, flue gas treatment technologies to meet
14. Planning and project implementation
applicable and relevant air emission standards, energy
15. Preliminary financial analysis
recovery system, etc.
16. Preliminary risk analysis
17. Appendices
• Assessment of potential plant location(s) following an
evaluation of technical, environmental, and economic
aspects, and local acceptability
Source: COWI.

• Initial assessment of capital costs (CAPEX) and • The conceptual design and required investment
operational expenditures (OPEX)
• Secured long-term supply of biomass (volume, heating
• Assessment of potential use of steam and/or heat. Is it value/properties, and price)
possible to use the heat for industrial purposes, perhaps
• Financial and economic analysis including cost-benefit
as steam? Is there a market for district heating/cooling?
calculations, calculations of net present value (NPV)
• Examination of the connections to the electrical grid, and internal rate of return (IRR), and similar analyses
other external offtake customers, water and wastewater (see Chapter 13)
services, etc.
• Overview of current regulatory and policy framework
A preliminary business case, including cash flow for the relevant to the project
project’s depreciation period, can be prepared based on the
• Assessment of potential additional sources of financing,
information collected above and on the budgetary figures for
sensitivity analyses, and risk analyses important to
CAPEX and OPEX.
financing institutions (see Chapter 14)
BANKABLE FEASIBILITY STUDY • Assessment of potential risks to the financial viability
International financial institutions normally require a full of the project and suggestions of mitigation measures
bankable feasibility study to be conducted before financing • Environmental and social impact assessment, including
concepts can be finalized. The following items could be identification of mitigation measures
included in a bankable feasibility study, but the exact scope
• Organization studies of potential O&M service companies
will be determined for each project, since different investors
will have different demands for the study. The basis is the • Procurement plan and identification of potential
data determined under the conceptual design, but normally equipment suppliers and contractors
some items will have to be investigated more thoroughly:
• Implementation plan, including time and financing schedule.
Name and location: Mondi Richards Bay,

Republic of South Africa
Project: The replacement of coal (fossil fuel)

by biomass residues in an existing
co-fired boiler that produces steam
at the Mondi operation
Description: The project activity was designed

to increase the use of self-generated
bark and to enable the introduction
of third-party-generated biomass
residues as feed into a co-fired boiler
for the generation of steam
Boiler data: 83 bar / 483 °C, chain-grate boiler

originally designed for coal
Turbine output: 49 MW + various steam extractions
Fuel: Biomass residues from chipping facilities,

plantagen, and bark
Source: TGM, 2016, www.grupotgm.com.br.

AUTHORITY PERMITS 2.6.4 CONTRACTS AND FINANCING STAGE
Although the permitting process differs by country, there are The contracts and financing stage takes the project from the
some similarities, and investors normally seek to obtain all feasibility study to FID by the project owner. This involves
important permits before the final investment decision (FID) is moving the project forward on a number of fronts, including
made. At that point in time, detailed design and procurement outline design and selection of contractor(s).
can start unless the owner intends to proceed at her or his
own risk with the planning before FID. This may optimize Selection of contractors can be done several ways via
and reduce the project time schedule (if this is important). public procurement, including competition among qualified
potential bidders, or via a dialogue-based procurement
The following elements are normally part of the process with one or several potential contractors. The
permitting process: outcome of stage 1.4 is typically an EPC contract ready for
signature that allows the project owner to prepare a fairly
• Environmental permit based on the environmental impact accurate investment budget.
assessment prepared as per regulatory requirements
The time needed for procurement is typically 5 to 12 months.
• Planning permission
• Building permit The procurement process is further described in Chapter 7,

and financing is further described in Chapters 13 and 14.
• Power grid connection approval, if relevant
• District heating system, if relevant 2.7 PROJECT IMPLEMENTATION

• Approval for wastewater discharge, if any. 2.7.1 DESIGN STAGE
If the feasibility study indicates that the project is viable, the The key systems and structures will be designed in detail.
next stage of the project can be started. The completion is generally done by one or several
contractors and/or a consultant.
The content of a feasibility study is, in principle, outlined as
the pre-feasibility study shown in Figure 2–5. Considerations concerning the design are outlined in Chapter 6.
2.7.2 CONSTRUCTION STAGE
Time and Cost Implications The physical construction of the project includes follow-up
A full bankable feasibility study, including an environmental on the contractor and site supervision.
and social impact assessment, may take as long as 12 to
18 months, depending mainly on the demands for the
Chapter 8 outlines the construction issues.
assessment by the local authorities.
The associated cost also may vary substantially but 2.7.3 COMMISSIONING AND TESTING STAGE
is typically between $100,000 for a small and less-
complicated project and $300,000 for the bankable The commissioning stage includes a cold and hot test, a
feasibility study.
functional test, a trial run, a performance test, and handing
over to the owner.
Depending on the size and complexity, the associated costs Chapter 8 describes commissioning in more detail.
and the time needed may vary substantially.

Source: COWI.
18 The Biomass Resource

THE BIOMASS RESOURCE
3
This chapter identifies the most important types of biomass 3.1 TYPICAL BIOMASS RESOURCES AND SUPPLY
residues and waste streams available for bioenergy production CHAINS
globally and provides an overview and introduction to these Figure 3–1 shows the most suitable biomass types (primary,
different sources of feedstock for biomass-to-energy projects. secondary, and tertiary) and their supply chains.
The availability, amount, and type of biomass will determine The figure provides a flow chart for biomass waste and
the types of technologies appropriate for the specific biomass residues available for energy production in developing
project. This approach reflects that a number of generic countries and emerging economies across the globe.
supply chains will dominate for each type of project based on
the availability of biomass and choice of technology. Section This guide focuses on biomass types that are secondary and
3.2 characterizes the relevant feedstock. Section 3.3 presents tertiary outputs from production. Primary biomass sources
the classification of biomass types, and Section 3.4 presents for energy production (that is, dedicated energy crops) are
potential resource constraints and how to identify these. another option that can be economically or environmentally
feasible in some situations; however, they are not the focus
of this guide.
Figure 3-1: Flow Chart of Biomass, from Field to Plant
Primary
Resources
(no previous uses)
Secondary
Harvest
residuals
Secondary
resources T/S/P
LAND OTHER
USERS PROCESSING POWER PLANT
Residuals
Waste
Tertiary
(end-of-life products)
Waste
WASTE
Source: COWI.

For each of the typical biomass types, this chapter presents generation. Secondary sources also refer to any byproducts
the following information: from production, such as black liquor from paper production.
• Industry (agriculture, forestry, food production) Tertiary sources refer to end-of-life materials, such as
discarded wood products or household waste and other
• Type (primary, secondary, tertiary)
biological waste.
• Feedstock (wood, agricultural)
• Characteristics (calorific value, biogas potential, 3.2 CHARACTERIZING BIOMASS AND FEEDSTOCK

chemical composition, moisture content) Biomass and feedstocks can be characterized in several
• Energy conversion process applicable (boiler, gasification). ways, including in terms of inherent physical and chemical
properties, such as bulk density and moisture content,
Table 3–1 provides a cross-cutting overview of the different
and in terms of origin and type. For the latter, it is
types of biomass available from primary, secondary, and
important, in order to assess a number of environmental
tertiary sources. Primary sources refer to energy crops harvested
and socioeconomic issues, whether the biomass is primary,
for the purpose of energy generation; no other use of the crop
secondary, or tertiary. Answering a number of questions
is foreseen. These include woody biomass, such as plantation
on sourcing and value chain linkages can help identify the
trees (for example, eucalyptus), and herbaceous biomass, such
biomass type.
as energy grass or grain (for example, for biofuel production).
3.2.1 PHYSICAL AND CHEMICAL CHARACTERISTICS
Secondary crops refer to byproducts used for energy
When the selected biomass resources have been identified,
production. As such, the main crop harvested (for example,
it is relevant to clarify their characteristics. Identifying the
grain for food and feed) is not used for energy generation, but
chemical and physical properties of the selected biomass
any residues (straw, husks, shells) are. Similarly, for woody
resource is essential for assessing the energy output when
biomass, the main crop is not used for energy generation (for
applying different technologies and estimating the associated
example, wood is harvested for use as planks or in paper
investment and O&M costs.
production), while logging byproducts are used for energy
Table 3-1: Biomass Overview

Biomass from Fruits
Woody Biomass Herbaceous Biomass and Seeds Other (Including Mixtures)
Wood fuels Agro-fuels

Primary • Energy forest trees • Energy grass • Energy grain
(Energy crops) • Energy plantation trees • Energy whole cereal
Secondary • Thinning byproducts Crop production byproducts • Animal byproducts

(Byproducts) • Logging byproducts • Horticultural byproducts
• Straw • Stones, shells, husks
• Landscape management
byproducts
• Wood processing industry • Fiber crop processing • Food processing • Bio-sludge

byproducts byproducts industry byproducts
• Slaughter byproducts
• Black liquor
Tertiary • Used wood • Used fiber products • Used products

(End-use materials) of fruits and seeds
Source: COWI.

The characterization of the biomass feedstock includes its a thorough characterization of the biomass feedstock,
chemical and physical properties (for example, trading form, including pictures of the biomass and detailed chemical
calorific value, biogas potential, bulk density, ash content, composition (percentage of lignin, cellulose, hemi-cellulose,
and moisture content). Table 3–2 describes and presents and extractives).
these properties for each feedstock. Appendix B provides
Table 3-2: Characterization of the Biomass Feedstock

Most Choice of Net Biogas Potential
Common Energy Calorific (milliliters of Moisture
Trading Conversion Value methane/grams Bulk Density Ash Content Content
No Feedstock Form Technology (MJ/kg) of volatile solids) (kg/m³) (% dry bulk) (%)
1 Coniferous stem wood, chips combustion 19.1 n.a. 330 0.4 30–55
without bark (18.5–19.8) (310–350) (0.3–0.6)
2 Logging residues, chips combustion 18.5–20.5 n.a. 300 3 35–55
coniferous (270–360) (1–10)
3 Wheat straw bales combustion/ 16.6–20.1 240–440 20–40 no data no data
fermentation (loose)
4 Used wood 20–80 combustion 18.6–18.9 n.a. 200 0.5–2 15–30
(postconsumer wood, (chopped) (140–260)
recycled wood,
untreated)
5 Bark, coniferous 110–200 combustion 17.5–20.5 n.a. 240–360 1–5 50–65
(debarking residues) (baled)
6 Delimed broadleaved 560–710 combustion 15.0–19.2 n.a. 220–260 0.3–1.5 10–50
stem wood with bark (pelletized)
7 Poplar hog fuel combustion 18 n.a. 340 1.2 5–15
(17.3–20.9) (320–400) (0.2–2.7)
8 Cereal straw shredded combustion/ 14.8–20.5 245–445 20–40 6.7 15
fermentation (loose) (1.3–13.5) (8–25)
9 Pruning from olive trees chips combustion 16.3 n.a. 250 3.5 25
(16.0–18.5) (220–270) (4.5–5.5) (10–50)
10 Eucalyptus chips combustion 18.5 n.a. 250 1.2 10
(17.0–21.6) (220–260) (0.2–6.1) (5–50)
11 Paulowina bales combustion 18.6 n.a. 250 1.1 10
(18–20) (220–260) (0.5–3.5) (5–30)
12 Willow (Salix) 20–80 combustion 19.8 n.a. 330 1.5 40
(chopped) (19–21) (300–390) (1–3) (35–50)
13 Reed canary grass 110–200 combustion/ 16.6 280–410 150–200 8 15
(baled) fermentation (14.6–17.5) (bales) (3–22) (5–35)
14 Barley straw 560–710 combustion/ 18.9 240–320 20–40 4.5–9 15
(pelletized) fermentation (loose) (5–35)
20-80
(chopped)
110–200
(baled)
560–710
(pelletized)
15 Empty fruit bunch chips combustion/ 11.5–14.5 264 100–200 1.3–13.7 61–72
fermentation
(Continued)

Table 3-2: Characterization of the Biomass Feedstock (continued)
16 Bamboo chips combustion 16.9 n.a. 200 7.7 15
(5–30)
17 Sugarcane bagasse chips combustion/ 16.7 72–200 130 (120–160) 9 50
fermentation (15–19.4) (4.5–25) (48–53)
18 Corn cobs chips combustion/ 14 330 160–210 15 8–20
fermentation (1–40)
19 Rice husk bales, fermentation/ 12–16 49 100 17–24 10
chopped combustion (49–495)
20 Rice straw bales fermentation/ 14.5–15.3 280–300 20–40 14–16 10–20
combustion (loose)
20-80
(chopped)
110–200
(baled)
560–710
(pelletized)
21 Switch grass 20–80 fermentation/ 15.7 246 49–266 4.3 8–15
(chopped) combustion (chopped)
22 Chicken manure 110–200 fermentation/ 9–13.5 156–295 230 24 6–22
(baled) combustion
23 Dairy manure 560–710 fermentation/ no data 51–500 depends on 25.2 10–75
(pelletized) combustion moisture
content
24 Swine manure bales, fermentation/ no data 322–449 depends on 27.6 10–85
briquettes combustion moisture
content
25 Palm kernel shells chips combustion 15.6–22.1 n.a. 450 3.2–6.7 no data
26 Banana peel chopped fermentation no data 223–336 depends on 11.4 no data
moisture
content
27 Cassava peels chopped fermentation no data 272–352 depends on 4.5 29–66
moisture
content
28 Tobacco leaves bulk fermentation/ 18 289 depends on 17.2 ~10
combustion (calculated) moisture (dried)
content
29 Tobacco stalk bales fermentation/ 19 163 depends on 2.4 6
combustion moisture (dried)
content
30 Recycled paper 20–80 combustion 12.8 n.a. 431 89.2 5
(chopped) (compacted)
31 Sewage sludge 110–200 fermentation/ no data 12–35 depends on 12–35 55–97
(baled) combustion moisture
content
(Continued)

Table 3-2: Characterization of the Biomass Feedstock (continued)
32 Residuals from bulk fermentation no data no data depends on no data no data
slaughterhouses moisture
content
33 Residuals from dairies bulk fermentation no data no data depends on no data no data
moisture
content
34 Residuals from bulk fermentation 12–27.8 no data no data no data no data
breweries
35 Palm oil mill effluent bulk fermentation 0.5 no data no data no data no data
Source: See Appendix B.
3.3 BIOMASS TYPE 3.4 BIOMASS POTENTIAL AND BARRIERS
To decide on the type of a given biomass or feedstock, the

key below may be used. It introduces a number of questions, Guidance: “Biomass of Sufficient Quality”
mainly concerning alternative uses of the biomass and • When this guide discusses the importance of biomass of
feedstock, that can help classify this material. All biomass a “sufficient quality,” it is important to remember that
this term depends on the technology chosen.
and feedstock should first be evaluated posing the questions
• The quality of the biomass can be improved through
in Figure 3–2 below.
pretreatment; thus, quality is not a fixed term, but it will
have an effect on CAPEX. An example of this is drying
Figure 3-2: Biomass Classification the biomass.
• Biomass with undesirable qualities, such as a high
ash content, likewise can be bypassed, for example by
Do alternative, economically improving the technology. This also will have an effect
No
Q1 viable options besides landfilling Tertiary on CAPEX.
or otherwise disposing of the
feedstock exist? • If the fuel is very wet, usually above 60 to 65 percent, a
combustion process is out of the question, and biogas is
the relevant option.
The availability of biomass for energy production is affected

Is the feedstock No by different factors on various spatial scales. On a global
Q2 produced and Secondary scale, it is dependent on land availability and productivity.
harvested
Yes exclusively for These features are, in turn, shaped by macro-drivers, such as
energy purposes?
global population, food consumption and diet, yield growth
and potentials, and economic development (Slade et al.,
2011; Bauen and Slade, 2013). On a regional scale, political
and economic factors, such as market accessibility, policy
development, and trade patterns affect the size of the resource.
Primary
Yes Local access is restricted by infrastructure, natural components
such as climate and water availability, and economic aspects,
such as competition for resources and opportunities for
Source: COWI. handling, processing, or storing resources, as well as by general

infrastructural aspects, such as road access, port facilities, residue for which production is seasonally determined (such
railways, and other transport corridors. as where crop harvesting takes place only in the summer), no
residues will be available for the rest of the year.
3.4.1 ASSESSMENT OF POTENTIAL RESOURCE
CONSTRAINTS
Identifying any potential constraints at this stage of the
Further to the technical description of the biomass or project includes assessing the climatic factors (for example,
feedstock, each combination of a supply chain with a biomass precipitation or average temperature) and biogeographical
or feedstock will result in a number of potential constraints factors (for example, biodiversity, water supply, altitude, and
that should be considered. All of the constraints essentially nutrient availability) that influence the production of a given
relate to the question: Can the given biomass feedstock be biomass or feedstock (Table 3-3). Some biomass types will
supplied in sufficient amount and quality and with sufficient thrive only in very specific climates, while others are more
supply stability and reliability? For example, for a crop generalist and can grow in a range of different climates.
Table 3-3: Sample Questions to Consider When Assessing Constraints or Risks Associated with Biomass Feedstock
Factor Typical Questions Aspects to Consider
Water Are sufficient water resources available locally Look up data on water needs and, for example, drought or flooding
to meet any increased water demand because resilience of relevant crops or trees.
of the project?
Many types of bioenergy crops and trees are highly dependent on
Is the water requirement for the project water availability for their growth. If the water resource becomes
sustainable in the long term? scarce, so will the biomass resource.
What impact will the project have on
community water uses?
Climate zone Are weather hazards or adverse climatic Search for a local climate or weather risk assessment and compare it to
conditions present in the project sourcing the production systems on which the project’s supply chain depends.
region that can put the necessary production
Search for a map or digital tool showing growing conditions in the
and supply of biomass at risk, permanently or
sourcing area, chiefly water availability (rainfall and evaporation),
in certain periods?
radiation, and, if relevant, growing degree days. Aspects such as slope
Are the crops, forests, or animals needed for and pests also may be relevant.
the supply of biomass or feedstock suited for
Consider that every crop will have its ideal growing conditions. For
the local climate?
example, crops such as sugar cane do not grow in colder temperate and
boreal regions but primarily in subtropical and tropical regions.
Soil and land Is enough productive land with suitable soil If the sourcing region for the biomass or feedstock is high-intensity
types available to grow the needed biomass? productive land, any major shift in demand for a particular biomass or
feedstock may induce changes in land use.
Can the available land—and its soils—deliver
biomass or feedstock of sufficient and stable In mountainous regions, in regions with much degraded land, and in
quality for the project? areas with waterlogged soils or permafrost, land can be of limited use
and thus can become a constraint.
Is the productive land that will supply biomass
or feedstock for the project in a state and Some crops or trees have specific requirements as concerns soil type.
condition to withstand weather hazards or Consider if the biomass or feedstock have particular issues in this regard.
climate change without significant disruption
of production?
Biodiversity Will the biodiversity of the area be negatively Conflict could arise, for example, in land areas where biodiversity is the
affected by the sourcing of biomass or basis of local income generation, such in national parks that benefit
production of energy? from tourism.
Is the source area for the biomass home to If agricultural production is dependent on rich biodiversity (such as in
endangered or rare, endemic species? low-input, extensive grazing-dependent farming systems), changes in
land management intensity may result in loss of biodiversity, reduced
climate resilience, or erosion, leading to social consequences for farmers.
Source: COWI.

Table 3–3 presents some important factors to consider in In the second phase of project development, the developer
relation to feedstock availability and quality. Environmental should perform a pre-feasibility study (see Figure 2–3 in
or socioeconomic concerns related to sourcing of biomass Chapter 2). This includes initiating an investigation of the
should be considered as part of a broader environmental availability of biomass in sufficient amounts and quality.
screening in a feasibility study. Guidance on this can be Table 3–4 presents an overview of the typical questions a
found in Chapter 15. project developer must ask during investigation
of the feedstock.
For the project developer to select the best biomass available,
it is necessary to screen the area with regard to supply chain
aspects, such as whether the right infrastructure, technical
knowledge, and economic opportunities exist in the area.
Table 3-4: Supply Chain Questionnaire

Biomass Growth and
Supply Chain Harvesting Storage Transport Conversion
Harvesting Does the infrastructure exist Does the infrastructure Does the infrastructure Does the infrastructure exist
to enable harvesting exist for storage of the exist for transport of the for conversion of the biomass
of the biomass? biomass? biomass? to the required type?
Technical Does the technical Does the technical Does the technical Does the technical knowledge
knowledge knowledge exist on how to knowledge exist on how knowledge exist on how to exist on how to convert the
harvest the biomass, and is to store the biomass, transport the biomass? biomass to the required type?
the technology (for example, and is storing capacity
machines) available? available?
Economic Is harvesting of the biomass Is storing the biomass Is transporting the biomass Is conversion of the biomass
opportunities economically feasible? economically feasible? economically feasible? to the required type
economically feasible?
Energy Will energy be needed for Will energy be needed for Will energy be needed for Will energy be needed for
harvesting, and is it available storage, and is it available transport, and is it available conversion, and is it available
(at the right cost)? (at the right cost)? (at the right cost)? (at the right cost)?
Source: COWI.

Source: COWI.
26 Securing Biomass Supply

SECURING BIOMASS SUPPLY
4
Establishing a secure biomass supply is a precondition for Mapping the biomass availability therefore is a prerequisite
a successful biomass project. Securing a year-round, stable for securing the technical and financial viability of the
supply of biomass of a sufficient quality depends on both the project, as explained in Chapters 13 and 14.
availability of the biomass and the effectiveness and stability
of the supply chain. This chapter discusses the concepts of For biomass that is available on-site (industrial waste
biomass availability and biomass supply chain and provides products), an important aspect to be assessed is the generation
the tools for analyzing them. of waste products by production process (including possible
seasonal variations, which may be significant).
4.1 ASSESSING BIOMASS AVAILABILITY
When charting off-site biomass resources, the following
This section provides an assessment of the minimum amounts aspects should be investigated:
of biomass needed for a biomass project to be technically
feasible (Table 4-1). The section also discusses security of • Area (in hectares) of the crop or vegetation type where
supply, including supplier risks, seasonal variation, and the the biomass is obtained
possible need for supplementary purchase of other types of
• Annual production of the main product obtained from
biomass residues or wood pellets in case of shortage of supply.
this area (in metric tons “as harvested” for crops, in
4.1.1 MINIMUM SUPPLY OF BIOMASS cubic meters processed for wood logs)
When investing in a biomass plant, a project developer • Yield, in metric tons harvested per hectare (green tons
must be certain that the plant will receive sufficient biomass per hectare) or in cubic meters per hectare for wood
to keep the plant running and keep the project financially • Ratio of residual biomass to main product (a coefficient)
viable. If the developer fails to convince potential investors
• Dry matter content (DMC) in the residual biomass:
of the project’s financial viability, the project is unlikely to
receive financing on reasonable terms.
Moisture content

(
DMC = 1 - ————————————
100
)
4.1.2 AMOUNTS AND QUALITY
A documented constant supply of biomass of sufficient

quantity and quality is vital for realizing a biomass project.
Table 4-1: Biomass Amounts and Plant Sizes

1–5 MWe 5–10 MWe 10–40 MWe
Combustion plants using a water/steam boiler 20–100 tons per day 100–200 tons per day 200–900 tons per day
Combustion plants using ORC technology 50–200 tons per day 200–500 tons per day n.a.
Biogas production with gas engine 40–200 tons per day n.a. n.a.
Source: COWI.
* Biomass tonnages at an average calorific value of 10 megajoules per kilogram assuming 100 percent load.

• Accessibility coefficient (fraction of the area where 4.1.3 SEASONAL VARIATION
residual biomass produced can be collected)
If the energy production depends on waste or residues from
• Harvest coefficient (fraction of residual biomass agricultural or forestry production, the seasonal variation of
accessible that can be recovered) the primary source of biomass becomes a determining factor
in its availability. It therefore is essential to map the seasonal
• Unused fraction (the part of recoverable biomass that is
variation for the most common crops that deliver secondary
not currently used for other purposes).
or tertiary biomass suitable for energy production.
The answers to these questions will enable more accurate
calculation of the biomass potential available for energy For example, in the case of Mexico, the most common
production. Figure 4–1 illustrates a rough example of the agricultural crops were mapped to identify their seasonal
calculation methodology. variation, and their potential availability for energy
production across the year. Figure 4–2 illustrates that wheat,
Once the biomass potential has been estimated, it is necessary sorghum, and maize/corn are strongly seasonal, while coffee,
to take into account seasonal variations. A biomass plant sugarcane, and rice have partial seasonality.
requires a stable supply of biomass to ensure good capacity
utilization. If the preferred biomass is available only eight This case example illustrates a mapping of agricultural crops
months of the year, supplementary biomass may need to where some crops have a stable output year-around, whereas
be identified and sourced. Section 4.1.3 explains the issues others are subject to seasonal variation. Note that the
related to seasonal variation, and Section 4.1.5 explains seasonality of crops will vary across continents and climate
aspects of supplementary biomass. zones and also is subject to regional conditions.
Figure 4-1: Calculation Methodology for Biomass Availability
Annual Ratio of Biomass

production residual Accessibility Harvest Unused available for
of primary biomass to coefficient coefficient fraction energy
product main product (%) (%) (%) production
(ton) (%) (ton)
Source: COWI.
Calculating the Available Biomass

Amount
Biomass availability is essential for a biomass-based energy Annual production of primary 50,000 tons per year
project. The example below illustrates how to estimate the product (tons) of sugarcane
amounts of biomass available for energy production, based on
residues from primary crop production. Ratio of residual biomass to main 30%
product (%)
Accessibility coefficient (%) 95%
50,000 x 0.30 x 0.95 x 1 x 0.80 = 11,400 Harvest coefficient (%) 100%
Unused fraction (%) 80%
Biomass available for energy 11,400 tons of

production (tons) sugarcane residues
Source: COWI.

Figure 4-2: Seasonality of Agricultural Crops
Agricultural crops harvesting pattern (Mexico)

70%
60% Wheat
Sorghum
50%
Maize
Production
40%
Coffee
30%
Sugarcane
20%
Rice
10% Copra
0%
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
Source: COWI.
If the available biomass has seasonal variability, it is the plant. If a large share of the necessary biomass is located
important to assess whether the available amounts at any far from the plant, significant transport costs must be taken
time during the year are below the optimal and minimum into account. The further the transport distance, the higher
biomass amounts needed for the plant. the risk of delays or lack of supply.
If available biomass amounts drop below the amount needed Thus, the security and costs of supply is linked to the
to secure optimal energy production, it will be necessary distance between the plant and the biomass source.
to supplement with other biomass types. If the available
biomass drops below the minimum amount necessary for Figure 4–3 presents an example of a mapping of the
keeping the plant running, this could constitute a serious risk available biomass and distance from the biomass to plant.
to the project. A reliable supplementary biomass supplier

4.1.5 NEED FOR SUPPLEMENTARY BIOMASS
should then be located before proceeding with project
development, provided that other mitigation options are not A biomass plant may require supplementary biomass for
available. The compatibility of the supplementary biomass several reasons:
with the preferred biomass should be assessed before • Insufficient biomass availability
proceeding with procurement. • Insufficient biomass quality
The risk of seasonality can be mitigated through the • Significant seasonal variation in the biomass stock.
availability of proper storage facilities on-site or locally. If If supplementary biomass is needed for the plant, the
sufficient quality can be stored post-harvest until the biomass developer should commence a mapping of other available
is needed for energy production, seasonality becomes less biomass residues in the region. If no other biomass residues
problematic. However, storage of large quantities of biomass are available, the developer should investigate if any
can be costly, and the need for storage facilities can affect the secondary biomass is available for import, or if suitable
viability of a biomass project. primary biomass is available in the region. As a final
solution, the developer should consider the possibilities
4.1.4 DISTANCE
for imported primary biomass. This, however, could
Besides determining the amounts and availability of the compromise the financial viability of the project, as the price
biomass, it is important to map its location and proximity to for biomass could significantly increase.

Figure 4-3: Map of Distance from Biomass Resource to Project Site
Source: COWI.
4.1.6 BIOMASS SUPPLY CHAIN • Who will be in charge of transport of the biomass?
When an acceptable supply of biomass has been located, a • What related contractual arrangements are needed?
supply chain should be established. This includes identifying
Storage:
the owners of the biomass, agreeing on prices (which
• What are the requirements for on-site storage (volume,
frequently are assumed to be zero, but this often is not the
safety, dry storage, etc.)?
case), settling supplier contracts, and arranging transport
and storage of the biomass, all within the constraints of When setting up the supply chain, the developer should keep
maintaining a financial viable project. in mind the financial viability of the project. The plant needs
the best-quality biomass possible, at the lowest possible costs.
The project developer should complete the following steps to
secure a stable and reliable biomass supply chain: The contractual agreements must be set up to secure the project
developer a long-term, stable supply of biomass of a certain
Owners of the biomass: quality. The agreements of supply and transport should include
• The owners shall be identified incentives for the counterpart to uphold their part of the
agreement. Chapter 11 goes in-depth into the contractual relations.
• The price of the biomass must be determined
• Contractual arrangements for biomass supply

must be negotiated.
Indicative supply chain costs:
Transport:
• Costs of biomass: $35 per ton
• How will the biomass be collected?
• Costs of storage: $11.5 per ton
• How will the biomass be transported? • Costs of loading: $5 per ton
• What types of trucks/machinery are available and suitable? • Costs of transport by truck: $0.12 per ton per kilometer

Biomass with low DMC generally should be procured
Calculation example of the impact of the transport near to the plant or the DMC should be increased
distance
prior to transport (for example, by drying). Note that
To supplement the on-site supply of biomass, the project
the greenhouse-gas emissions profile and the emission
owner will buy 10,000 tons of logging residues. The logging
residues have to be transported 25 kilometers to the reductions achieved by the biomass-to-energy project can
biomass-to-energy plant. be compromised if transport distances are increased.
The cost of transport totals $93,000, or $9.30 per ton.
The transport cost is a little less than 10 percent of the
• Care should be taken that procured biomass is not
operational expenditure (including maintenance). currently used by local communities, whose livelihood,
If the distance were instead 200 kilometers, the total food security, or other social aspects could be put at risk
cost of transport would be $336,000, or $33.60 per ton. In by the use of this biomass. This is a particular concern
this case, the transport cost is around 30 percent of the
operational expenditure (including maintenance). for primary and agriculturally related biomass resources
The cost of transport is not correlated linearly with the

that can be used as food or feed (such as crops or straw).
distance, as there are fixed costs related to the handling of the Procuring significant amounts of a given biomass also
biomass volume. The handling cost for transport is $5 per ton. can affect local markets, increasing prices of the biomass
Source: COWI. and related commodities, which can have an impact on
local livelihoods.
A main risk when seeking to establish a supply chain for
• The impact on the local environment should be taken
biomass projects is that many developing countries lack
into account before procuring biomass. It is essential to
a well-functioning biomass supply market, including the
ensure that procured biomass does not lead to increased
necessary transport, storage, and handling facilities. An
local production through clearing of forested land or
investor planning a biomass project may not be able to find
unsustainable intensification of production.
a reliable supplier who can guarantee a specified amount,
quality, and price for the biomass feedstock for a reasonable In general, procuring primary biomass constitutes larger
length of time (for example, 10 years). social and environmental impacts than the use of secondary
and tertiary feedstocks.
The key issues relate to infrastructure and logistics (collecting,
storing, handling, and delivering biomass), lack of incentives Regardless of the type of feedstock, whether local or
(financial or otherwise), and available low-cost alternatives (for imported, it is important to note that procuring biomass can
example, burning the biomass in the field). Another risk is the have environmental and social risks and impacts that would
absence of enforcement of the agreed contracts. If enforcement is need to be properly assessed and appropriately addressed
not realistic, the risk to the project owner increases significantly. before project implementation.
If primary biomass is chosen as the input for energy

4.2 SOCIAL AND ENVIRONMENTAL
generation, in-depth analysis of the environmental, social,
SUSTAINABILITY ISSUES
and financial consequences should be conducted. The use
of primary biomass for energy production could easily have
When procuring and using biomass for energy generation
the following implications:
projects, numerous social and environmental issues can
• Increase in greenhouse-gas emissions (also compared to
arise. It is important that these concerns are considered the use of coal)
when securing biomass supply. Some of these factors are • Increase in food and/or feed prices, with possible
summarized below, providing a brief introduction to the negative impact on livelihoods
information presented in Chapter 15. • High and fluctuating costs of biomass, compromising the
financial viability of the project
• Transport can result in significant emissions, especially • Significant land conversion
for biomass that contains large amounts of water, • Impact on biodiversity and ecosystem services.
meaning that the dry matter content (DMC) is low.

Source: COWI.
32 Energy Conversion Processes

ENERGY CONVERSION PROCESSES
5
The conversion of biomass to energy can happen through Due to this aspect, only technologies considered as proven
various processes and by using different technologies. This and commercial are considered in this guide.
guide focuses mainly on proven technologies appropriate for
projects in developing countries. This chapter presents an These technologies are:
analysis of the selected technologies.
• Biomass combustion plant using grate technology
combined with a water/steam boiler
5.1 OVERVIEW OF APPROPRIATE
TECHNOLOGIES • Biomass combustion plant using bubbling fluidized bed
One of the most important aspects for plant owners is (BFB) technology combined with a water/steam boiler
whether the chosen technology is commercial and proven, as • Biomass combustion plant using circulating fluidized bed
this is crucial for securing a reliable and stable production (CFB) technology combined with a water/steam boiler
of electricity and/or heat/steam. The use of proven and
• Biomass combustion plant using Organic Rankine Cycle
commercial technology is also very important for the
(ORC) technology
financial viability and robustness of the project and thus
affects the possibilities for securing financing. • Biogas plants (anaerobic digestion + gas engine).
Figure 5-1: Overview of Biomass Conversion Technologies and Their Current Development Status
R&D Demonstration Early Commercial

Commercial
Combustion
• Biomass combustion plant using grate firing
technology combined with a water/steam boiler
• Biomass combustion plant using bubbling fluidized
bed firing technology combined with a water/steam
boiler
• Biomass combustion plant using circulating
fluidized bed firing technology combined with
a water/steam boiler
• Biomass combustion plant using Organic Rankine
Cycle (ORC) technology
• Biogas plants (anaerobic digestion)
Thermal gasification
• Downdraft
• Updraft
• Fluid bed
Pretreatment
• Torrefaction
• Pyrolysis/hydrothermal upgrading
Source: COWI.

Finally, in Section 5.5, some promising emerging Table 5–1 lists selected biomass residues suitable for
technologies are presented briefly. These technologies are: combustion and anaerobic digestion in a biogas plant
(production of biogas to be used in a gas engine), respectively.
• Thermal gasification
The selected technologies are applicable in different plant
• Torrefaction
sizes, and Table 5-2 highlights their relevance in the three
• Pyrolysis/hydrothermal upgrading. approximate size ranges 1–5 MWe, 5–10 MWe, and 10–40
MWe. Note that there is not a sharp distinction between
5.2 TECHNOLOGY SELECTION the groups and that overlaps might occur. Furthermore,
Selection of a preferred technology is complex and requires combustion plants using a water/steam cycle also are
careful consideration of the type of biomass, fuel flexibility, applicable for plant sizes above 40 MWe.
load ramping capability, investment cost, plant size, etc.
However, the very early and most important selection relates 5.3 BIOMASS COMBUSTION PLANT
to the moisture content in the fuel. If the fuel is very wet, A biomass combustion plant consists of a number of more
usually above 60 to 65 percent, the calorific value of the or less standardized systems that can normally be supplied
biomass is too low for combustion and a biogas plant is the by several suppliers. Figure 5–2 shows the different systems
only relevant option, unless drying of the fuel is considered. described in the following sections.
Table 5-1: Selection of Technology Based on Biomass

Biomass Typical Humidity Technology Selection
• Manure from animals
• Organic waste material from food
industries
• Sludge from flotation plants and other > 65% Biogas technology
• Vegetable and fruit waste from agriculture
• Other organic waste materials from
industries
• Wood
• Various straw < 60% Combustion technology
• Rice straw and husk
• Other
Source: COWI.
Table 5-2: Overview of Technologies and Plant Sizes

1–5 MWe 5–10 MWe 10–40 MWe
Range (4–20 MWth) (20–40 MWth) (40–160 MWth)
Combustion plants using a water/steam boiler x x x
(steam technology)
Combustion plants using ORC technology x x n.a.
Biogas technology x n.a. n.a.
Source: COWI.
Note: The biomass combustion plants using a water/steam boiler include three types of technologies: grate, bubbling fluidized bed (BFB), and circulating fluidized bed (CFB).

Table 5-3: Steam-cycle Technologies According to Size
Technology 1–5 MWe 5–10 MWe 10–40 MWe
Grate technology x x x
Bubbling fluidized bed (BFB) technology x x
Circulating fluidized bed (CFB) technology x
Source: COWI.
The description follows the flow through the plant, starting 5.3.1 FUEL HANDLING, STORAGE, AND
with the fuel reception, the fuel handling, and the fuel storage PREPARATION
system (called the fuel yard), followed by the combustion Fuel handling, storage, and preparation will differ depending
system (grate, BFB, and CFB systems). Next is the energy on the origins of the biomass fuel (whether it is residue
conversion process, where a boiler converts the energy in the from an industrial process, such as bagasse from sugar
hot combustion flue gases into high-pressure steam, which production; supplementary biomass fuel from a fuel supplier,
finally is transformed into electrical power and process heat. such as wood chips; or locally produced straw/wood).
The steam circuit is closed when the condenser returns the
condensate back to the boiler feed pumps. This is described in In terms of proper fuel handling, the following issues should
Section 5.3.3, and the circuit is shown in Figure 5–13. be considered carefully:
Section 5.3.4 describes the emissions and flue gas cleaning, • Fuel reception, including weighing, general quality
including the types of equipment normally used, such as control, and moisture control
cyclones, baghouse filters, electrostatic precipitators, and
• Storage, including fuel yard management
scrubbers. This is followed by a section on residues and the
ways to handle these. • Potential preparation of the biomass fuel, including
drying, shredding, and grinding.
This technical description of a biomass combustion plants
• Fire risk and strategy, including explosion risk and fire
is followed by two chapters describing electrical and
extinguishing means
distributed control systems (DCS).
Figure 5-2: The Biomass Combustion Plant
Steam
BOILER TURBINE G Power
Proces steam/
ENERGY heat
FLUE GAS
Fuel FUEL YARD COMBUSTION Emission
CLEANING
Ash Ash
Source: COWI.

• Environmental issues, such as dust, fungal spores, noise, FUEL PREPARATION
odor, etc.
For certain applications, it may be necessary or advantageous
• Boiler feeding to prepare the fuel before combustion. This may include:
• Flexibility in handling various fuels.

• Drying
FUEL RECEPTION
• Pelleting
If the biomass fuel originates from the owner’s industrial
• Shredding and/or grinding.
process, a reception control is normally not needed.
Because the moisture content affects the value of biomass as
For external fuel supplies, it is necessary to measure and a fuel, the basis on which the moisture content is measured
register the weight and moisture content of each fuel delivery, must always be mentioned. This is particularly important
as this information forms part of the payment to the fuel because biomass materials exhibit a wide range of moisture
supplier. Weight can be registered on a scale/weigh bridge or content (on a wet basis), ranging from less than 10 percent
in a crane. Registration of moisture content can be done either for cereal grain straw up to 50 to 70 percent for forest
manually with a portable instrument, in a crane with radar residues. Very wet fuels (typically above 60 percent) may be
sensors, or with other online equipment based on microwaves, difficult to combust properly, and drying is therefore needed.
radioactivity, light absorption, etc. Finally, moisture content can This is very costly, however, as additional energy is needed
be detected via manual sampling followed by local laboratory for the drying process (this is typically done with auxiliary
testing, drying the sample for a minimum of 17 hours at 103°C. steam or flue gas).
The weight loss equals the moisture content in the biomass
sample. This test is normally used in small facilities. Pelleting also is an expensive method of fuel preparation and
normally is not needed. Commercial pelleting is used only
Furthermore, a random visual inspection is important, for wood pellets.
especially in the initial period of external biomass supply, in
order to discourage suppliers from trying to deliver a poorer Shredding of fuel may be necessary due to the size or the
quality than agreed in the contract. feeding equipment.
A biomass plant must establish rejection criteria for the Further grinding of the fuel is needed if the boiler requires
fuel supply to be used if fuel deliveries are outside the range fuel in pulverized form. In this case, a hammer mill or similar
agreed in the fuel supply contract. equipment may be needed. Hammer mills however, consumer
large amounts of electricity and require extensive maintenance.
FUEL MANAGEMENT AND STORAGE
An important aspect that greatly influences the investment cost Both shredders and hammer mills are noisy, and necessary
is the storage volume of the fuel yard, especially if covered by a precautions must be taken.
roof/wall. It therefore is important to assess the need for a fuel
FIRE AND EXPLOSION RISK
buffer of up to perhaps two weeks. This depends quite a lot on
the security of supply from the biomass supplier. Cereal grain straw with very low moisture content has a high
potential fire risk, but experience shows that fuels such as
The logistics and management of the large biomass wood chips with a higher moisture content also might cause
quantities necessary is a very important issue that must be a fire. The necessary precautions must be taken to avoid a
considered carefully. serious fire risk with potential for personnel injuries and
production stoppage.

Typical installations used to protect against fire and
Figure 5-3: Combustion Process on a Sloping Grate
explosion may be sprinkler systems above conveyors and
s
handling/unloading areas, points where the conveyor all
w
m
changes direction, etc. A sprinkler system will require large fro
Fu n
e a tio
pumps and large firewater storage, as the local water system l di
Ra
may be insufficient.
Con
When using very dusty fuels, explosions become a latent
v
ecti
risk. An assessment should be made to evaluate the
n o
explosion risk and how to reduce this risk.
5.3.2 COMBUSTION TECHNOLOGIES
r
Ai
This section describes the three combustion technologies
that are used most commonly for biomass-to-energy plants:
grate (including an introduction to the most common types
of grates), bubbling fluidized bed (BFB), and circulating
fluidized bed (CFB). Source: COWI.
GRATE TECHNOLOGY
primary air should be distributed, divided into sections, so that
Grate-fired combustion in a furnace is often called each part of the grate will receive the air needed for its part of
“fixed-bed” technology. Generally, grate-fired units are the different processes (drying, pyrolysis, char burnout).
suitable for fuels with high moisture, high ash content,
and varying particle sizes, but with a lower limit for fine Secondary air is supplied to the furnace above the grate for
particles. The grate technology is used on biomass-fired burning out volatiles and fuel dust particles.
power plants up to 50 MWe.
Tertiary air can be supplied to the upper furnace, with
The actual type and size of grate and furnace to be selected staged combustion, for reduction of nitrogen oxide
will depend on the biomass type, woody or herbaceous fuels, emissions. The lower part of the furnace can then be
combustion behavior, moisture content, ash melting point, operated with a low stoichiometry.
and particle size.
Secondary air is supplied to the furnace above the grate
For the combustion process, and thus the efficiency of the for the burning out of volatiles and fuel dust particles.
boiler, it is essential that the fuel or fuel mixture is well Tertiary air can be supplied to the upper furnace, with staged
distributed in the fuel bed on the grate. The fuel feeding combustion for reduction of the nitrogen oxide emissions.
system is normally designed to control this. The lower part of the furnace can then be operated with a
low stoichiometry.
In all grate-fired boilers, the same process takes place in and
above the fuel bed: The size and combustion quality of the biomass particles
must be taken into consideration when deciding the type of
• Drying of moisture grate firing. The large particles should have sufficient time to
• Pyrolysis and combustion of volatile matter burn out before the ash is removed at the end of the grate.
The small particles, when released from the fuel bed, can
• Combustion of char particles.
cause a higher amount of fly ash, with unburned particles
Primary air is supplied to the fuel bed from under the grate. and carbon monoxide emissions. The operation control of
Heated primary air will boost the drying of wet fuels. The

the grate (bed layer, grate travel velocity, primary air) should Vibrating grates are used for loose-density biomass fuels
serve to integrate and optimize the combustion process. (loose straw, etc.) but also for blends of fuels with different
densities (straw, wood chips). Different parts of the sloping
A blend of different wood fuels is acceptable, but normally grate are vibrated successively.
a blend of woody fuels with straw-like fuels is not
recommended (except for vibrating grates). Step-fired boilers are equipped with a step-like grate
alternating back and forth to move the fuel through the
The melting temperature of the fuel ash, the ash content, combustion zone. Step firing is used for “difficult” biomass
and the furnace gas temperatures also should be taken into fuels and is commonly used in solid waste incinerators.
consideration. High gas temperatures and low ash melting
temperatures can cause severe slagging in the char burnout zone. TRAVELING GRATE
In a traveling grate-fired boiler unit, the fuel bed is moved

The ideal type and size of grate firing selected should take into
continuously from fuel inlet to ash outlet on a belt with
account the fuel type, size, and energy output (heat, power).
“hinged” cast iron grate bars, attached to chains, and moved
The performance of the industrial biomass unit can thus be
by a drive system. Fuel is supplied to the grate by screw
optimized, ensuring a continuous, trouble-free operation.
conveyors (stokers) to give an evenly distributed fuel layer
on the grate.
The most commonly used grates are:
At the back end of the grate, the bars are cleaned for ash and
• Traveling grate
slag. On the way back, the “loose” bars are cooled by the
• Vibrating grate primary air to the grate.
• Step grate.
The combustion process on the grate is controlled by
In small package boilers (<1 MWe), traveling grates are the height of the bed layer, the grate velocity, and the
used for biomass firing. The fuel should be homogeneous combustion air (primary air) to ensure a complete burnout
to ensure ignition and burnout within a short distance. For of the char without slagging or overheating the grate.
larger capacities (up to 50 MWe), traveling grate boilers are
used for power and heat production. A too-high content of fine fuel particles will increase the
amount of fly ash with uncontrolled burnout.
Figure 5-4: Straw-fired CHP plant: 35 MWe and 50 MJ Blends of different biomass fuels should be evenly distributed
Per Second of Heat across the grate, not leaving openings in the fuel bed layer
that will allow primary air to “leak” directly into the
furnace.
The maintenance cost for this type of grate is normally higher,

as the traveling grate chain requires regular maintenance.
The traveling grate principle is well suited for:
• Wet biomass fuels
• High ash fuels
• Fuels with different sizes.
Source: Babcock & Wilcox Vølund A/S.

Figure 5-5: Traveling Grate Principle Figure 5-6: Vibrating Grate
Source: Loo and Koppejan, 2008. Source: COWI.
VIBRATING GRATE A disadvantage with vibrating grates is the high peaks of carbon
monoxide emissions produced during the vibration of the
Vibrating grates are used for various biomass fuels, such as
grate. The maintenance cost for this type of grate is normally
wood chips, loose straw, etc., as this is a cost-effective solution.
considered to be low as there are no moving parts inside the
The grate can consist of one or more sections, each designed combustion chamber that require regular maintenance.
as a membrane wall with air nozzles in the fins. The grate

STEP GRATE
cooling water is integrated with the boiler water/steam system,
and the water cooling protects the grate against overheating. Step grates are commonly used in waste-to-energy incinerators,
but they are also used with difficult biomass fuels. Moving
The grate sections are individually vibrated in cycles and grates are commonly used in small, heat-only biomass
can thus regulate the stages of the combustion process. The boilers (10 to 20 MW fired capacity).
vibration also prevents large slag formations, and the fuel
ash and slag will gradually move down to the ash conveyor. The fuel is fed onto the top of the grate and moves down
the grate as it burns. The step-like cast iron hydraulic
Vibrating grates can also be designed with cast iron grate bars, grates alternate back and forth to push the fuel through
attached to a frame that vibrates on an alternating basis. the combustion zone. At the bottom of the grate, the ash is
dumped into the water-filled ash conveyor.
The primary air is injected from under the grate, and
secondary/tertiary air is supplied to the furnace through The complete grate can consist of more parallel moving grate
nozzles located above the grate. sections (lanes). Each section is cooled with water or air.
Vibrating grates are used especially for straw firing, in which The maintenance cost for this type of grate is normally higher, as
several lines of straw bales are conveyed to the boiler feeding the moving parts of the step grate require regular maintenance.
system. Knives cut the twine, and straw shredders are used
FLUIDIZED BED TECHNOLOGY
to loosen the fuel before feeding the straw onto the grate.
Fluidized bed combustion is used widely for biomass fuels.
Vibrating grates are used in biomass-fired power plant units Two fluidized bed combustion technologies are available:
with a capacity of up to 40 MWe. bubbling fluidized bed (BFB) and circulating fluidized bed
(CFB). Both are proven technologies. BFB boilers are often

Figure 5-7: Step Grate
Source: Justsen Energiteknik A/S, 2016.
preferred in small-scale applications, with fuels having low a gaseous stream (primary air) passes through a bed of
heating value and high moisture content. CFB boilers are solid particles at a velocity sufficient (above the minimum
normally used in larger applications. fluidization velocity) to overcome the particles’ gravity force.
Both types can be used for a wide range of biomasses and Figure 5-8: Principle of BFB and CFB
are especially suitable for fuels with high moisture content

• fuel
and high ash content. Fluidized bed boilers are used for fuels
• bed material
with a high alkaline content, such as straw.
freeboard freeboard
BUBBLING FLUIDIZED BED (BFB)
secondary secondary
The core of the BFB boiler is the combustion chamber or air air
furnace. It features water-cooled walls and bottom. The bottom bed bed
has a full refractory lining, and the lower portion of the water material material
wall is also refractory lined. The bed is fluidized by means of fuel fuel
an arrangement of nozzles at the bottom of the furnace, which

create turbulence that enhances the mixing of the fuel and its
conversion into char. Solid materials stay mostly in the well- primary air primary air
stirred bed, although small particles will leave the bubbling bed
and be thrown up into the freeboard region.
ash ash
bubbing fluidized circulating fluidized
The bed is usually formed by sand mixed with a small bed combustion bed combustion
quantity of fuel. Fluidization of the solids occurs when Source: COWI.

Case Story: Biomass Project for the Paper Industry in Pakistan
PROJECT DESCRIPTION
The large paper manufacturer Bulleh Shah Packaging Ltd., in Kasur, near Lahore in
Punjab, Pakistan, has commissioned a new biomass power plant based mainly on wheat
straw, corn stover, and cotton stalks. The new biomass boiler substitutes an existing
fossil fuel-fired boiler, but natural gas/oil is still used for startup and as auxiliary fuel.
The new power plant, commissioned in 2015, is reducing Bulleh Shah’s operating costs
by substituting fuel oil and gas with biomass. The plant contributes to the region’s
economic development, as it uses locally grown biomass residues, available in large
quantities, as fuel. Furthermore, the new biomass-fired plant is reducing the carbon
dioxide emissions.
The integration between the new biomass boiler and the existing power plant has been
thoroughly investigated to find an optimal size of the new boiler together with the
existing steam turbine and the process steam consumption.
Based on the conceptual design, a bankable feasibility study for external financing was
carried out, followed by the overall design, tender specifications, contract negotiations,
and finalizing of the turnkey contract.
APPLIED TECHNOLOGY
The project includes a new biomass boiler, a new flue gas cleaning system, and civil
construction.
The grate-type boiler is equipped with a steam superheater for the turbine, a feed-
water economizer, and an air preheater.
The flue gas from the boiler is cleaned for dust emissions in the baghouse filter, located
prior to the stack.
PLANT PERFORMANCE
The plant capacity is 120 MWth, and the plant generates up to 35 MWe electricity in
addition to process steam for the paper mill.
The capacity of the grate-fired boiler unit is 150 tons of steam per hour, 525oC, 100 bar.
FUEL TYPE AND HANDLING

The plant is designed for a variety of biomass fuels such as wheat straw, corn stover,
cotton stalks, and rice straw and husk.
The power plant includes outdoor fuel storage (bales), shredding facilities (maximum
particle size of 100 millimeters), indoor storage with shredded fuel for automatic
operation during night hours and weekends, and automatic conveying of fuel from
storage to the boiler unit and feeding into the boiler.
Source: COWI.
Limestone might be added to the bed to reduce and remove remaining air is injected through the secondary and tertiary
sulfur and/or chlorine. Coarse bed material is withdrawn air ports above the furnace, enhancing staged combustion.
from the bottom of the bed to maintain high sulfur-capture
capacity and to avoid ash contamination that might cause BFB operation range is between the minimum fluidization
bed agglomeration. velocity and the entrainment velocity at which the bed
particles would be dragged by the passing gas. Since the
Primary air is about 30 percent of the combustion air and combustion chamber is protected with refractory load
varies according to the moisture content of the biomass. The changes, cold start capability is relatively slow compared to
the grate technology.

Combustion temperature is normally between 800°C and
Figure 5-9: Bubbling Fluidized Bed Boiler
950°C, with 850°C as a typical bed temperature.
The maintenance cost for BFB boilers is normally considered

to be high as the refractory in the bed and at the boiler walls
requires regular maintenance and the bed technology requires
a relatively high primary air pressure that is costly. Further
bed material (sand) needs to be added continually, and hence
the ash residue amount is high and generates costs.
CIRCULATING FLUIDIZED BED (CFB)
CFB boilers are normally used in larger applications. A

CFB configuration includes solid separators that isolate the
entrained particles from the flue gas stream and recycle them Source: Foster Wheeler, 2016.
to the lower furnace. The collected particles are returned to

5.3.3 BOILER TECHNOLOGIES
the furnace via the loop seal.
WATER AND STEAM BOILER PLANTS
Fluidizing velocity is higher than in a BFB and can be
This section describes how the boiler converts the energy in
between 4.5 and 6.7 meters per second. The entrainment
the hot flue gas from the combustion into steam/heat. The
velocity is the point that defines the transition from a
section introduces the thermodynamical concept of a steam
BFB to a CFB. The CFB operation range is fixed over that
cycle and presents the main boiler types.
entrainment velocity. Beyond this velocity, the bed material
becomes entrained and the solids are distributed throughout WATER AND STEAM BOILER
the furnace with a gradually decreasing density from the
The purpose of a steam generator or boiler is to generate
bottom to the top of the furnace. A distinction between
steam at a desired rate, temperature, and pressure by
the bed and the freeboard area is no longer possible. A
transferring heat from the combustion of fuel into water,
large fraction of the particles rises up from the bed and is
which is then evaporated into steam. The steam can be used
recirculated by a cyclone. The circulating bed material is
for different applications, such as power generation, district
used for temperature control in the boiler.
heating, industrial processes, or combinations thereof,
depending on the steam pressure/temperature.
CFB boilers are used in large combined heat and power
(CHP) plants or power plants, with a capacity of hundreds
A boiler can be either a fire-tube boiler, where hot flue
of MWe, but they also are applied in small-scale power
gases flow through tubes surrounded by water in a shell, or
generation, using fuels or fuel mixtures that are less reactive
a water-tube boiler, where the water flows through tubes
and require longer residence time for full conversion.
and the hot flue gases flow over the tubes. In high-pressure
applications, such as power generation, it is an advantage
The maintenance costs for CFB boilers are normally
(in terms of metal stress) to have the high-pressure water/
considered to be high as the refractory in the bed and at the
steam inside relatively small-diameter tubes. Hence, the
boiler walls requires regular maintenance. The operation
water tube configuration is preferred. For small hot water
costs for CFB boilers are likewise considered to be high, as
or process steam boilers, the fire tube boiler is often used.
the bed technology requires a relatively high primary air
pressure that is costly. Further, bed material (sand) needs to
Boilers that use a drum and recirculate water for changing
be added continually and hence the ash residue amount is
into steam are called drum boilers.
high and generates costs.

PROCESS Figure 5–11 shows a schematic of a typical drum boiler
arrangement. The evaporator riser tubes constitute the walls of
The heat transfer from the hot flue gases to the feed water in
the furnace area, mainly absorbing heat by radiation. Finally,
a drum boiler is divided into three sections: an economizer,
the remaining heat from the flue gases is used to preheat the
an evaporator, and superheaters.
combustion air. The flue gases then leave the boiler through the
Feed water pumps pump the feed water into the economizer, flue gas treatment systems to the flue gas stack.
which heats it to saturated water and feeds it into the

WATER-STEAM CYCLE
evaporator. The evaporator consists of a number of down-comer
pipes and riser tubes (membrane wall) in a loop connected to As described in the previous section, a boiler converts the
a header in the bottom of the boiler and a drum in the top of energy from the biomass combustion into high-pressure
the boiler. The saturated water enters the drum, falls through steam. The steam is transformed into electrical power in
the down-comer tubes into the bottom header, and moves a steam turbine, which drives a generator that produces
up through the riser tubes, where it is heated by the hot flue electrical power. After the steam has passed through the
gases and led back into the top of the drum as steam. turbine, it is condensed into water in a condenser and
recycled back to the boiler, where it is heated into steam
In the riser tubes, the saturated water will boil partially and again. The use of a water-steam cycle as described above,
will form bubbles of saturated steam. The saturated steam is including a boiler and a steam turbine, is the most widely
taken from the top of the drum to the primary superheater, spread and commonly used technology to produce electric
while the saturated water repeats the loop (see Figure 5–10). power from a fuel, including biomass.
In the superheaters, the steam is further heated by the hot
flue gases to superheated steam and led to a steam turbine The water-steam cycle also is termed a Rankine Cycle, and
where it is expanded, delivering work to generate power. Figure 5–12 shows this in its most basic form.
Steps 1–2: The heat released from combustion of the fuel is

Figure 5-10: Evaporator Circulation System, P.K. Nag, used to evaporate water to steam in the boiler. The steam is
Power Plant Engineering superheated to a temperature above the boiling point.
To superheater
Figure 5-11: Typical Water Tube Boiler Arrangement,
P.K. Nag, Power Plant Engineering
Saturated From economizer

steam
Saturated
water Heat
Drum
Down-
Riser tube
comer
Heat
Header Heat
Source: COWI. Source: COWI.

Figure 5-12: Water-Steam Cycle
1 2
BOILER
Heat input
TURBINE Power
PUMP
CONDENSER
4 3
Heat output
Source: COWI.
Steps 2–3: The steam flows through the turbine, expanding where it is again pumped to the boiler for steam production.
along the way, and thus transfers mechanical energy to the The pump used for this purpose is termed the feed water
rotating turbine shaft. The turbine shaft drives a generator, pump and is usually a multi-stage pump suitable for
which produces the electrical power. Figure 5–13 shows an handling large pressure heads.
example of a steam turbine.
ELECTRICAL EFFICIENCY
Steps 3–4: When the steam exits the turbine, it is left with an The electrical efficiency of the cycle is highly dependent on
amount of residual heat that cannot be used for electricity the steam temperature and the condensing temperature. The
production in the turbine. This heat has to be removed, and efficiency will increase with higher steam temperature and
the steam is condensed in order to be recirculated into the lower condensing temperature. Higher steam temperatures
boiler. This happens in a heat-exchanging condenser that require the use of more expensive steel alloys in the boiler
transfers the residual heat to cooling water, either from a and steam pipes.
natural source such as river or sea water or to air coolers.
COMBINED HEAT AND POWER (CHP) PLANT
Steps 4–1: The condensed steam (water) is then pumped
For a combined heat and power (CHP) plant, where heat in
from the condenser to a reservoir or feed water tank, from
the form of steam or hot water can be used, it is most often
the heat output from the condenser that is used. The amount
Figure 5-13: Illustration of a Steam Turbine
of heat that can be recovered from the condenser is normally
about 40 to 60 percent of the energy from the fuel. Often,
the heat is in the form of water at a temperature between
70°C and 100°C or low-pressure process steam. Higher
temperatures can be obtained; however, this will have a
negative effect on the electrical power production.
HEAT-ONLY BOILER
There are many cases where there is a need for heat (steam
or hot water) without a demand for power production.
Source: COWI, 2016. For plants up to around 30 to 40 MWth, a large number

Case Story: Biomass Project for the Furniture Production and Palm Oil Industries in Malaysia
PROJECT DESCRIPTION
Bentong Biomass Plant is a privately owned energy plant located in Pahang, Malaysia, a
region where many industries using natural resources are gathered.
The plant is fired with waste products from nearby industries, thereby making use of
waste products for energy production. Two types of fuel are used: wood chips and
empty fruit bunches. The wood chips are left over from furniture production that takes
place at a nearby plant. The empty fruit bunches are residues from palm oil production,
after the palm oil has been extracted.
Both waste products are pretreated upon arrival at the Bentong plant. Both fuel types
are shredded to obtain a homogenous size, which enables smoother operation of the
plant and the combustion process.
Bentong Biomass Plant produces steam, which is sold to a nearby paper factory 24
hours a day, 7 days a week. A multiyear agreement between Bentong Biomass Plant and
the paper factory has secured the biomass plant a guaranteed price for steam, while
securing the paper factory a guaranteed rate of supplied steam.
The plant is shut down for maintenance one to three times per year for one to three
weeks at a time. However, in some years, no maintenance has been required at all. The
plant was commissioned in 2007 and is staffed by three shifts of six operators each.
The plant was built by a Malaysian contractor specializing in biomass plants and using
combustion technology from a Danish boiler supplier.
APPLIED TECHNOLOGY
Boiler capacity and parameters:
• 32 tons of steam flow per hour
• 29 bar / 218°C
Typical costs for biomass plants fired by empty fruit bunches:
Fuel cost: 72–80 Malaysian ringgit per ton of fuel
•
(including transportation, pretreatment)
• Operation and maintenance cost: 240 Malaysian ringgit per MWh.
PLANT PERFORMANCE
The project includes the entire plant as well as pretreatment for waste. The drum-type
steam boiler, fired from the grate, is equipped with steam superheaters.
The vibrating grate is designed as water-cooled membrane wall panels and is connected
to the boiler by means of flexible pipes. The vibrating movement of the grate is provided
by two vibration drives, and the intervals for vibration can be set according to fuel quality.
IMPORTANT LESSONS LEARNED

The plant was originally designed with air spout fuel feeding. Due to variations in fuel
quality, however, the feeding system was subsequently changed to screw feeding, a
more robust feeding system.
Source: Babcock & Wilcox Vølund A/S, www.volund.dk.
of suppliers offer standardized boilers that can operate in delivering tailor-made biomass boiler plants that can
on the most common types of biomass. Larger plants, or meet special requirements for a certain flow, pressure, or
plants with special requirements (e.g., in relation to steam temperature for the process heat.
parameters) will need a tailor-made boiler to be designed
for the actual case. Many boiler suppliers are specialized

RETROFIT OF EXISTING FOSSIL FUEL BOILERS ash removal. A BFB-type boiler may be able to handle fuels
with moisture content up to 50 to 60 percent. However, an
In some cases, it can be interesting to investigate the
increase in flue gas flow may reduce the boiler capacity or
possibilities for a complete or partial conversion of fossil
require changes of the flue gas path and the fans.
fuel-fired boilers to burn biomass fuels.
The technical considerations for a conversion project will

Both the technical options and the economic viability of such
also include:
projects will be very specific for the individual case. There
are a number of examples of conversion projects for various
• New installations for fuel handling and storage
boiler types, including:
• New installations or modifications of filters
• Coal-fired grate boilers converted to biomass grate for particle removal
• Coal-fired pulverized fuel boilers converted to biomass BFB. • New installations or modification of ash handling.
• Natural gas/ liquefied petroleum gas (LPG)/ light oil-fired Boilers designed for natural gas, LPG, or light fuel oil may
boilers converted to biogas. be converted to use biogas from a nearby new biogas plant.
Such conversions will require change of burners and possibly
A number of projects are under development, mainly in
combustion air systems. All the biomass fuels mentioned
Europe and the United States, for the conversion of large
have relatively low contents of sulfur and ash, so the flue gas
utility-size, coal-fired power stations up to 600 to 800 MWe,
path often will require no or only small changes.
mainly by substituting coal with wood pellets.
5.3.4 ORC TECHNOLOGY
These projects demonstrate that technical solutions can be
PRINCIPLE OF ORC
found, but they are outside the scope of this guide.
The Organic Rankine Cycle (ORC) is, as the name implies,
Many small to midsize coal-fired utility and industrial a technology based on the Rankine Cycle, which is the basic
boilers, up to about 200 MWth, exist around the world. The thermodynamic cycle also used in the conventional water-
majority of these boilers are either grate-fired boilers (the steam cycle, as shown in Figure 5–14. The working fluid in
smaller sizes) or pulverized fuel-fired boilers (the larger). ORC is an organic, high-molecular-mass fluid. This fluid has
Converting such plants from coal to biomass fuels can use a liquid-vapor phase change (or boiling point) occurring at
locally available fuels and reduce greenhouse-gas emissions. a lower temperature than for water-steam. ORC can be used
A conversion also may be a way to reduce sulfur emissions to convert thermal energy from a relatively low-temperature
as an alternative to installing a desulfurization system. heat source to electricity. Typical heat sources are industrial
waste heat, geothermal heat, and heat from a relatively
Converting a relatively small grate-fired boiler from coal to
simple biomass combustion system.
biomass will require modifications to the stoker system in
order to handle the larger volume of fuel. Preferably, the new Typically, the temperature of the heat input to an ORC cycle
biomass fuel should have a relatively low moisture content, is up to 300°C to 350°C, compared to the 500°C to 600°C
thus avoiding a capacity reduction due to larger flue gas steam temperature often applied in water-steam cycles.
flow. In addition, the fuel should not be of a high alkaline The efficiency of the heat to electricity conversion depends
type (such as straw) due to risks of fouling and corrosion of thermodynamically on the heat source temperature. ORC
heating surfaces. therefore will have a theoretically lower efficiency than a
water-steam cycle operating at higher temperatures.
For a typical pulverized fuel-fired boiler (up to 200 MWth),
an option may be to replace the original boiler bottom with Because design temperatures and pressures applied in an ORC
a new BFB-type bottom, including air nozzles and bottom unit are lower than in a typical water-steam plant, the costs

Figure 5-14: Principle of a Typical Organic Rankine Cycle
l
Oi
al The plant uses the hot-temperature
m
er
Th 3 Turbine thermal oil to preheat and vaporize a
4 suitable organic working fluid in the
Electric power evaporator (8→3→4). The thermal oil is
cooled in the evaporator and returned to
Temperature
5 the boiler or other heat source for

8 Generator
reheating. The organic fluid vapor powers
4 5
the turbine (4→5), which is directly
coupled to the electric generator through
Thermal Oil 3
an elastic coupling. The exhaust vapor
8 flows through the regenerator (5→9)
9 Evaporator Regenerator
where it heats the organic liquid (2→8).
2
6 The vapor is condensed in the condenser
9
r (cooled by the cooling water flow)
Wate Water (9→6→1). The organic fluid liquid is finally
6
Entropy pumped (1→2) to the regenerator and
then to the evaporator, thus completing
2 1
Condenser the sequence of operations in the
closed-loop circuit.
Pump
Sources: COWI; Turboden, 2016.
of components can be reduced by using less costly materials, by the operating staff, and therefore may reduce the direct
smaller wall thicknesses, and comparatively simple designs. O&M costs.
This will improve the economic feasibility for smaller plants The basic ORC thermodynamic cycle and the coupling of
compared to water-steam plants. Generally, the lower the main components are illustrated in Figure 5–15. The
temperatures and pressures in an ORC plant also simplifies core ORC unit must be connected to the high-temperature
operation and maintenance and reduces the skills needed heat source, the low-temperature heat sink, and the
Figure 5-15: Principle of Connections to an ORC Unit
Electric power output
District heating
Drying
Low temperature*
Biomass-powered boiler thermal oil loop
Refrigeration
(pruning of
branches,
marcs, husk, High temperature*
wood chips, thermal oil loop
saw dust, bark Heat sink
Source: Turboden, 2016.

* Turboden ORC units can be also fed with saturated vapor or superheated water.

electrical grid. Figure 5–15 illustrates the principle of ORC plants can also be configured as combined heat and
these connections. power plants, where the energy not converted to electric
power is used for district heating or as industrial process
A closed-circuit thermal oil heat transfer system is often used heat. A CHP plant will have a lower electrical efficiency
to transfer the driving heat from the combustion unit (for than a power-only plant, because the temperatures needed
example, a biomass combusting boiler or waste heat source) for heat application generally will be higher than the
to the ORC unit. These systems use a special oil-based temperatures in cooling circuits. The combined efficiency
thermal fluid as the heat carrier. The main advantage of these (electricity plus heat) will, however, be much higher for a
systems is that they can be designed and operated at much CHP plant than for a power-only plant. Overall efficiencies
lower pressures than needed for a water-steam based system. can be more than 90 percent if all low-temperature heat
However, extreme care is needed in the design and operation from the ORC unit can be made useful.
of thermal oil systems, as the fluids normally are combustible
and leaks may cause a fire. Although CHP projects have a higher CAPEX, CHP projects
usually have a stronger and more robust economy due to
The energy converted to electricity via the turbo-generator income streams from sale of both power and heat.
must be transferred to the electrical grid or to an industrial
consumer, as for any other electricity-generating plant. ORC PLANT CONFIGURATIONS AND LAYOUT
ORC plants are available in unit sizes from a few hundred

The energy not converted to electricity must be transferred
kWe up to 10–15 MWe. For smaller plants, the core ORC
from the ORC condenser to a low-temperature heat sink.
unit is typically a factory-assembled unit, simplifying the
For a plant designed for the sole production of electric
on-site installation and commissioning. Larger plants are
power, the heat is transferred to a cooling water system or
typically partly factory-assembled and transported to the
to a dry or wet cooling tower. The electrical efficiency of an
construction site in modules, requiring final connection and
ORC plant will depend on the temperature of the cooling
testing on-site. Figures 5–17 and 5–18 show examples of the
system, as illustrated in Figure 5–16.
layout of ORC units.
Figure 5-16: Illustration of Electrical Efficiency as a Function of Cooling Water Temperature
26% GROSS PERFORMANCE OF THE

Design Point TURBODEN HRS MODULES AT
24% VARIOUS CONDENSATION
Gross electric efficiency
WATER TEMPERATURES
22% Value of gross electrical
efficiency calculated as
20% the ratio of electric power
output at generator terminals
18% to the thermalpower input
to the ORC at the
design point
16%
14%
15 20 25 30 35 40 45 50 55 60 65
Water outlet temperature from condenser (oC)

Figure 5-17: Layout of a 1 MWe ORC Unit Figure 5-18: MWe Biomass-driven ORC Unit
Source: Turboden, 2016. Source: Turboden, 2016.
A biomass-to-energy ORC plant includes a number of • Internal electricity supply and control system
sections and systems, for example:
• Electrical grid connection
• The core ORC unit • Civil works and buildings.
• Biomass fuel reception, storage, and handling The core ORC module may represent only 20 to 30 percent
of the total investment cost (CAPEX) for a complete biomass
• Biomass boiler with flue gas cleaning and ash handling
plant. During project development, it is very important to
• Thermal oil heat transfer system focus on all necessary parts of the complete plant.
• Cooling water system and/or low-temperature heat

recovery system
Figure 5-19: Illustration of the Layout of a Biomass ORC Plant Including Biomass Boiler, Fuel Silo,
and Some Auxiliary Systems
Source: Exergy, 2016.

5.3.5 EMISSIONS AND FLUE GAS CLEANING Figure 5-20: A 1 MWe Biomass ORC Plant in Italy
This section describes the different measures available
for reducing emissions from the combustion of biomass.
The emissions can be reduced by either primary measures
(combustion process integrated measures) or secondary
measures (post-combustion cleaning).
PRIMARY MEASURES
The primary measures improve the combustion process

and minimize the production of pollutants. A combustion
temperature above 850°C for at least 1.5 seconds secures a
complete combustion; lower temperatures or lower residence
time increase the emissions of complex hydrocarbons (tars),
carbon monoxide, etc.

If the combustion air is preheated and the moisture content
in the fuel is less than 50 to 60 percent, an adequate Measures to enhance the combustion process are
combustion temperature can normally be reached. summarized below:
Emission of nitrogen oxides is due either to the nitrogen • Fuel quality: uniform size and (low) moisture content
content in the fuel or to the formation of thermal nitrogen
• Staged combustion: to reduce fuel nitrogen oxide formation
oxide (that is, oxidation of atmospheric nitrogen gas).
Oxidation of nitrogen gas is only a problem at combustion • Combustion temperature >850°C; >1.5 seconds to secure
temperatures above 1,400°C, and it therefore presents little complete burnout
problem in biomass-fired boilers, where the combustion
• Adequate control system: to adapt to changes in load and
temperatures range from about 900°C to about 1,200°C.
fuel quality.
The nitrogen content in biomass covers a wide range from SECONDARY MEASURES
12 percent in hardwood to 2 percent or more in some
Secondary measures are flue gas treatment systems placed
agricultural waste products, which potentially can lead to
between the combustion zone and the stack to remove
very high nitrogen oxide emissions. These emissions can be
unwanted pollutants. Depending on the boiler and the
reduced by staged combustion, where the initial combustion
biomass fuel, nitrogen oxides, carbon monoxide, hydrogen
is sub-stoichiometric, whereby the fuel nitrogen is converted
chloride, sulfur dioxide, volatile organic compounds, and
to nitrogen gas. Excess secondary air is subsequently
particulates could pose a problem.
added to secure complete burnout of carbon monoxide,
hydrocarbons, etc.
For biomass-fired boilers, dust or particulate removal is the most
frequent and important process. Systems for dust removal are:
Inappropriate boiler operation may cause large emissions,
so the plant should preferably be equipped with a control
• Multicyclones
system that automatically adjusts the air/fuel ratio, both at
steady operation and during load changes. • (Venturi) scrubbers
• Electrostatic precipitators
Uniform size and moisture content of the biomass fuel parts
also will improve the combustion process. • Baghouse filters.

MULTICYCLONE SCRUBBERS
A multicyclone is a battery consisting of 8 to 16 or more single Several types of wet scrubbers can be used for particulate
cyclones (see Figure 5–21). In cyclones, particles are separated removal. Among the most efficient are the venturi scrubbers
by centrifugal forces. Multicyclones are simple and can resist (see Figure 5–22). A venturi scrubber consists of three
high temperatures, but they are less efficient for small particles. sections: a converging section, a throat section, and a
They are often used for upstream pretreatment. diverging section. The inlet gas stream enters the converging
section, and, as the area decreases, the gas velocity increases.
Case Story: Biomass Project for the Wood Processing Industry in Turkey
PROJECT DESCRIPTION
Kastamonu Entegre is a large integrated company specialized in the production of
wood-based panels (particle board and MDF). In its facility in Gebze (in northwestern
Turkey), the company burns wood residues from its own production in order to use the
heat, mainly for thermal-oil presses and dryers.
Because the company had a surplus of both biomass and thermal capacity in the
existing boilers, it decided to install an ORC unit in order to produce electricity. The
plant startup occurred in 2014.
APPLIED TECHNOLOGY
The company decided to install a Turboden 10-CHP unit, which produces both
electricity and hot water at 90°C.
The input of the unit is hot oil at about 300°C (about 5.5 MWh thermal). The oil circuit
was already present in the facility (used mainly for the presses), so the company
installed a three-way valve to redirect part of the flow to ORC heat exchangers.
PLANT PERFORMANCE
Outputs of the ORC unit:
• Electricity totaling 955 kWh electrical at nominal conditions.
• Thermal power totaling about 4.5 MWh thermal in the form of hot water
at 90°C. The hot water is integrated in the production system and used to
heat the buildings and dryers.
OUTCOME OF THE PROJECT

The ORC project at the MDF board producer in Gebze, Turkey, is an interesting
example of the realization of opportunities for integrating ORC technology with the
particle board and MDF manufacturing industry. Low-price biomass fuel is available,
combined with a need for both thermal energy and electrical power for the production
processes.
Thermal energy is used in the process for:
• Low-pressure steam for fiber preparation
• Hot gases for hot fiber drying in direct contact dryers
• Thermal oil for hot process and other heat consumers.
Electrical power is used for:
• Hammer mill
• Sawmill
• Hot compression of the presses
• Auxiliaries.

Figure 5-21: Illustration of a Multicyclone Figure 5-22: Illustration of a Venturi Scrubber
Source: Cburnett, Wikipedia, 2016. Source: Wikipedia, 2016.
Liquid is introduced either at the throat or at the entrance to the gas stream. This is usually accomplished by knocking
the converging section. them loose from the plates, allowing the collected layer of
particles to slide down into a hopper from which they are
The inlet gas, forced to move at very high velocities in the evacuated. Some ESPs remove the particles by intermittent or
small throat section, shears the liquid from the scrubber continuous washing with water.
walls, producing an enormous number of very tiny droplets.
The efficiency of an ESP depends primarily on particle size
Particle and gas removal occur in the diverging section as the distribution and resistivity of the dust particles.
inlet gas stream mixes with the fog of tiny liquid droplets.
The inlet stream then exits through the diverging section, The electrical force to move the particles out of the gas
where it is forced to slow down. stream depends on the number of electric charges per mass
ELECTROSTATIC PRECIPITATORS
Figure 5-23: Detail of an Electrostatic Precipitator
An electrostatic precipitator (ESP) (see Figure 5–23) is a
particle control device that uses electrical forces to move the
particles out of the flue gas stream and onto collector plates.
In the ESP, the particles are given an electrical charge by

forcing them to pass through a corona, a region in which
gaseous ions flow. The electrical field that forces the charged
particles to the walls comes from electrodes maintained at
high voltage in the center of the flow lane.
Once the particles are collected on the plates, they must be

removed from the plates without re-entraining them into Source: Egmason, Wikipedia, 2016.

unit. For small particles (<1 micron), removal efficiency
Figure 5-24: Baghouse Filter
is rather poor as the available space (on each particle) for
electron charges is limited. An ESP is therefore mediocre for
aerosol particles, although better than a multicyclone.
The resistivity of the dust particles should be neither too

low nor too high. If the resistivity is too low, the particles
lose their charges when they hit the collecting plate and will
re-entrain back into the gas stream. If the resistivity is too
high, the particles will not be charged at all and therefore
will not be affected by the electric field.
BAGHOUSE FILTERS
A baghouse filter (see Figure 5–24) contains bags of textiles

or membrane-coated textiles through which the flue gas
passes and leaves a layer of dust to accumulate on the filter
media surface. When sufficient pressure drop is reached, the
cleaning process begins.
Source: emis.vito.be.
Cleaning can take place while the bag house is online

of the superheaters and on a sufficient temperature window, it
(filtering) or is offline (in isolation). When the compartment
is realistic to achieve a 30 to 50 percent reduction in nitrogen
is clean, normal filtering resumes.
oxides. The superheaters often are located in the desired
temperature window, and this will spoil the option of using
The cleaning cycle can be either mechanical shaking, reverse
non-selective catalytic reduction.
air, or jet pulses of compressed air. In all cases, the collected
dust cake will crack and fall into the hopper below, from
The selective catalytic reduction process takes place at a
which it is evacuated.
catalyst surface at 320°C to 380°C, a temperature range
often reached just before the economizer, but the potassium
Baghouse filters are very efficient at removing all particle sizes,
content in biomass poses a serious risk for fast degradation
and operation is reliable when the flue gas is dry and the particles
of the selective catalytic reduction catalyst.
are non-sticking. However, the baghouse filter is sensitive to
the risk of fire caused by sparks in the flue gas stream.
Secondary measures for nitrogen oxide removal are CAPEX
EMISSION OF GASEOUS SUBSTANCES and OPEX intensive and should be implemented only if
deemed necessary by legislation and by the Environmental
Most emissions (carbon dioxide, nitrogen oxides, tars,
and Social Impact Assessment outcomes / consideration of
volatile organic compounds, etc.) are best handled by
potential sensitive receptors / degraded airshed.
primary measures; however, in some cases, nitrogen oxides
need to be reduced by secondary measures. 5.3.6 RESIDUES AND THEIR HANDLING
All extraction of biomass from the forests and fields removes

In principle, both selective and non-selective catalytic
nutrients and acid-buffering capacity from the soil.
reduction systems based on ammonia can be used. The
non-selective process takes place in the boiler at temperatures
During combustion of biomass fuel, nutrients and acid-
between 850°C and 950°C. Due to the high temperature,
buffering substances are concentrated in the ash. This makes
most of the ammonia ends up as nitrogen gas, and therefore a
the ash suitable as a compensatory fertilizer to replace the
high excess of ammonia is needed. Depending on the location

lost nutrients and acid-buffering capacity in forest soil. Only for example, cadmium, lead, or zinc. Ash analysis therefore
nitrogen is missing, as it is eliminated with the flue gases. should be carried out to ensure that ash recycling complies
with local regulations.
The amount of ash depends on the biomass type and the
amount of residual soil attached to the fuel. Hardwood In addition to its probable heavy metal content, biomass
logs produce the lowest amount of ash, whereas byproducts ash has a very high pH. The option to recycle ash therefore
from annual crops (such as straw and corn stover) collected should be dependent on the sustainable conditioning of the
directly from the fields have the highest amount. The typical soil. Ash recycling should not result in an uncontrolled pH
amounts are between 1 percent and 4 percent of the dry fuel. shock, hence the biomass ash could be stored (for example,
for a season) to allow atmospheric carbon dioxide to react
THE WASTE HIERARCHY
and neutralize the ash.
Ash from biomass combustion should be treated according
to the waste hierarchy (see Figure 5–25). In relation to ash, If recycling of ash is impractical for either environmental
there are three relevant options: reduce, recycle, or landfill. or economic reasons, the ash may be disposed of at an
approved landfill.
Ash production can be reduced to some extent by using
clean logs for wood chip production, etc., and by storing The macro constituents (the valuable ones are primarily
the biomass fuel on paved ground. However, a limited manganese, magnesium, potassium, phosphorus, and sulfur)
production of biomass ash is unavoidable; the primary goal in a number of biomass ashes are summarized in Table 5–4.
therefore will be to recycle the ash to prevent depletion of
Ash collected from a biomass plant should preferably be
minerals in the fields and forests.
separated into bottom ash from the boiler and fly ash from
The biomass ash preferably should be returned to the same the filter. This will enable the owner to apply for recycling of
type of field/forest that the fuel came from, and approximately the bottom ash, whereas the fly ash with most of the heavy
in the same amount. A rule of thumb is to limit the amount of metals of the fuel may be landfilled. If permitted by the local
ash to less than 3 tons per hectare. authorities, the fly ash also may be recycled, resulting in a
much lower cost.
In addition to the macro constituents, biomass ash—especially
5.3.7 COOLING PRINCIPLES
from annual crops—could contain high concentrations of,
There are four methods for cooling the residual heat in
Figure 5-25: The Waste Hierarchy the condensed steam from the turbine condenser. These
cooling principles should be regarded as an alternative or
supplement to recovering the residual heat for industrial use.
The four methods are:
Reduce
• Natural convection cooling towers

Reuse
• Dry coolers
Sustainability Recycle
• Wet/dry coolers
Recovery
• Wet coolers.
Landfill NATURAL CONVECTION COOLING TOWERS
Natural convection cooling towers are a type of cooling

tower that is well known from nuclear power stations, where
Source: COWI. cooling water flows over grates (or similar), and heat is

Table 5-4: Ash Analysis of Different Types of Biomass
Magnesium
Phosphorus
Manganese
Aluminum
Potassium
Iron Oxide
Pentoxide
Titanium
Chlorine
Calcium
Trioxide
Sodium
Dioxide
Dioxide
Silicon
Sulfur
Oxide
Oxide
Oxide
Oxide
Oxide
Fuel
Wood pellets No data 4.30 1.30 1.50 5.90 8.50 55.90 0.60 16.80 0.10 3.90 1.03
Sunflower pellets No data 2.90 0.60 0.80 0.10 21.60 21.60 0.24 22.80 0.10 15.20 14.00
Walnut shell 0.1 23.10 2.40 1.50 No data 13.40 16.60 1.00 31.80 0.10 6.30 2.20
Almond shell 0.2 23.50 2.70 2.80 No data 5.20 10.50 1.60 48.50 0.10 4.50 0.80
Olive husk 0.2 32.70 8.40 6.30 No data 4.20 14.50 26.20 4.30 0.30 2.50 0.60
Hazelnut shell 0.10 33.70 3.10 3.80 No data 7.90 15.40 1.30 30.40 0.10 3.20 1.10
Red oak wood 0.80 49.00 9.50 8.50 No data 1.10 17.50 0.50 9.50 No data 1.80 2.60
Wheat straw 3.60 48.00 3.50 0.50 No data 1.80 3.70 14.50 20.00 No data 3.50 1.90
Beech bark No data 12.40 0.12 1.10 No data 11.50 68.20 0.90 2.60 0.10 2.30 0.80
Tamarak bark No data 7.77 8.94 3.83 No data 9.04 53.50 3.40 5.64 0.11 5.00 2.77
Switch grass No data 66.25 2.22 1.36 No data 4.71 10.21 0.58 9.64 0.28 3.92 0.83
Rice straw No data 77.20 0.55 0.50 No data 2.71 2.46 1.79 12.59 0.04 0.98 1.18
Olive kernel No data 67.70 20.30 0.05 No data 0.05 0.50 11.20 0.15 0.05 No data No data
Source: Saidur et al., 2011.
transferred to an upward airstream through direct contact. the cooling tower. This steam can, depending on the cooling
Such a cooling tower would, for a 400 MW turbine, have a circuit solution, contain some bacteria and chemicals.
100-meter diameter and a height of 150 meters. A specific
WET/DRY COOLERS
problem for this type of cooling is the accumulation of
unwanted elements such as E. coli bacteria in the cooling Wet/dry coolers are a combination of the wet and dry cooler
water. The natural convection cooling towers are not normally concepts. Primary cooling is done in direct contact with
found in the range of power plants relevant for this guide. the air flow, but afterward the air is heated by hot cooling
water. This allows the air to leave the tower without visible
DRY COOLERS
evidence of steam and thus with less risk of spreading
Dry coolers have no direct contact between the cooling air bacteria and chemicals.
and the water to be cooled. The water transfers its heat to a
conducting wall, where air is flowing on the opposite side. In Examples of forced (not natural) convection cooling towers
theory, no evaporation happens from the condenser cooling are shown in Figures 5–26 and 5–27.
water, and the accumulation of unwanted elements in the
5.3.8 ELECTRICAL SYSTEMS
cooling water is therefore limited. Due to the absence of
water, there is no plume from the cooling process. For a 1–40 MWe biomass fuel unit, the main power
distribution voltage level is typically given by the turbine
WET COOLERS generator terminal voltage, for example 10-kilovolt
Wet coolers, as opposed to dry coolers, have direct contact alternating current (AC).
between the cooling air flow and the condenser cooling

Most consumers, however, are connected to 400-volt AC and
water; however, instead of natural convection, the air flows
230-volt AC power distribution switchboards, and therefore
through the cooler driven by a fan. A certain amount of
several distribution transformers must be used to convert
cooling water will evaporate, and steam can be seen above
from 10-kilovolt AC to 400/230-volt AC. With very large

Figure 5-26: Cooling Tower from a Mexican Sugar Mill
Source: COWI.
Figure 5-27: Industrial Cooling Towers for a Power Plant
Source: Cenk Endustri, Wikipedia, 2016.

consumers, it may be beneficial to add an additional voltage project until handover and commercial operation, where it is
level of 700-volt AC or even to connect them to the main in an “as-built” version.
power distribution.
Figure 5–28 shows a simplified typical electrical single-line
In general, almost all motors in the plant will be supplied diagram for a 35 MWe unit. No consumers are shown
via variable frequency drives because of energy efficiency on the diagram except two large motors supplied by
requirements. variable speed drives. Almost all motors in the plant will
be supplied via variable frequency drives because of energy
In addition to the AC power systems, direct current (DC) efficiency requirements.
power systems are required for critical and uninterruptable
services. The DC power systems are, during normal 5.3.9 DCS
operation, supplied by the AC systems via rectifiers. When Distributed control system (DCS) automation for a 1–40
a failure occurs in the AC systems, the DC systems are MWe biomass fuel unit typically consists of a control system
powered by batteries. Typical consumers are digital control for fuel handling, a control system for the steam turbine
systems, protection and shutdown systems, fire detection, and generator, a control system for the boiler, and control
emergency lights, etc. Critical pumps and fans also can be systems for auxiliary systems such as cooling water, ash
supplied by the DC systems during a power failure, but the removal, etc. It is preferred that most, and if possible all, of
power demand must be relatively small. the control systems mentioned are in a common DCS.
The electrical main distribution single-line diagram is a key Supervision and operation is made from a common control
element when describing and visualizing the concepts and room with human machine interface for all control systems,
the design of the electrical systems. Therefore, a preliminary and preferable mainly from a common DCS.
single-line diagram should be constructed at the earliest
possible stage of the project. The single-line diagram is then Hardware (input-output modules, CPU units, interface
maintained and developed continuously throughout the modules, switches, relays, power supply, etc.) must be built
Figure 5-28: Simplified Typical Electrical Single-line Diagram for a 35 MWe Unit
Source: COWI.

into cubicles or cabinets with sufficient and suitable cooling kilovolts. In some cases, in the upper power range, it may
and placed in rooms with sufficient cooling. Cooling of even be beneficial or required to connect the unit to the
rooms for electrical and DCS equipment must protect against power transmission systems, which are voltage levels above
dust and moisture condensation by a small overpressure. 100 kilovolts.
Moisture condensation must be moved away safely to avoid
contact with electronic and electric equipment. At an early stage of the project, it is necessary to obtain close
contact and dialogue with the local grid company. Knowing
Dependent on local regulation, a 1–40 MWe biomass fuel the maximum electrical power output, the grid company
unit may require monitoring of the flue gas and its content of will be able to locate a point of connection in the existing
nitrogen oxides, dust, and maybe other contents. networks or to advise if new networks are required to
absorb the power production.
In addition to a DCS system and other control systems,
DCS automation for a 1–40 MWe biomass plant includes The grid company’s grid connection requirements should be
instrumentation, control valves, dampers, motors, and other analyzed closely, as they often impose design requirements
electrical equipment. All are electrically connected to the for the steam turbine, the boiler, and the protection and
DCS and the motor control center. Equipment and cables are control systems. The design of auxiliary systems for the
exposed to different environments and must be able to resist turbine generator, for example the excitation system and the
negative impacts such as ultraviolet radiation, rodents that relay protection systems, also often are influenced by the
eat cables, heavy rainfall during monsoon periods, etc. requirements given by the grid company.
If the plant location is far from the airport or other traffic, Finally, the requirements from the grid company regarding
a remote connection for the supplier to access the DCS and grid code compliance documentation and testing should not be
other major control systems is necessary. A remote connection underestimated. Generally, a grid connection permit is obtained
enables the DCS supplier to access the DCS system, to assist by proving compliance by both calculations and simulations
during maintenance, and to prepare any major overhaul of the supported by capability testing during commissioning.
DCS. However, a remote connection makes the plant vulnerable
to attack via the Internet and therefore must include firewalls 5.4 BIOGAS PLANT
and other measures to protect against Internet attack. 5.4.1 BIOMASS AS FEEDSTOCK FOR BIOGAS PLANTS
The fuel handling area might be categorized as an ATEX A biogas plant is based on biological processes, and it
area. Therefore, cable trays and other electrical installations therefore is necessary that the organic feedstock be more or
must be designed to avoid the collection of biomass dust and less ready for biological degradation by bacteria.
becoming a source for explosions and fire. Additionally, fire

Several kinds of organic material may be used in a biogas plant:
detection in the fuel handling area is necessary. Protection
systems and interlocks must be made such that they cannot
• Manure from animals
easily be overruled.
• Leftover organic material from food-producing industries
5.3.10 GRID CONNECTION
• Sludge from flotation plants and other types of sludge
The turbine generators used for 1–40 MWe biomass fuel
• Vegetables and fruit from agriculture
units are typically designed for a terminal voltage of around
10 kilovolts. In the lower power range, it may be possible to • Plant material from different types of production, such as
make a connection directly to the local power distribution the potato and seed handling industries, etc.
networks. In the upper power range, there typically will be
a need for a dedicated unit step-up transformer connecting Manure from animals: Manure from cows, pigs, chickens,
the unit to the power distribution networks of 20 to 100 and other animals is suitable biomass for production of

biogas in a digester. However, because this biomass has Other types of biomass also may be used in a biogas plant,
already passed through the animals’ digestive systems, the but these products most likely will fall into one of the five
biogas potential is not very high. Normally, this biomass groups described above.
does not need any pretreatment before being pumped into
the biogas plant. For efficient operation, different biomass types should be
mixed before being pumped into the biogas plant.
Leftover organic material from food producing industries:
GAS POTENTIAL FROM DIFFERENT BIOMASS TYPES
Biomass from food producing industries such as dairies,
slaughterhouses, fishing industries, and the starch producing The biogas potential is not the same from all biomass types.
industry is considered very good for the production of In general, animal manure has the lowest gas potential, and
biogas. It is rich in sugars, proteins, and fat, and the biogas agricultural crops have the highest biogas potential, since
potential is high. Normally, this biomass does not need any these products are very rich in starch (see Appendix B).
pretreatment before being pumped into the biogas plant.
5.4.2 PROCESS FLOW OF A BIOGAS PLANT
Sludge from flotation plants and other types of sludge: Biogas is a product from an anaerobic (no oxygen) biological
Sludge from flotation plants is considered a very good process in a biogas plant. Several groups of bacteria produce
biomass for biogas production. Flotation plants are normally biogas from organic biomass. The biogas plant should provide
used at slaughterhouses, and the sludge is rich in fat and the bacteria with optimal conditions, meaning an anaerobic
proteins, which gives it a very high biogas potential. This atmosphere and a temperature of around 37°C or 55°C,
biomass does not need any pretreatment before being depending on the process chosen. These conditions exist in the
pumped into the biogas plant. biogas reactor, which is the heart of the biogas plant.
Vegetables and fruit from agriculture: Products from Mesophilic operation requires a digester temperature
agriculture may be used for biogas production but should be of 37°C, while thermophilic operation takes place at a
limited to residues that cannot be used as food for humans temperature of 55°C.
and animals. The products normally are corn, sugar beets,
grain, fruit, etc. This biomass needs pretreatment before The biomass is usually delivered to the biogas plant in
being pumped into the biogas plant. It is necessary to cut trucks. The biomass is collected in storage tanks, where
these products into pieces and to grind them into a pulp, or,
in the case of corn, to make compost that can be stored until Figure 5-29: Biogas Plant with Integrated Gas Holding
it should be used. The pretreated products are pumped into Tank Under a Soft Top
the biogas plant.
Plant material from different types of production: Plant

material may be grass, straw from grain, and fibers from
sugar cane, palm, and other plants. This biomass needs
pretreatment before it can be used in a biogas plant. It will
be sufficient to grind the grass into a pulp. Because straw
and fibers contain cellulose, which is difficult for the bacteria
to use, this material must first be cut into small pieces and
then heated or mechanically treated in a mill, extruder, or
similar. This will open the cellulose to the bacteria in the
digester. This type of biomass is difficult and demanding to
handle before biogas production can begin.
Source: Okologi, 2016.

Figure 5-30: Biogas Production Based on Pig Manure and Slaughterhouse Residues Using a Lagoon Digester
Source: COWI.
different biomass types are mixed into a homogeneous mass. sludge, and to reduce the formation of floating substances on
A mixer is installed in the storage tank, which is normally top of the sludge.
constructed from concrete.
Biogas is collected from the top of the biogas reactor. It is
The unloading area should be indoors, since several biomass accumulated in a gas tank from where the gas is burned in
types will produce odors. Ventilation and cleaning of the air a CHP unit. The CHP unit produces electricity and heat. In
may be necessary. case of failures or during maintenance of the CHP unit, the
biogas is flared for safety reasons.
From the storage tank, the biomass is pumped to the biogas
reactor. The feeding of the reactor should be as stable and Safety valves are installed on top of the biogas tank to avoid
continuous as possible. It is common to feed the digester damage to the tank if the gas pressure is too high or if a
with 1/24th of the daily biomass charge each hour. vacuum is created in the reactor. A heating system is installed
to maintain a constant temperature in the reactor.
The biogas reactor can be a closed tank made from steel or
concrete, or it could be a covered lagoon. However, lagoon The size of the biogas reactor depends on the biomass.
digesters are less effective than biogas reactors built from Most biomass types require a retention time of 20 to 22
steel or concrete. days at mesophilic operation, but for biomass such as straw,
agricultural crops, etc., a retention time of 40 to 50 days is
Very small units may be made from fiberglass. The biogas needed for full gas production. At thermophilic operation,
reactor normally is insulated, since it is important to the retention time can by reduced by some 40 percent due to
maintain a very stable temperature inside the reactor. A faster degradation at the higher temperature.
mixer is installed to ensure efficient mixing of bacteria and
biomass, to ensure that produced gas is liberated from the

The degasified biomass (sludge) is taken out of the biogas A gas engine is connected to a generator that produces
reactor and stored until the sludge is transported to farmland electricity. A general rule is that some 42 percent of the
or other places for use or disposal. energy in the biogas is used to produce electricity. Heat from
the cooling water system can be used at temperatures up to
Figure 5–31 shows a simple flow chart for a biogas plant. around 100° C. Heat from the exhaust gas can potentially be
recovered at temperatures up to around 300° C via a thermal
In some developing countries, a very simple biogas concept is
oil system. Some 47 percent of the energy in the biogas can
used, where the biomass is stored in a big tank covered with a
be used as heat. The remaining part of the energy in the
soft top. There is no mixing and no regulation of temperature.
biogas cannot be recovered and is lost, mainly through the
These digesters produce biogas but are not very efficient.
exhaust gas stack.
USE OF A BIOGAS–CHP UNIT WITH GAS ENGINE
The CHP unit normally is connected to the public grid, and
Biogas normally contains 60 to 65 percent methane gas. The the electricity is sold to the electricity company.
rest is mainly carbon dioxide.
5.4.3 SAFETY AND ENVIRONMENTAL ISSUES
Before the gas can be stored and used, it is cooled to remove SAFETY
water from condensation and is cleaned for, for example,
Since the biogas tank is a closed unit, and since biogas is
sulfur. The biogas normally is used in a CHP unit equipped
produced continuously, gas pressure will always exist in
with a gas-fired internal combustion engine. Heat is
the tank. Due to gas consumption, however, this pressure
recovered from the engine’s cooling water system and from
will normally be low. In case of blockage of the gas pipe,
the exhaust gas.
the pressure will increase. When the pressure gets too high,
Figure 5-31: Process Flow of a Simple Biogas Plant
Source: COWI.

biogas plant, the methane gas is collected and burned in a CHP
Figure 5-32: Gas Engine and Generator Unit
for Biogas Application unit, and methane pollution of the atmosphere will be reduced.
LOCATION OF BIOGAS PLANTS
Biomass is transported to the biogas plant in trucks, and

residues are removed. This traffic should be considered when
planning a new biogas plant.
There may be odor problems during unloading of the

biomass, and it therefore is recommended to locate the
biogas plant away from residential areas.
Source: Jenbacher, 2016.

5.5 EMERGING TECHNOLOGIES
As mentioned at the beginning of this chapter, the focus of

a safety valve will open to reduce the pressure. In case of
this guide is well-known and proven technologies. However,
under-pressure, another safety valve will open to level the
this section describes three emerging technologies that might
pressure and to prevent damage to the tank.
be relevant in the near future, even though they currently are
not proven and available on fully commercial terms. These
The biogas is explosive, and safety during working
technologies are:
operations must be very high. Open fires, smoking, and
mechanical sparks are not accepted near the biogas tank.
• Thermal gasification
As of July 2003, organizations in the European Union must
follow ATEX directives to protect employees from explosion • Torrefaction
risk in areas with an explosive atmosphere. • Pyrolysis/hydrothermal upgrading.
The ATEX directive operates with three zones; zone 0 inside 5.5.1 GASIFICATION
the digester; zone 1 on top of the digester; and zone 2, which
Gasification (see Figure 5–33) is a thermochemical process
is normally a three-meter zone around the digester.
in which biomass is transformed into fuel gas, a mixture of
several combustible gases. Gasification is a highly versatile
There are two ATEX directives: one for the manufacturer
process, because virtually any dry biomass feedstock can be
and one for the user of the equipment. It is highly
converted to fuel gas. If wet biomass is supplied to the plant,
recommended to follow these directives, including for
it requires pretreatment and drying. The heat to drive the
projects outside Europe. According to the ATEX directive,
process comes from partial combustion of the biomass by
the mechanical equipment and electronic devices must be
supplying a limited amount of air.
protected against sparks, and people working in an ATEX
area must follow special safety rules.
The gas generated can, in principle, be used to produce
ENVIRONMENTAL CONSIDERATIONS electricity directly in engines or by using gas turbines at higher
efficiency than via a steam cycle, particularly in small-scale
From an environmental point of view, there are benefits from
plants (<5 MWe to 10 MWe).
using biogas plants. After treatment in a biogas plant, odor
problems from, for example, manure will be reduced, and the At larger scales (>30 MWe), gasification-based systems can
nutrients in the sludge will be more ready for the plants to use. be coupled with a gas turbine with heat recovery and a steam
When sludge is stored for some time, methane gas will form turbine (combined cycle), thus offering improved efficiency.
and will pollute the atmosphere. When manure is treated in a

Figure 5-33: Example of Biomass Gasification Power Plant
Ceramic
Candle
Filter
Clean
Fuel Gas
To Steam
To cleanup
and stack Cycle
Gasifier Ash
Drye Gas
r Air Turbine
Wet Biomass
Dry
Biomass
Boost
Compressor
To Dryers Flue Gas
HRSG
To Stack BFW
HRSG
LP IP HP
Steam
Condensed Cycle
Source: Craig and Mann, 1996.
Combined-cycle technology based on natural gas is proven 30 percent higher energy density than conventional wood
in many plants, but the efficiency and reliability of biomass- pellets. The nickname for the pellets is “black pellets.”
to-gasification still needs to be established. Several projects
based on advanced concepts such as biomass-integrated In addition to the higher energy density, the torrefied
gasification combined cycle (BIGCC) (see Section 5.5.3 and biomass has properties closer to those of coal and can
Figure 5–35) are in the pipeline in northern Europe, the be handled, stored, and processed in existing coal plants
United States, Japan, and India, but it is not yet clear what without any modification. The first large-scale torrefaction
the future holds for large-scale biomass gasification for plants, with capacities of 35 to 60 kilotons per year, have
power generation. been demonstrated, but the economics of the process remain
somewhat uncertain.
Figure 5–33 provides an example of a biomass gasification power
plant from the U.S. National Renewable Energy Laboratory. Potentially higher costs per unit of delivered energy for torrefied
biomass compared to wood pellets could be offset through
5.5.2 TORREFACTION reductions in capital and operating costs in the combustion plant.
In the torrefaction process (see Figure 5–34), biomass
One of the critical research and development issues to
(currently mainly wood) is heated to between 200°C and
address is the feedstock flexibility of the process, since this
300°C in the absence of oxygen and is turned into char.
would greatly enhance the feedstock base and the role of
The torrefaction process is similar to conventional charcoal torrefaction in mobilizing scattered biomass resources such
production, with the important difference that more volatiles as agricultural residues.
remain in the biomass feedstock. The torrefied wood is
typically pelletized and has a higher bulk density and 25 to

Figure 5-34: Wood Chips, at Different Steps Toward “Black Pellets”
STEP 1 STEP 2 STEP 3 STEP 4
Unprocessed wood Dried wood chips Torrefied wood Final wood pellets
chips
Wood chips are Wood chips are dried The wood chips are The torrefied wood
collected and stored, before they undergo heated using micro is milled and made
so they can be used torrefaction process wave technology into pellets that
as biomass within a rotating produce up to 10%
drum reactor, creating to 20% more energy
a charcoallike than untreated ones
substance
Source: IZES, 2016; COWI.
5.5.3 PYROLYSIS/HYDROTHERMAL UPGRADING Figure 5-35: Sketch of a Pyrolysis Process
In this pyrolysis process (see Figure 5–35), biomass is heated

to temperatures between 400°C and 600°C in the absence of Organic Fuel gas
Biomass Biomass Vapour
oxygen. The process produces solid charcoal, liquid pyrolysis Oil
Fast Condensor
oil (also referred to as bio-oil), and a product gas. The exact Pyrolysis T~40oC Pyrolysis Liquid
T~500oC
fraction of each component depends on the temperature and
Sand & Sand
the residence time. char
Pyrolysis oil has about twice the energy density of wood Air Char Flue Gas
pellets, which could make it particularly attractive for long- Combustor
T~550oC
distance transport. So far, however, the technology is in Ash
demonstration phase for this application.
Challenging technical issues include the quality of the Source: COWI.
pyrolysis oil (such as relatively high oxygen content) and its

long-term stability, as well as the economics of its production
and use. Pyrolysis oil could be used in heat and/or power
generation units, or upgraded to transport fuel. Research also
is under way to explore the possibility of mixing pyrolysis oil
with conventional crude oil for use in oil refineries.

Case Story: Biomass Project for Sale to the Grid in Armenia
PROJECT DESCRIPTION
Armenia has few natural resources but has inherited serious ecological problems from
the Soviet era. The country is highly dependent on imports of energy supplies, mainly
from Russia. Five Armenian plants produce electricity: two thermal power plants (using
gas from Russia), a nuclear power plant (using nuclear fuel from Russia), and two
hydropower plants (using local water sources).
Lusakert Pedigree Poultry Plant (LPPP) houses on average 2.5 million animals. The
manure from the poultry is collected and spread into a system of five anaerobic
throughflow stabilization lagoons where the manure settles. Greenhouse gases are
produced from the manure.
LPPP is located in Nor Geghi village, 24 kilometers from Yerevan in the Kotayk Region.
The objective of the Lusakert Biogas Project is to reduce water pollution, secure an
improved and reliable power supply, produce heat, produce fertilizer, and reduce climate-
altering emissions, thereby facilitating future sustainable economic growth in Armenia.
APPLIED TECHNOLOGY
The total investment cost for the Lusakert Biogas Project is around €3 million. Training
of both management and staff was included in the project.
All equipment is installed in containers. The manure is diluted with some 150 cubic meters
of water per day to obtain a dry solid content of 10 to 11 percent before it is pumped to the
digester. The manure is heated in the heat exchanger before it reaches the digester. The
digester is operated mesophilic at 380°C, and the hydraulic retention time is 20 days.
PLANT PERFORMANCE
Some 24,000 kilograms of manure from digested sewage sludge are produced per day, and
the digester is loaded with 250 cubic meters of manure per day. Daily production of 15,000
kilograms of dry solid digested manure is expected. The digested manure is used as fertilizer.
The gas is used to produce electricity and heat. The emission savings are some 26,370
tons of carbon dioxide-equivalent per year, based on the estimated yearly gas production.
The biogas is burned in a CHP unit to produce electricity and heat. The biogas production
is 5,500 normal cubic meters of methane per day. The plant produces some 6.3 MWh of
electricity per year and some 4.8 MWh of heat per year.
OUTCOME OF THE PROJECT

The project is a success, based on the following achievements:
• Significant reduction in the production of greenhouse gases
• Stable green electricity production
• Heat for the digester and to heat the production houses
• Fertilizer for a fruit plantation
• Significant reduction in pollution of the recipient water.
Other beneficiaries of the project include the plant workers and others who benefit from
the improved environmental situation around the lagoons at the plant. Furthermore, the
drinking water below the lagoons will not be affected by pollution from manure leaking
to the groundwater.
IMPORTANT LESSONS LEARNED

• It is important to secure a stable delivery of biomass to the digester.
• It is advised to prepare the project for alternative biomass types.
• Training should be sufficient to ensure optimized operation of the plant.
Source: COWI.

Source: COWI.
66 Plant Design and Permitting

PLANT DESIGN AND PERMITTING
6
6.1 PLANT DESIGN Any biomass residues that are considered for use should
be analyzed for, at a minimum, net heating value, moisture
Designing a biomass plant that produces heat and power
content, ash content, and ash composition.
is a complex process that requires considerable technical
experience and knowledge.
Depending on the type of biomass considered, certain
combustion technologies can be excluded. Very wet fuel may
Any biomass project begins with a demand or a wish —
require special machinery for feeding into the combustion
whether a demand for electricity, for process steam or heat,
chamber and also may require pretreatment to save costs
or simply for the disposal of available biomass residues from
on firing equipment.
an industrial process or from forestry or agriculture. Or, it
could be a desire to save money or to increase fuel supply
Biomass sourcing is very important. If the biomass is a
security by substituting an existing fossil fuel-based energy
residue from production at the same site, this includes only
production facility with a new biomass-fired plant. The
storage and fuel preparation at the site, but if the main
demand or wish will have to be transformed into a rough
biomass or the supplementary biomass comes from outside
technical concept and a preliminary plant design, including:
the site, sourcing becomes an important issue that will
influence the plant design.
• Fuel type and sourcing
• Site location and general layout Biomass has a relative low net heating value and low density;
so large volumes will need to be handled. One issue is whether
• Plant size and main design data
all storage and preparation of the fuel should take place at
• Technology selection. the plant site, or whether decentralized receiving stations for
The following sections describe these main considerations biomass collection, baling, and storage should be established.
in more detail.
6.1.2 SITE LOCATION AND GENERAL LAYOUT
SOURCING
6.1.1 FUEL TYPE AND SOURCING
Usually, the biomass plant will be situated next to an
The fuel type normally will be some kind of biomass residue or
industrial plant that can use the electricity, steam, or heat,
waste generated by a local agricultural or forest-based industry.
or where the biomass residue is produced.
In case additional biomass sourced from off-site is needed,

Even so, the specific location should be considered, taking
factors such as availability and similarity to the primary
into account consumers for electricity and steam/heat, access
biomass residue should determine the type of supplementary
roads for the biomass, and storage conditions.
biomass. This includes physical appearance (bales or not
bales, etc.), heating value, moisture content, ash content, and
Figure 6–1 shows an example of a layout for a plant using
ash composition. Ensuring similarity will reduce costs by
biomass in the form of straw. Typically, the biomass storage
enabling the use of the same storage, handling, and transport
and handling require most of the space, and, in this case, the
facilities for all types of biomass.
storage on-site contains biomass for two weeks of normal

Figure 6-1: General Layout of Straw-fired Power Plant with Storage Facility Located in Pakistan
Source: COWI.
operation. On-site fuel storage is traditionally designed for It is necessary to consider the cooling conditions on-site. A
1 to 14 days of capacity. fully condensing turbine produces significant amounts of
excess heat that must be removed either by water cooling
6.1.3 PLANT SIZE AND MAIN DESIGN DATA
(such as with river or ocean water) or by air cooling with
Several factors determine the optimal plant size: natural convection towers or forced convection towers,
which occupy significant amounts of space. Effective cooling
• Demand for electricity, process steam, or heat also is important because it greatly improves the process
• Amount of biomass residue available efficiency, whereas limitations in access to cooling water may
restrict the plant design.
• Site conditions (available space)
• Grid connection possibilities Figure 6–2 is an example of a PQ-diagram for a power

plant. It shows power output on the vertical axis and heating
• Regulatory restrictions
output on the horizontal axis. The area within the lines
• Economics including investment requirements, O&M is the possible operation area. The thick line to the right
costs, and price of energy sold. corresponds to maximum boiler load, while the thick line on
the left corresponds to minimum boiler load.
DEMAND FOR ELECTRICITY, STEAM, OR HEAT
The project may be driven by a demand for electricity, steam, When planning a biomass plant, the PQ-diagram can be used
or heat. This could be a new demand or a wish to substitute to verify that the required operation modes (required power
existing gas-, oil-, or coal-fired units. The electricity output and required heat output) are within the possible
generation could be used in an industrial production facility, operation area.
with any surplus going to the grid. If the industry also needs
The thick line below shows the operation line when there
process steam or perhaps heating, this may be the basis for
is only heat generated; the operation line is below zero
cogeneration of electricity and steam. If only process steam
because there is no power production, only power for
or heat is needed, this can be produced without a turbine
own-consumption.
and thus without electricity production.

The biomass residue may be supplemented with additional
Figure 6-2: PQ-diagram Showing Power Output on the
Vertical Axis and Heating Output on the Horizontal Axis biomass if this is needed to meet the energy demand or if the
biomass residue is only available seasonally. To reduce costs, it
35 is important to identify a supplementary biomass type that is
(89MJ/s 29 MW) able to use the same storage, handling, and transport facilities.
30
25 Specific requirements for the size or efficiency of the plant

Electricity (MW)
20
may cause significant variations in the required technology.
Flexibility requirements may rely on the possibility to bypass
15
parts of the process equipment; high efficiency may require
10 drier fuel and more-complex firing equipment (including
5 drying facilities) or more advanced fuel preparation

equipment (such as hammer mills), and large combustion
0
requirements may require multiple boilers.
-5
0 20 40 60 80 100 120 SITE CONDITIONS, AVAILABLE SPACE
Heating (MJ/s)
The maximum plant size may be determined by the area
Minnimum Boiler Load Maximum Boiler Load
available. If the plant is to be placed inside an existing
Own-Consumption Possible Operation Area building, this may restrict the size of the plant. If an outdoor
Source: IZES, 2016; COWI. site has been identified for the plant, the size of the available
area or authority requirements also may present restrictions.
AMOUNT OF BIOMASS RESIDUE AVAILABLE

For biomass plants, the fuel storage and handling facilities will
When the amount of biomass residue from a specific likely require the largest space, as illustrated in Figure 6–1.
agricultural or forestry-based industry is the determining
factor, the approximate plant size, expressed as electrical Large amounts of biomass placed in the open may result in
output for a steam-based power plant in full condensing significant amounts of dust or smell, and covered storage
mode, can be calculated from the equation: therefore is often preferred.
0.278 x M x Hu x e
P = ———————————— A thorough fuel supply-chain management is advisable in
To
order to secure just-in-time delivery to the site. Unless the
Where fuel storage is very large, biomass stores often hold enough
P = Plant size (MWe) fuel for less than one week of operation.
M= Mass flow (as received) (tons/year)
Hu = Net heating valuer (as received ) (MJ/kg) GRID CONNECTION
To = Yearly operation time (hours)
The plant may be situated in a rural location with unstable
e = Efficiency of the plant
or overloaded grid conditions. In this case, it is essential
Example based on an optimised medium sized that the plant is able to operate in island mode, and it is
straw-fired plant:
important that the grid can handle the amount of electricity
M= 50,000 ton/year
that is exported to the grid from the biomass plant.
Hu = 14 MJ/kg
To = 6,000 h/year equivalent full load hours REGULATORY RESTRICTIONS
e = 38%
The plant size may be restricted by local regulatory demands.
0.278 50,000 14 0.38
x x x Often, different rules apply for different plant sizes, or
P = ————————————————— = 12.3 MWe
6,000

different access to subsidies applies for different plant sizes, Although every biomass project is unique in terms of
but this is very dependent on the local regulations. biomass residue, location, and surroundings, costs may be
kept down if off-the-shelf and proven equipment is used
Also, restrictions on access to cooling water, etc., can wherever possible.
influence the decision regarding plant size.
A potential supplier can assist with more precise estimates
ECONOMICS
regarding costs, sizes, and the relationship between electrical
Economics—including investment requirements, operation output and steam output. On this basis, a firing diagram,
and maintenance costs, and the price of energy sold—will as shown in Figure 6–4, can be made. The firing diagram
also determine the design. The economics of biomass plants shows the relationship between fuel mass flow and the firing
is described in more detail in Chapter 12. rate in megajoules (MJ) per second. The mass flow design
limit for the boiler and the moisture level of the fuel together
6.1.4 TECHNOLOGY SELECTION
determine the limits for maintaining full boiler load. The
The technology selection (see Table 5–2) can be used to design limit for heat input determines the maximum fuel
determine the appropriate technology. feeding rate at fuel moistures below the maximum moisture
level. Using standard boiler plant sizes will usually be
Based on the preliminary indications about fuel type, site, cheaper than tailormade plants.
plant size, and technology, contact can be made with a
potential supplier in order to get a first rough estimate of the If required for business case calculations, the process can
CAPEX costs. For this supplier approach to be successful, a be described and optimized in more detail, using a process
certain level of technical knowledge is required. If this is not simulation tool.
available in-house, assistance from external experts will be
helpful. If rigid decisions on technology are made at an early Process simulation calculations can determine the output in
stage, prior to contact with a potential supplier or an adviser, terms of electricity and steam/district heating from a given
this may cause significant financial losses later in the project. input. Figure 6–5 shows an example of a process simulation.
This can be used in business case calculations in order to
Figure 6–3 shows a simplified biomass plant design. optimize a plant configuration. Often, several iterations
between process simulations and business calculations will
Figure 6-3: Simplified Design of a Biomass Plant
Steam
BOILER TURBINE G Power
Proces steam/
ENERGY heat
FLUE GAS
Fuel FUEL YARD COMBUSTION Emission
CLEANING
Ash Ash
Source: COWI.

Figure 6-4: Firing Diagram of Lisbjerg Biomass Energy Plant in Denmark
Figure 6-4: Firing Diagram of Lisbjerg Biomass Energy Plant in Denmark
170
160
150
140
130
Maximum thermal load
120
Maximum continuous thermal load (MCTL)
110
Fuel input [MW]
100
90
80
70
Minimum mechanical load at MCTL

60
Maximum mechanical load

50 Minimum thermal load
Nominal mechanical load

Minimum mechanical load
40
30
20
10
0
0 5 10 15 20 25 30 35 40 45 50
Fuel input [ton/h]
Source: COWI.
be required. Process simulations tools can determine optimal required by local and/or national authorities according to
mechanical design of the plant hardware in terms of tube applicable laws and regulations. The majority of these must
banks design, turbine stage design, heat exchanger design, etc. be obtained prior to the actual construction phase, while
some are needed before start of operation. The majority
For example, a requirements-to-turndown ratio larger than of the documents issued by authorities will contain terms,
1:3 (that is, operation at loads less than 30 percent load for clauses, and conditions regulating the construction and
the biomass plant due to large variations in consumption of operation of the biomass plant.
industrial heat) must be identified at an early stage and prior
to final design of the biomass plant. Some of these official documents are business-related
permits, while others are sector-specific. Sector-specific
6.2 PERMITTING documents typically include: environmental and social
6.2.1 INTRODUCTION impact assessment, wastewater discharge permit, building
construction permit, planning permits (at the local,
This section describes the specific permits and authorizations
municipal, and/or provincial levels), licenses for electrical
necessary for establishing a new biomass plant, from the
grid connection, and dispensations from natural and cultural
start of planning to the decommissioning of the plant.
conservation clauses, etc.
Chapter 15 provides a more general description of the
environmental and social issues for biomass plants from a Environmental permits normally will apply if the installation
lifecycle perspective. exceeds a specified capacity threshold given in the permitting
regulation of the country. The requirements and procedures
The owner of installations, such as biomass power plants,
related to the obtaining of the required documentation are
should obtain a number of authorizations, dispensations,
highly country-specific. In some countries, several or even a
permits, licenses, approvals, and other documentation

Figure 6-5: Conceptual Design for Biomass Power Plant in Southeast Asia (to give an impression of the possibilities
for using process simulation calculations)
ata C
THERMOFLEX Version 24,1 Revision: May 5, 2015 COWI A/S COWI A/S Industry & Energy (Thermal Power) t/h kcal/kg
Converted SteamPro file 2527 01-15-2015 19:55:59 C:\Users\HP_G6\Desktop\Mass-heat balance\485 C 68 bar single air heat-dry air cooled.stp
BELO/COWI
May 12, 2015
Conversion file from SteamPro
HPT
Ambient temperature 40 C
Ambient RH 60 %
Ambient wet bulb temperature 32,56 C 11530 kW
Gross power 11530 kW
G1
Plant auxiliary 1140,5 kW
Net power 10389 kW 70,73 p 72,12 p
286,5 T
386,7 T
Net fuel input(HHV) 11823 kcal/s 46,95 m 46,95 m 67 p 51,54 p 3,079 p Steam quality
70,73 p 489,7 T 458,8 T
Net electric efficiency(HHV) 20,99 % 38 35 38 386,7 T 48,4 m 47,27 m
149 T
42,56 m 0,9231
46,95 m
CS1 CS2
649,4 T 803,9 T 945,8 T 0,228 p
62,52 T
73,56 p 42,74 m
39 134,3 T 3,079 p
72,12 p
1,452 m 72,12 p 149 T
286,5 T 34
35 286,5 T 4,708 m
9,39 m Fan
46,95 m
CEV
34
326,3 kW
72,12 p
261,5 T 37 72,12 p
36 261,5 T
9,484 m
37
47,42 m
502 T
72,12 p
261,5 T
36
ECO1
47,42 m
40
73,56 p
134,3 T 13,97 kW
47,42 m 225,6 T 25 T
13,06 m
O2%
3,337 % 0,8437 p
1,078 p ASY Excess steam 147,3 T
150 T 1,095 m
37,96 m GSC
2,932 p
40 T 147,4 T
1,079 p 37,96 m 4,708 m
187,5 T 183 T 183 T 45,78 T
83,25 m 83,25 m 83,25 m 37,96 m
67,58 kW
126,9 kW 47,17 T
32,34 m 1) Units maintained from original file 73,56 p
40
134,3 T 5,22 p
47,17 T 2) Rotary air heater kept in place => 47,42 m 39 76,52 T
32,34 m actually tubular airheater 208,3 kW 44,16 m
40 T
32,34 m
71,28 kW
1657 05-13-2015 16:56:43 file= C:\Users\belo\Documents\LTL Holding\LTL Holding SteamPro conversion.tfx Complete cycle
Source: COWI.
single authority will manage all approvals/licenses. In other • Permits from cultural heritage authority
countries, several institutions are involved at the national,
• Procedures specific to renewable energy production
regional, and local levels.
• Permits for the construction phase.
As the entire process related to obtaining documents can be
The entire authority approval process includes several
time consuming and costly, investors must be fully aware of
steps, which vary among countries due to different national
all requirements before making investments.
standards, conditions, and requirements. Variations may occur
due to the location and size of the project, but they also may
Different approvals/licenses at the general level include:
relate to how the project fits into the national legal framework.
• General documentation related to business operation

Obtaining the necessary permits and licenses may be a time-
• Investment license, if applicable consuming exercise, but it also can be a valuable process. As
• License to import equipment, if applicable part of the work in obtaining, for example, an environmental
permit, environmental risks and impacts are identified.
• Approvals from local authorities for the right
to conduct business When subsequently identifying the appropriate preventive
• Land-use right and mitigation measures, the risks and impacts will be

effectively managed in due time by changing the project and 6.2.2 THE PLANNING PHASE
thus reducing or eliminating risks and negative impacts. CONCEPTUAL DESIGN STUDY
With use of the right approach and tools, the authorization
The first step is the preparation of a conceptual design study
process ultimately may have a positive effect on the project.
that will include the technical description of the proposed
The early preparation and implementation of a detailed project and all boundaries and interfaces such as grid
plan for the statutory process will ensure that the necessary connection, residues, waste deliveries, etc.
documents are in place in due time before the next phase of
The result of the conceptual study will be the most
the project begins.
important input to the screening and scoping phases of the
Assessments of the project impacts and the subsequent environmental and social impact assessment (ESIA). Based
introduction of mitigation measures also may produce on this, the competent authority decides if a full ESIA is
an economic advantage for the project because it will be required for the project and defines the details and scope of
implemented according to sustainable principles and in the content of this report.
harmony with the existing natural environment and with the
ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT
existing land-use plan, without any serious conflicts of interests.
Environmental and social impact assessment is a requirement
An early and initial stage of consultations with the found in most countries for large industrial projects
authorities, statutory bodies, and other relevant stakeholders (including biomass combustion plants and biogas plants).
is therefore advisable. The identification and assessment of environmental and
Source: COWI.

social risks and impacts (usually carried out through the Baseline studies may include:
preparation of an assessment) also is a general requirement
under IFC Performance Standards, the Equator Principles, and • Review of the institutional and legal framework
standards applied by other international financial institutions. • Biophysical and socioeconomic baseline surveys, including:
• Terrestrial fauna
Figure 6–6 provides an overview of the ESIA process. It defines
the key guiding principles and processes that apply to all impact • Terrestrial flora
assessments, drawing on best practices. • Hydrology and aquatic ecology
• Soil and seismic survey

The ESIA process starts by registration of the project with the
authorities. Registration may be on a standard template but • Marine ecological surveys
will require a brief description of the planned project, in order • Meteorology
to decide if a full ESIA is required. The authorities will do a
• Measuring of ambient dust levels
screening of the project to decide the category of assessment.
• Measuring of ambient air quality
In the scoping phase, the significant environmental and social • Air modeling
aspects that should be included in the ESIA are selected. The
• Measuring of ambient noise levels
scoping is generally based on current knowledge, but it also
may require baseline studies of selected aspects. • Measuring of ambient vibration levels
• Noise modeling
Figure 6-6: The Environmental and Social Impact Assessment Process
Source: COWI/ERM.

• Socioeconomic survey, including: • Identifying and determining the significance of impacts
• Demographic characteristics • Design of mitigation measures

• Land use, cover/pattern • Analysis of project alternatives
• Land tenure
• Preparation of environmental and social management
• Housing and settlements and monitoring plans
• Social and physical infrastructure, for example • Public consultations.
education, health, transportation, health services,
energy sources, water sources It is an iterative process, where certain elements of the project
may be modified (for example, filters, treatment plants, noise
• Livelihoods/economic activities, including fisheries
and maritime users attenuation, etc.) until the project complies with acceptable
limits. This process is illustrated in Figure 6–7.
• Employment and income
• Livestock The ESIA should be subject to public consultations as
• Gender and HIV/AIDS issues required by IFC Performance Standards and local legislation,
and comments and suggestions for improving the project
• Public health and nutrition
should be assessed and included if relevant.
• Culture and traditions
• Ethnic and community coherence The Environmental and Social Management Plan will include
procedures and organizations to ensure that the project is
• Planned development activities/development plans
built and operated the way it is intended and described in
• Agriculture the ESIA, and that the environmental and social effects are
• Vulnerable and disadvantaged/marginalized groups monitored and reported as required. The Environmental and
• Social strengths (for example, community service Social Management Plan can provide details on operational
organizations, savings and credit groups, public instructions for contractors and operators.
institutions, and agencies)
Finally, the ESIA report (including the Environmental
• Archaeological survey
Management Plan) should receive final approval from the
• Land-use survey relevant authorities. The next page shows a sample table of
contents for a biomass ESIA, based on COWI experience.
• Fisheries survey and mapping
• Stakeholder identification and public consultation. Figure 6-7: The Mitigation Process in an Environmental
and Social Impact Assessment
In the scoping phase, relevant technological alternatives and
alternative locations will be selected, so they can be assessed
in parallel with the project in the ESIA. As part of the scoping
phase, it might be advantageous to hold a scoping workshop
that includes the project owner and the main stakeholders.
The scoping report will define the Terms of Reference

for the ESIA study.
The ESIA includes the following steps:
• Detailed baseline study

Source: COWI/ERM.

Figure 6-8: Sample Table of Contents for an Environmental and Social Impact Assessment Report
0. NON-TECHNICAL SUMMARY 5.3 Impacts of excavations
1. INTRODUCTION 5.4 Impacts from leakage of oil/fuel contamination
1.1 Background of soil and groundwater
1.2 List of consultants 5.5 Impacts from construction waste
1.3 Study area for the ESIA (including a map) 5.6 Impacts of excess rainfall (roads, surface runoff)
2. LEGAL FRAMEWORK FOR ESIA STUDIES 5.7 Impacts on employment
2.1 National legislation and procedures for ESIA 5.8 Conclusions
studies in country 6. POTENTIAL NEGATIVE/POSITIVE IMPACTS ON
2.2 International legislation related to THE ENVIRONMENTAL AND SOCIAL CONDITIONS
biomass-to-energy IN THE OPERATION PHASE
3. DESCRIPTION OF THE PROJECT 6.1 Introduction (potential permanent impacts)
3.1 Introduction 6.2 Impacts on terrestrial flora, animals, and birds
3.2 Current energy source 6.3 Impacts on groundwater
3.3 Conceptual study for the new 6.4 Impacts on surface water
biomass-to-energy plant 6.5 Impacts on air quality
3.4 Design and plant data 6.6 Impact on noise levels
3.5 Visualizations 6.7 Impact on consumption of raw materials
3.6 Alternatives (including zero-alternative) and solid waste
4. DESCRIPTION OF BASELINE 6.8 Impact on sociocultural and socioeconomic

conditions, including health
4.1 Introduction
6.9 Summary of impacts and conclusions
4.2 Meteorology (available data on wind, temperature, rainfall)
7. MITIGATION MEASURES
4.3 Land use
7.1 Control of noise and dust (during construction)
4.4 Topography, landscape, habitats, vegetation,
and soil types 7.2 Mitigation of ground water impacts
4.5 Terrestrial fauna and birds 7.3 Mitigation of air impacts
4.6 Groundwater 7.4 Mitigation of noise impacts
4.7 Hydrology 7.5 Mitigation of raw material consumption

and solid waste
4.8 Surface water
7.6 Mitigation of soil and groundwater impacts
4.9 Air quality
7.7 Mitigation of sociocultural, socioeconomic,
4.10 Noise
and health conditions
4.11 Protected areas
8. ENVIRONMENTAL MANAGEMENT PLAN
4.12 Cultural and archaeological assets
8.1 Strategy for environmental management
4.13 Sociocultural and socioeconomic conditions,
8.2 Roles and responsibilities
Including health conditions
8.3 Organization for implementation of the plan
4.14 Conclusions
8.4 Monitoring during construction phase
5. POTENTIAL IMPACTS ON THE ENVIRONMENTAL AND
SOCIAL CONDITIONS IN THE CONSTRUCTION PHASE 8.5 Actions on exceedance and actions on emergencies
5.1 Introduction (potential temporary impacts) 8.6 Monitoring in the operation period
5.2 Impacts of noise and dust from traffic 9. REFERENCES
Source: COWI.

6.2.3 THE CONSTRUCTION PHASE example, include mitigation of noise and dust, use of
specific fuels (natural gas or electricity) for engines,
Environmental impacts from actual construction of the
requirements for sorting and disposal of construction
facility are classified as “temporary” since these activities are
waste and handling of rainfall on the construction site, as
limited in time. The environment normally recovers when the
well as handling of stormwater runoff.
activities cease. One of the principal objectives of the ESIA is
to contribute to the definition of the construction methods so • A construction or building permit normally will be
that the impacts are kept to a minimum and do not develop required prior to the onset of the construction of the
into permanent impacts. plant. The building permit will include an assessment
of fire hazards and fire protection and mitigation.
ENVIRONMENTAL IMPACTS DURING THE
Implementation of the conditions in the building permit
CONSTRUCTION PHASE
will ensure that the buildings adhere to all technical
The important social and environmental impacts during requirements for the buildings, as well as handling of
construction are shown in Table 6–1. stormwater runoff.
• A civil aviation security permit stating that any stacks or

Table 6-1: Environmental and Social Impacts:
power transmission lines to be built by the project will
Construction Phase
not interfere with flight routes.
Impact
Air • Dust from soil handling and excavation • A permit for land use (physical planning/zoning
• Emissions from engines regulations) or approved local planning document.
(trucks, excavators, generators, etc.)
Noise • Noise from machinery and materials 6.2.4 THE OPERATIONAL PHASE
transport
Impacts during the operational phase of the project are
Land/Soil • Disposal of construction waste
classified as “permanent.” They represent the permanent
Surface water/ • Leakage of oil/fuel features of the project, such as new infrastructure locations
Groundwater (contamination of soil and groundwater)
and waste handling facilities. In this case, the objective of
• Handling of excess rainfall
the ESIA is to interact with the designers to ensure that the
(roads, surface runoff)
impacts are at an acceptable low level, if necessary through
Employment • Employment effect of the project
construction the implementation of preventive and mitigating measures.
Land • Impact on habitats from clearing the area
conversion for plant construction Impacts will be considered under both normal operational
Source: COWI.
conditions and in the case of emergencies.
ENVIRONMENTAL IMPACTS IN THE OPERATIONAL PHASE
PERMITS NECESSARY FOR THE CONSTRUCTION PHASE In the operational phase, particular attention will be paid
both to the negative impacts and to the environmental
These may include:
enhancement by the project. Environmental enhancements
• Before excavations are started, it normally will be include fewer environmental impacts from solid waste
necessary to obtain a cultural heritage authority permit landfills, combined with energy production that is climate
stating that the land parcel is free of archaeological/ friendly and that substitutes fossil fuels. The project may
cultural heritage sites and objects. ensure effective use of solid waste that otherwise would
create environmental problems.
• Permits for the environmental impacts and nuisances
during construction are normally specified in an ESIA Examples of social and environmental impacts identified as
permit based on the ESIA report. Conditions may, for important to biomass incineration and that should be the

focus of the ESIA report and the environmental permit for the World Bank Group (2007) Environmental, Health and
the operation are shown in Table 6–2. In specific cases, other Safety General Guidelines and the World Bank Group (2008)
impacts may be necessary to assess and include in the permit. Environmental, Health, and Safety Guidelines for Thermal
See the section on ESIA. Power Plants are a key reference document.
Table 6-2: Environmental and Social Impacts: The necessary environmental permits and other permits for
Operational Phase the operational phase may include:
Impact
Air • Gaseous emissions • ESIA approval, including approval of an environmental
(combustion plant stack emissions) management plan regulating and monitoring all
• Odor significant impacts as described in the assessment report
(biomass reception areas, stack from plant)
• Noise • Permits to operate each installation with conditions on
(and vibration) (pretreatment, internal noise and vibrations, air emissions, odor, stack heights,
transport, plant)
mitigation of risks (for example, from ammonia storage
Land/Soil • Habitat changes
or heavy oil storage), disposal of solid waste, protection
(impact on vegetation and animals)
of soil and groundwater, and discharge of rain water
• Disposal of residues
(fly ash) from the project area
Surface water/ • Wastewater from discharge of wastewater • Permit for discharge of wastewater to public sewer or
Groundwater from flue gas condenser and surface water
from the installation to surface water bodies, with clauses and conditions on
Socioeconomic • Traffic to and from the plant water quantities and concentrations of pollutants (for
and health
• Visual amenity example, from flue gas condensate)
conditions
• Employment effects of the plant • Permit for water use or water extraction
• Health effects on neighboring areas
• Energy permit or other authorization from the energy
• Taking of valuable farmland
authority confirming that the project conforms with the
Source: COWI. national energy strategy/power development plan (in
some countries)
ENVIRONMENTAL PERMITS AND OTHER PERMITS FOR • Permit for grid connection for electricity producers.
OPERATION
When pressurized equipment is erected for the first time, an
The ESIA will, in some countries, constitute the sole inspector normally will carry out a control inspection on the
and sufficient foundation on which the issuing of the equipment to ensure that proper documentation exists for
environmental permit is based, while in other countries, the production of the pressurized equipment and its safety
a separate application for an environmental approval devices, before the permit for start of operation can be issued.
may be necessary according to standard forms. In many
countries, BAT (Best Available Techniques) or BATNEEC Different authorities may handle the individual permits, but
(Best Available Techniques Not Entailing Excessive sometimes the competent authority coordinates them.
Cost) requirements will be essential for obtaining the
6.2.5 THE DECOMMISSIONING PHASE
environmental permits as well as complying with local
emission limit values and standards (for example, the The decommissioning phase of the project is a temporary
European Union’s BAT conclusions for Large Combustion phase similar to the construction phase, but the
Plants and Waste Incineration Plants, which sets binding environmental impacts from the decommissioning may
limit values for EU countries but also is applied as guiding be more permanent. The plant may have caused soil
principles in many countries outside the EU). Further to this, and groundwater pollution that needs to be cleaned

up over a long period, and the building waste from the 6.2.6 IFC PERFORMANCE STANDARDS
decommissioning project may be hazardous waste that has
IFC Performance Standards on Environmental and Social
to be disposed of safely in landfills or by incineration.
Sustainability2 provide IFC clients3 with guidance on how to
ENVIRONMENTAL IMPACTS IN THE DECOMMISSIONING identify environmental and social risks and impacts. They
PHASE are designed to help avoid, mitigate, and manage risks and
impacts as a way of doing business in a sustainable way,
During the decommissioning phase, particular attention
including stakeholder engagement and disclosure obligations
is paid to the negative impacts that might follow. Thus,
of the client in relation to project-level activities.
the project owner should pay specific attention to the
environmental issues presented in Table 6–3.
In connection with its direct investments (including project and
corporate finance provided through financial intermediaries),
In the decommissioning phase, the following permits
IFC requires its clients to apply the Performance Standards to
may be necessary:
manage environmental and social risks and impacts so that
• A permit from national authorities to decommission development opportunities are enhanced.
the installation and remove it from the grid
The IFC Performance Standards have become globally
• A permit for handling and disposal of building waste recognized good practice in dealing with environmental
• A building/construction permit for the and social risk management, and many other financial
decommissioning work. institutions have aligned with them.
The eight Performance Standards establish standards that the

Table 6-3: Environmental and Social Impacts:
client is to meet throughout the life of an investment by IFC:
Decommissioning Phase
Impact
Performance Standard 1: Assessment and Management of
Air • Dust from soil handling and reclamation
Environmental and Social Risks and Impacts
of land
• Emission from engines Performance Standard 2: Labor and Working Conditions
(trucks, excavators, generators, etc.)
Performance Standard 3: Resource Efficiency and Pollution
Noise • Noise from machinery
and materials transport Prevention
Land/Soil • Disposal of building waste
Performance Standard 4: Community Health, Safety, and Security
Surface water/ • Leakage from oil/fuel
Performance Standard 5: Land Acquisition and Involuntary
Groundwater (contamination of soil and groundwater)
Resettlement
• Handling of excess rainfall
(roads, surface runoff)
Performance Standard 6: Biodiversity Conservation and
Employment • Employment effect of project
Sustainable Management of Living Natural Resources
decommissioning
Source: COWI.
Performance Standard 7: Indigenous Peoples
Performance Standard 8: Cultural Heritage
2 Available at: http://www.ifc.org/wps/wcm/connect/topics_ext_

content/ifc_external_corporate_site/ifc+sustainability/our+
approach/risk+management/performance+standards
/environmental+and+social+performance+standards+and+
guidance+notes.
3 The party responsible for implementing and operating the

project that is being financed (or the recipient of the financing,
depending on the project structure and type of financing).

Where environmental or social risks and impacts are employment creation and income generation should be
identified, the client is required to manage them through accompanied by protection of the fundamental rights of
its Environmental and Social Management System (ESMS) workers. The objectives are:
consistent with Performance Standard 1. Performance
Standard 1 applies to all projects that have environmental and • To promote the fair treatment, non-discrimination, and
social risks and impacts. Depending on project circumstances, equal opportunity of workers.
other Performance Standards may apply as well. • To establish, maintain, and improve the worker-
management relationship.
In addition to meeting the requirements under the
Performance Standards, clients must comply with applicable • To promote compliance with national employment and
national law, including those laws implementing host labor laws.
country obligations under international law. When host • To protect workers, including vulnerable categories of
country regulations differ from the levels and measures workers such as children, migrant workers, workers
presented in the Environmental, Health, and Safety engaged by third parties, and workers in the client’s
Guidelines, projects are expected to achieve whichever is supply chain.
more stringent.
• To promote safe and healthy working conditions, and the
Performance Standard 1—Assessment and Management of health of workers.
Environmental and Social Risks and Impacts—underscores the • To avoid the use of forced labor.
importance of managing environmental and social performance
Performance Standard 3—Resource Efficiency and Pollution
throughout the life of a project. The objectives are:
Prevention—recognizes that increased economic activity and
• To identify and evaluate environmental and social risks urbanization often generate increased levels of pollution
and impacts of the project. to air, water, and land, and consume finite resources in a
manner that may threaten people and the environment at the
• To adopt a mitigation hierarchy to anticipate and avoid,
local, regional, and global levels. The objectives are:
or where avoidance is not possible, minimize, and, where
residual impacts remain, compensate/offset for risks • To avoid or minimize adverse impacts on human health
and impacts to workers, Affected Communities, and the and the environment by avoiding or minimizing pollution
environment. from project activities.
• To promote improved environmental and social • To promote more sustainable use of resources, including
performance of clients through the effective use of energy and water.
management systems.
• To reduce project-related greenhouse-gas emissions.
• To ensure that grievances from Affected Communities
Performance Standard 4—Community Health, Safety, and
and external communications from other stakeholders
Security—recognizes that project activities, equipment, and
are responded to and managed appropriately.
infrastructure can increase community exposure to risks and
• To promote and provide means for adequate engagement impacts. The objectives are:
with Affected Communities throughout the project cycle
on issues that could potentially affect them and to ensure • To anticipate and avoid adverse impacts on the health
that relevant environmental and social information is and safety of the Affected Community during the project
disclosed and disseminated. life from both routine and non-routine circumstances.
Performance Standard 2—Labor and Working Conditions— • To ensure that the safeguarding of personnel and
recognizes that the pursuit of economic growth through property is carried out in accordance with relevant

human rights principles and in a manner that avoids or • To ensure that the development process fosters full respect
minimizes risks to the Affected Communities. for the human rights, dignity, aspirations, culture, and
natural resource-based livelihoods of Indigenous Peoples.
Performance Standard 5—Land Acquisition and Involuntary
Resettlement—recognizes that project-related land acquisition • To anticipate and avoid adverse impacts of projects
and restrictions on land use can have adverse impacts on on communities of Indigenous Peoples, or when
communities and persons that use this land. The objectives are: avoidance is not possible, to minimize and/or
compensate for such impacts.
• To avoid, and when avoidance is not possible, minimize
• To promote sustainable development benefits and
displacement by exploring alternative project designs.
opportunities for Indigenous Peoples in a culturally
• To avoid forced eviction. appropriate manner.
• To anticipate and avoid, or where avoidance is not • To establish and maintain an ongoing relationship based
possible, minimize adverse social and economic impacts on Informed Consultation and Participation (ICP) with
from land acquisition or restrictions on land use by: 1) the Indigenous Peoples affected by a project throughout
providing compensation for loss of assets at replacement the project’s lifecycle.
cost; and 2) ensuring that resettlement activities are
• To ensure the Free, Prior, and Informed Consent (FPIC)
implemented with appropriate disclosure of information,
of the Affected Communities of Indigenous Peoples when
consultation, and the informed participation of those
the circumstances described in this Performance Standard
who are affected.
are present.
• To improve, or restore, the livelihoods and standards of
• To respect and preserve the culture, knowledge, and
living of displaced persons.
practices of Indigenous Peoples.
• To improve living conditions among physically displaced
Performance Standard 8—Cultural Heritage—recognizes
persons through the provision of adequate housing with
the importance of cultural heritage for current and future
security of tenure at resettlement sites.
generations. The objectives are:
Performance Standard 6—Biodiversity Conservation and
Sustainable Management of Living Natural Resources— • To protect cultural heritage from the adverse impacts of
recognizes that protecting and conserving biodiversity, project activities and support its preservation.
maintaining ecosystem services, and sustainably managing
• To promote the equitable sharing of benefits from the use
living natural resources are fundamental to sustainable
of cultural heritage.
development. The objectives are:
• To protect and conserve biodiversity.
• To maintain the benefits from ecosystem services.
• To promote the sustainable management of living natural

resources through the adoption of practices that integrate
conservation needs and development priorities.
Performance Standard 7—Indigenous Peoples—recognizes

that Indigenous Peoples, as social groups with identities that
are distinct from mainstream groups in national societies, are
often among the most marginalized and vulnerable segments
of the population. The objectives are:

Source: COWI.
82 Procuring the Biomass Plant

PROCURING THE BIOMASS PLANT
7
The procurement process can be structured in many ways, and • Self-finance (the cash flow and reserves of the owner)
it is of utmost importance to discuss and decide the procurement
• On-balance sheet debt (from banks or a mother company)
strategy at an early stage in the project, as this can influence
many other choices to be taken. The procurement strategy also is • Supplier credits and leasing solutions under traditional
crucial to investors, as it outlines who takes the design risks, the contracts, DB and DBO
interface risks, and the risks associated with final price and time. • Off-balance sheet financing through an SPV (Special
Purpose Vehicle) under a DBFO (mainly for larger facilities).
7.1 THE PROCUREMENT STRATEGY
For small and medium companies, supplier finance may
Procurement and contracting of biomass plants may come offer better terms than the financing obtainable in the local
in the form of a variety of models that reflect the increasing financial market. To keep competitive pressure on suppliers,
transfer of responsibility from the owner to the contractor(s): the possibility of supplier finance may be included as an
evaluation parameter when requesting supplier costings or
• Traditional contracts, with division of the plant
tendering technology/equipment packages. This will enable
into a number of partial contracts with separate
all suppliers to compete on equal terms and will ensure the
detailed designs
owner a good overview of the available supplier finance
• DB (Design–Build) / EPC (Engineering, Procurement, options and terms. For further information on financing,
Construction) / Turnkey contract, with one contractor see Chapter 15.
being responsible for the design and construction
for the entire plant 7.2 TYPE OF CONTRACTS
• DBO (Design–Build–Operate) / BOT (Build–Operate– The most common approaches worldwide are traditional
Transfer) type contracts, where the contractor also contracts that divide the plant into a number of partial
operates and maintains the plant contracts with separate detailed designs and a DB / EPC4 /
turnkey contract with one contractor being responsible for
• DBFO (Design–Build–Finance–Operate), where the
the design and construction of the entire plant.
contractor takes full responsibility for the provision
of a biomass-based power plant and is remunerated
In Table 7–1 below, we compare the two different
through the provision of heat and power.
approaches, also including an approach based on EPC
The decision on the type of contract will depend on the degree principles, but having a few EPC-like contracts.
to which the biomass plant is integrated with the owner’s
existing facilities and on the owner’s ability and willingness to
transfer design decisions, operational control, and project risks
4 EPC stands for Engineering, Procurement, and Construction
to the contractor. and is a prominent form of contracting agreement in the
construction industry. The engineering and construction
The procurement and contracting approaches are, to some contractor will carry out the detailed engineering design of the
project, procure all the equipment and materials necessary,
extent, linked to the available financing sources that typically and then construct to deliver a functioning facility or asset to
reflect one of the following: its clients. Companies that deliver EPC projects are commonly
referred to as EPC contractors.

Table 7-1: Types of Contracts
Multiple EPC Contractors
EPC/Turnkey (for example, Many
(one contract) 2–4 contracts) Contractors
The owner does not wish to be involved in the day-to-day progress Yes No No
monitoring of the work, provided that the end result meets the
performance criteria that have been specified.
The owner wishes a high degree of certainty that the agreed Yes Yes No
contract price and time will not be exceeded.
The owner is willing to pay more for the construction of the project Yes Yes No
in return for the contractor bearing the extra risks associated with
enhanced certainty of final price and time.
The owner wants a high degree of involvement, for example in the No No Yes
choice of subcontractors and in the detailed design.
Source: COWI.
• The first approach is an EPC/turnkey contract with one be supervised, applying principles similar to those used for
contractor responsible for the entire plant construction, individual contractors.
including mechanical, electrical, and civil works.
DBO and especially DBFO contracts may be more complex
• The second approach is also based on EPC principles
and require careful considerations involving financial
but divides the plant into two to four EPC contracts,
experts. A contract involving operation and maintenance
for example an electro/mechanical EPC and a civil
requires a certain length, typically five to seven years
construction EPC. The electro/mechanical contract
or more. If the owner is uncertain about operation and
may be further split into, for example, fuel handling
maintenance, an alternative to DBO or DBFO may be a
equipment and energy plant, dependent on the specific
traditional setup with partial contracts or EPC/turnkey,
project and the owner’s wishes.
but engaging the contractor as operation supervisor for a
• The third approach is to divide the plant into a number certain period of time after handover/takeover, for example
of partial contracts and to prepare separate detailed for six months to two years. In this period, the contractor’s
design for some of these, such as civil construction. supervisor will assist and train the owner’s own operation
and maintenance staff. This solution is especially useful
The use of multiple contractors places the responsibility of
in situations where it is difficult to engage sufficient well-
interface management, coordination, and risk allocation
skilled/trained personnel.
between the contractors with the owner or the owner’s
engineer. This critical coordination task requires a very
Alternatively, the owner can enter a DBO or DBFO contract
experienced engineer, because coordination and supervision
but negotiate an optional right to take over the operation
responsibility begins with the study and planning phase
and maintenance of the biomass plant after two and four
and continues until and beyond plant commissioning. An
years. If, after two years’ operation, the owner has mobilized
alternative solution is to assign an EPCM (Engineering,
sufficient and skilled staff, the owner can exercise the right
Procurement, and Construction Management) contractor5
to take over the operation and maintenance obligations.
that has overall responsibility, including for plant
This alternative, however, may introduce discussions about
engineering. In such a case, the developer would have less
the maintenance standard at the time of takeover of the
direct coordination, but the EPCM contractor would have to
operation and maintenance obligation.
5 A general contractor (main contractor) is responsible for the

day-to-day oversight of a construction site, the management of All in all, the coordination of many contracts for one
vendors and trades, and the communication of information to biomass plant has a cost, and it seems reasonable to take a
all parties throughout the course of a project.

premium for taking risks. Owners or developers of biomass plays a role as the employer’s representative to ensure
plants must carefully evaluate the add-on to the contract that the contract is carried out properly.6
price for moving from a setup with the plant divided into
Figure 7–1 provides a guide to the choice of contract.
many contracts to an EPC type of contract. If the add-on
to the contract price is evaluated as too large, the owner or The FIDIC Silver Book pertains to EPC and turnkey projects
developer may, to minimize the CAPEX, choose the setup and is generally applicable to biomass-to-energy projects.
with the plant divided into multiple contracts. The Silver Book is a template for a lump-sum contract and
assigns most risks to the contractor, offering greater certainty
7.3 FORM OF CONTRACT to the owner concerning project cost and completion date.
A wide range of standard contract forms are available Using this type of contract, the owner is typically not
worldwide, but most of them are national or regional involved in the day-to-day progress of the work, provided
standards. These may be used, but the disadvantage that the end result meets the performance criteria that have
might be that international contractors do not know these been specified.
specific standard contracts and might be reluctant to use
The advantage of the EPC/turnkey contract is the higher
them. Typically, international contractors will require
degree of certainty that the agreed contract price and time
internationally accepted standard contracts.
will not be exceeded. The parties concerned (for example,
Standard contract templates are available from sources sponsors, lenders, and the owner) are willing to see that the
such as the FIDIC (International Federation of Consulting contractor is paid more for the project construction in return
Engineers), the ICE (Institution of Civil Engineers), and the for the contractor bearing the extra risks for meeting the
JCT (Joint Contracts Tribunal). agreed price and time.
The standard forms from the FIDIC are widely used for If the procurement is split into two or more contracts
international procurement in the energy sector. The FIDIC typically the Yellow or the Red Book is used. The Gold Book
contracts are written in formal legal English and are pertains to DBO projects.
drafted based on common law background. They have
The individual clauses of the FIDIC standard contracts are of
been developed over decades and are well respected among
general nature. Amendments and supplements (as mentioned
owners, contractors, and investors.
below) are needed and should turn the standard contract
FIDIC publishes standard conditions of contract, such as for: into a bespoke and project-specific contract form:
• Conditions of contract for EPC/Turnkey projects (also • Working language

called “The Silver Book”). • Applicable law and ruling language
• Conditions of contract for construction for building and • Place of arbitration
engineering works designed by the employer (also called
• Liability
“The Red Book”).
• Liquidated damages
• Conditions of contract for plant and DB for electrical
and mechanical plants for building and engineering • Delay damages.
works designed by the contractor (also called “The
More information on the FIDIC standard contracts can be
Yellow Book”).
found at www.fidic.org.
• All FIDIC standard conditions of contract form a
contract between a client/employer and a contractor. The 6 FIDIC offers a special contract for the employment of the
consulting engineer is not a party to these contracts but engineer—Client/Consultant Model Services Agreement (2006
White Book).

Figure 7-1: Selecting Which FIDIC Contract to Use
Source: FIDIC.
7.4 TENDERING PROCEDURE During the project development phase, potential contractors

also may use budgetary proposals.
The tendering procedure may use a national or regional public
procurement system. Alternatively, direct contact with selected 7.4.1 PUBLIC PROCUREMENT
contractors may be used if allowed under national law. The
If a public procurement system is used, it is recommended to
public procurement system offers the advantage of coming
use prequalification of potential suppliers. In this approach,
in contact with all potential bidders. It is recommended to
only experienced, financially sound, and capable contractors
conduct a market sounding prior to the tendering procedure
should be selected for the bidding process.
to gain an overview of potential bidders, their applied
technologies, and their attitude to the various contract forms.
The prequalification should specify relevant selection
The market sounding may include the following questions:
criteria, such as financial strength and technical capacity,
with references from similar projects.
• Does the supplier offer technology that is suitable and
proven for the specific project?
It is recommended that the tender specification be ready at
• Does the supplier have experience with the biomass fuel the time of prequalification and that the evaluation criteria
to be used? are presented.
• Does the supplier have reference plants of the same size?

Having selected typically three to five bidders, the tender
• Does the supplier offer sufficient financial strength? specification is issued. The bidders typically will need around
three months to prepare an EPC/turnkey proposal. The
• Does the supplier possess the necessary capability—
contract will be awarded to the successful bidder according
that is, know-how and technical capacity (technicians,
to the award criteria described and applying the evaluation
workers, workshop facility, etc.)
model and methods adopted and announced.
• Does the supplier have a local service setup?

7.4.2 NON-PUBLIC PROCUREMENT 10 to 20 pages) defining the most important issues such as
scope of supply, limits of supply, performance requirements,
Investors for mid-size projects are likely to be private
guarantees, time schedule, and commercial issues. The first
companies operating, for example, plantations and/or
proposal from the invited bidders can be a budget proposal.
processing facilities. Typically, one or more bidders are
Based on this budget proposal and a first round of meetings,
invited to submit a bid, usually based on a simple tender
the owner or project developer calls for a final budget
specification stating the overall requirements of the supply.
proposal. Based on this, the preferred bidder can be selected,
Following an evaluation of the budgetary bids received,
and, during the final negotiations, detailed requirements are
all details must be discussed with the preferred bidder and
developed in the contract. This approach, however, is only
incorporated in the draft contract.
possible in non-public procurement.
When applying a private (non-public) procurement system, it

is still possible to use a similar approach with prequalification 7.5 CONTRACTS
and tendering based on a detailed tender specification. It is 7.5.1 WARRANTIES AND GUARANTEES
important that the tendering procedure be competitive and
It is of utmost importance to specify and agree upon the
transparent, also if not procured under public procurement.
performance of the biomass plant. Sufficient time must be
spent and the necessary technical expertise must be involved
The owner also may choose to enter an agreement with one
to define a solid contractual base, including general warranty,
selected contractor on an exclusive basis, which shall come into
performance guarantees, availability guarantee, etc.
force if the contractor meets the requirements and a target price
that is favorable to the financial model of the owner. The upside
Table 7–2 presents important figures to agree upon for an
for the owner is that the selected contractor is willing to take on
EPC/turnkey contract.
some of the costs for development of the biomass project, and
the time schedule is minimized as much as possible. However, Non-compliance with the guarantees is normally subject to
the owner reduces the influence on the quality of materials and payment of penalties or liquidated damages, which must be
components of the biomass plant, as the contractor requires stated in the contract.
more freedom during the subcontracting phase. This alternative
also lacks the competition among two or more bidders, giving If contracts involve, for example, a boiler or a turbine contract,
the lowest possible price. more detailed guarantees must be agreed, such as steam flow,
steam temperature, steam pressure, etc. Furthermore, it is
7.4.3 REQUEST FOR PROPOSAL
important to include an interface list, specifying all important
The Request for Proposal (RfP) is closely linked to the technical data within the supply limits between contracts on,
pre-feasibility and feasibility analyses in order to use the for example, the boiler or turbine, such as location, media,
appropriate information collected and agreed upon during design, and operational data.
these initial project stages.
7.5.2 ENVIRONMENTAL PERFORMANCE
The RfP can be structured in many ways that are highly Environmental performance data typically include:
dependent on the procurement strategy. Public procurement
usually requires more comprehensive and detailed • Emissions to air (for example, nitrogen oxides
specifications, whereas non-public procurement among a few or carbon dioxide)
invited bidders may use less-detailed specifications.
• Emissions to soil (for example, leakages or
landfilling of residues)
The RfP requirements can eventually be developed in detail
during the period from tendering until final contract. This • Emissions to water (for example, wastewater)
replaces a comprehensive RfP with a “light” version (maybe
• Noise (for example, from machinery).

Table 7-2: Warranties and Guarantees
Unit Remarks
General warranty years Typically, two years from takeover.
Availability % • Typically measured in the first two years of operation. A lower figure might be
agreed in the first year, since this is where operational problems are solved.
• Experienced contractors should comply with at least 92 percent availability,
allowing for both planned and unplanned outages.
Continuous operating time hours • Without stop for mechanical cleaning.
• Experienced contractors should comply with around 8,000 hours.
Gross electrical output MW
Net electrical output MW
Steam or heat export kg/s If applicable, steam parameters must be stated as well (temperature, pressure).
Consumption of various kg/s Lime, makeup water, lye, ammonia water/urea, etc.
consumables
Production of bottom ash kg/h May be difficult to specify, as it depends on the fuel and should only be implemented
if deemed necessary for the owner.
Production of fly ash kg/h May be difficult to specify, as it depends on the fuel and should only be implemented
if deemed necessary for the owner.
TOC (total organic carbon) % Unburned in the bottom ash. This figure shows whether the combustion process
is operating well.
Source: COWI.
These requirements are mandatory and are normally 7.5.3 TIME SCHEDULE AND MILESTONES
specified in the environmental permit, and they consequently
Although an EPC/turnkey contract places the entire
are not subject to discussion. Therefore, they are absolute
responsibility on the contractor, it is highly recommended to
and usually are not subject to liquidated damages, but if the
include a time schedule showing the important milestones of
environmental requirements are not met, handover to the
the project, such as start of erection, pressure test, start of hot
owner should not be accepted.
commissioning (first fire), first synchronization to electrical
grid, start of trial run, performance test, and handover.
Local/regional standards and guidelines on environmental
performance may apply, but a few international guidelines
To keep pressure on the contractor, these milestones might
should be mentioned. Key guidance documents include the
either be penalized or payments are subject to postponement
World Bank Group (2007) Environmental, Health, and Safety
if the milestones are not met. This will (partly) compensate
General Guidelines (3–50 MWth) and the World Bank Group
the owner from the delayed startup.
(2008) Environmental, Health, and Safety Guidelines for
Thermal Power Plants (>50 MWth). Further to this, the EU 7.5.4 COMMISSIONING
has formulated various directives (e. g., the Large Combustion
It is important to describe the intended commissioning
Directive) as well as BAT Reference Documents (BREFs) and
program, including the owner’s right to approve the project
BAT Conclusions (e. g., for Large Combustion Plants) that
moving to the next stage—for example, is the contractor
also may be relevant outside Europe (IPCC, 2015).
ready to commence trial run (trial operation)?
It also should be carefully considered if the plant should be

Details about commissioning can be found in Chapter 8.
designed/prepared for stricter environmental requirements
expected in the future. A later upgrade may be more
expensive and may require outage for a long period of time.

Case Story: Biomass Project for the Textile Industry in Honduras
PROJECT DESCRIPTION
Gildan is a leading Canadian multinational company that manufactures high-quality
basic clothing, with production facilities in the Dominican Republic and Honduras.
Its industrial activity requires a high saturated steam flow. This used to be produced
by heavy oil boilers, which drove the company to face high energy costs and resulted
in a larger carbon footprint.
In the Rio Nance plant in Honduras, Gildan produces 150 tons per hour of vapor using
six boilers of 25 tons per hour each.
APPLIED TECHNOLOGY
From 2009 to 2013, the company installed six steam boilers with 16 bar(g) design
pressure and a two-pass vertical economizer. Each boiler line is equipped with primary
and secondary combustion air systems for both combustion zones, respectively. The
system has a water-cooled moving step grate with a total area of 21.2 square meters,
which is divided into three sections.
For flue gas cleaning, each boiler system has a double multicyclone, with 72 cyclones
each made in a special execution with hatches for cleaning. A modulating control
system ensures that all parameters are automatically adjusted according to the current
load of the boiler and that the system therefore operates continuously in the range
of 40 to 100 percent.
PLANT PERFORMANCE
• Average biomass cost: $55 per ton Average LCV: 2.2 MWh per ton
• Price for biomass energy: $25 per MWh
• Average heavy oil cost (at the time of construction of the plant): $2.2 per gallon
• LCV for 1 gallon of heavy oil: 44 kWh per gallon
• Price for fossil energy: $50 per MWh
• Boiler efficiency: 87 percent.
FUEL TYPE AND HANDLING

A mixture of different types of biomass are used as fuel, including waste from the
plant’s own processes, African palm byproducts, king grass from energy crops, and
wood sawdust. The biomass composition for the project is: 40 percent empty fruit
bunches from African palm), 40 percent wood, and 20 percent king grass bagasse
(an energy crop).
A silo with a capacity of 3,000 cubic meters was built. Two semiautomatic cranes
collect biomass from the silo and deliver the biofuel to the boiler hoppers.
DEVELOPMENT / INVESTMENT COST

The total contract amount was €15 million, not including the civil works.
LESSONS LEARNED
Gildan saved considerable money from switching to biomass. In the period 2010–2013,
all of the steam produced by heavy oil combustion was replaced with “green” steam
produced by biomass combustion, allowing Gildan to greatly reduce its energy invoices
and to massively reduce its carbon footprint.
Source: LSolé s.a., 2016, www.lsole.com; Justsen Energiteknik A/S, 2016, www.justsen. dk.

Source: COWI.
90 Construction and Commissioning

CONSTRUCTION AND COMMISSIONING
8
8.1 CONSTRUCTION • Fly ash transport and storage
The split of responsibilities between the owner and the • Turbine/generator

contractor for the construction and commissioning phase is
• Condensate
dependent on the type of contract adopted for the biomass
plant (that is, multiple contracts, DB/EPC, DBO, or DBFO; • Makeup water
see Section 6.1). However, the tasks to be performed during • Chemical dosing
the construction and commissioning phase are the same
• Compressed air
regardless if they are done by the contractor or by the owner.
• Soot-blower system
The construction of a biomass plant is a complex process
• Control and instrumentation
that requires both extensive technical experience and
knowledge and considerable experience and knowledge in • Electricity and power distribution
planning and management. Successful construction of a
• Grid connection
biomass plant requires project management in accordance
with general construction project management best practice. • Connection to steam or district heating
• Workshop
A biomass plant is a complex construction, and for a typical
steam-based power plant, the following part systems should • Cooling
be considered: The most visible activity in the construction phase is the

actual construction of the biomass plant where all the
• Fuel reception station
mechanical, electrical, and control and instrumentation
• Fuel yard (C&I) components are being erected and installed. This is
normally the job of a turnkey EPC contractor, alternatively
• Fuel shredding
with a multiple contract approach employing two to four
• Fuel storage main contractors depending on the chosen contract strategy.
• Fuel transport
However, to make sure that this happens in the most
• Boiler feeding optimal way, the owner should be actively involved in
• Combustion the construction phase regardless of the contract strategy,

whether it is a full turnkey EPC contract or a multiple-
• Boiler
contract approach.
• Flue gas cleaning
Even smaller 1 to 5 MWe projects and biogas plants require
• Emission monitoring
a construction site organization to plan and coordinate the
• Chimney activities on-site on a daily basis.
• Bottom ash transport and storage

For an EPC contract, the contractor will coordinate and carry • Interdependencies among tasks
out many of the following disciplines. For a multiple-contract
• Person responsible for the task
project, the owner or the owner’s representative has to
coordinate the activities on site. For EPC projects, the owner • Project critical path
(or the owner’s representative) also should get involved in all • Actual progress against planned progress.
disciplines to closely monitor the progress of the work.
A planner should be dedicated to this task and should follow
The layout of the construction site should be planned at up on progress on a daily basis.
an early date before construction actually begins on-site.

The time schedule should be divided into groups of activities.
Often, the area available for staff facilities, a temporary
For a biomass plant, these include:
storage yard for materials, a pre-fabrication area, etc.,
will be limited, and thus the layout of the construction site
• Civil construction
must be planned well in advance. In addition, access to
bathroom, bathing, and catering facilities, and connection • Mechanical installations
to utilities (water, electricity, etc.) may be limited during • Fuel handling

the construction phase, and this must be taken into
• Boiler
consideration in the planning.
• Turbine
Planning and coordination during the construction phase
• Environmental plants
include the following disciplines:
• Balance of plant
• Scheduling
• Electrical installations
• Roles and responsibilities
• C&I installations.
• Risk, stakeholder, and quality management
Each task should be divided into detailed activities, making
• Environment, health, and safety management it possible to carefully plan and to follow up. Planning is
• Cost management. crucial in order to identify the influence that each activity
has on another and to identify which activities of the
8.1.1 SCHEDULING construction phase are critical. These activities should be
An overall time schedule with tasks, duration, milestones, given special attention, but if other activities are delayed, the
and interdependence among tasks is developed during critical path could change and thus require a shift in focus.
the design phase.

During the construction phase, changes and amendments
During the construction phase, this time schedule must be much to the time schedule are made, and new revisions of the
more detailed, down to a level where ongoing activities must be time schedule must be issued. It is crucial for a successful
identified each day. A comprehensive time schedule is crucial, construction phase that all involved parties receive any new
and it is highly recommended that professional software revision of the time schedule.
(Primavera, MS Project, or similar) is used for this task.

A simplified example of a construction phase time schedule
At a minimum, the schedule should include the is shown in Figure 8–1. In reality, a time schedule for a
following components: biomass construction project can contain maybe 2,000 or

3,000 lines with different activities.
• Tasks and duration with specified start and end dates
Compared to scheduling for conventional construction
• Milestones and key dates
projects, transportation, storage, and handling of biomass

Figure 8-1: Simplified Time Schedule for the Construction Phase of a Biomass Project
Source: COWI.
require special attention in the schedule. The facilities for The owner’s construction site organization should, at a
transportation, storage, and handling of biomass are more minimum, include:
complex than facilities for conventional fuels, and this must
be reflected in the schedule. • Construction site manager
• Environment, health, and safety manager

The construction of the other parts of a biomass plant is
similar to the construction activities in conventional power • Civil construction supervisor
plant projects. • Mechanical supervisor
In the time schedule, each task should be broken down into • Electrical supervisor
activities with short duration (a few days or a week). This • C&I supervisor
allows careful monitoring of the progress of the activity and
• Planner
permits prompt corrective actions to be taken.
• Quality manager
Milestones are incorporated in the contract, and they are
• Secretary and archiving.
connected to contractual obligations, advanced payments, or
penalties. Milestones should be monitored very carefully to The owner’s construction site organization refers to the
assure on-time completion. owner and should be independent of the contractors on
site. In addition, the contractor will have his or her own
8.1.2 ROLES AND RESPONSIBILITIES
construction site organization in place, and the two parties
A construction site organization should be in place should work together.
to plan and coordinate the activities on-site on a daily
basis during construction. The owner’s company is usually engaged in other types of
business, different from biomass plant construction and
For smaller projects or for projects with only one EPC operation, and the owner probably will not have qualified
contractor, several of the roles listed below may be carried personnel for this type of task in his or her organization.
by the same person, but all roles must be covered. Therefore, the owner should hire external experts independent
of the contractor to represent his or her interests.

The responsibility of the construction site organization includes: Special attention to the risks of fire, explosion, boiler quality
(welding, etc.), delays, and claim management are important
• Coordination of activities on-site items in the risk register during the construction phase.
• Ensuring that all activities are carried out in a safe way
The risks of fire and explosion are more serious for biomass
• Daily follow-up on the contractor’s installation plants than for conventional energy plants. Biomass dust is
regarding the technical disciplines: civil, mechanical, easier to ignite than coal dust, and the explosion coefficient
electrical, and C&I for biomass is much higher than for coal. The risks can
• Follow-up on the construction time schedule. be mitigated with careful design of the fuel handling and
transportation system and by specifying cleaning instructions
8.1.3 RISK, STAKEHOLDER, AND QUALITY in the operation instructions.
MANAGEMENT
A project risk register should list all risks associated with the As with conventional energy projects, is it important that
project, such as approvals from authorities, time schedule, quality management ensures that the boiler welding meets
costs, and quality. the relevant standards, and it is essential to carefully
follow up on quality reviews. In the contract with the
Each risk should be evaluated in terms of probability and contractors, the owner’s requirements for quality and quality
consequence. The probability and the consequence should each management should be specified.
be evaluated separately, for example with a score from one to
five. The two scores are multiplied, and the risks are ranked The requirements regarding quality should include:
according to this score, directing focus on the most severe risks.
• Contractor’s quality management system
The register should note the mitigation strategy to reduce each • Sub-suppliers’ quality management systems
risk, the deadline for mitigation, and who is responsible for
• Quality assurance
acting on the risk, as shown in Figure 8–2. The risk register
should be updated frequently, perhaps on a monthly basis. • Quality control
• Document requirements.
Stakeholder communication and management should be
performed right from the project start, but when the project The construction phase is always the most hectic phase of project
enters the construction phase, it becomes more visible and execution, with many activities taking place simultaneously and
may attract new stakeholders. It therefore is important to with many workers on-site. It therefore is important to handle
identify all potential stakeholders before construction begins the risks for delays and additional claims from the contractors in
and to develop a plan for interacting with each stakeholder a professional way. One way to do so is to acknowledge the risks
and updating them about project progress. and to describe how to mitigate them in the risk register.
Figure 8-2: Simplified Risk Register
Identification of Risk Risk Evaluation Risk Handling

ID No. Risk Potential ID Date Frequency Consequence Risk Mitigation Mitigation Responsible Last
Description Effect Level Method Status Party Updated
Source: COWI.

Risks associated with safety are described in Section 8.1.4. Environmental, Health, and Safety Guidelines for Thermal
Power Plants also will be relevant.
8.1.4 ENVIRONMENT, HEALTH, AND SAFETY
MANAGEMENT 8.1.5 COST MANAGEMENT
During the construction phase, environment, health, and The biomass plant generates no revenue until it is up and
safety (EHS) management should have the highest priority. running. During the construction phase, there are only payments
Construction sites in general are dangerous working places, to be made to the contractors and to the owners’ own personnel.
and this also is the case for biomass plant construction sites
(independent of size). Safety must come first in all decisions In the contracts with the contractors, a payment schedule is
at the construction site. an important element. Normally, the payments are divided
into a number of installments, often linked to measurable
The owner should specify in a document his or her milestones. It therefore is essential to closely follow up on
requirements for EHS together with the general site the progress of the construction site activities.
conditions. This document should be known and followed
by everybody engaged at the construction site. It also is important to manage carefully any extra work that
will appear during the construction phase. No matter how
A risk register with a focus on EHS issues should be created, carefully the planning has been done, it is normal that not all
similar to the project risk register described in Section 8.1.3. activities have been foreseen. Therefore, a contingency sum of
The EHS risk register should be updated regularly, at least 10 to 20 percent is often added to the budget. It is important,
on a weekly basis. however, to manage carefully this amount. The pressure on
the time schedule will be highest during the construction
All personnel with access to the construction site (including
phase, and therefore the tendency to accept extra costs will be
the owner, the contractor, and any subcontractor) should
open in order to keep up with the time schedule.
be instructed in safety issues specific for the actual site. This
information should, at a minimum, include: In brief, “extra work” is any activity not defined in the
contract, or any activity that is defined in the contract but
• Alarms
whose volume or size exceeds the originally planned activity.
• Meeting points One way to manage extras is that all extra work should be
agreed in writing before it is executed.
• Requirements for personnel protection.
The requirements for personnel protection should include 8.2 COMMISSIONING

demands for using safety helmets, safety shoes, etc., as well
When all equipment has been erected, the project goes from
as the standards for fall prevention, scaffolding, hoists, etc.
construction phase to commissioning phase. During the
As part of the EHS activities, a 15 to 30 minute toolbox commissioning phase, it is important to test all equipment in
meeting should be held every morning during the a systematic way.
construction phase. At the toolbox meeting, all parties

Before the commissioning can begin, certain documentation
involved at the site should go through the day’s activities on
requirements should be met in order to plan and conduct the
the site, with a focus on dangerous activities and on areas
commissioning in a systematic and safe way. This requires a
where multiple parties work at the same time.
well-prepared commissioning plan.
Local EHS directives should always be followed. In addition,

The commissioning phase should demonstrate that the
the recommendations in the IFC Environmental, Health,
installations erected during the construction phase are complete
and Safety General Guidelines should be observed, and, for
and comply with the requirements as specified in the contracts.
biomass plants, the majority of the good practice in the IFC

Source: COWI.
As for any other energy project, the commissioning phase the plant should be measured over a defined period, typically
for a biomass plant project includes a cold test, a hot test, a during the subsequent guarantee period.
functional test, a trial run, a performance test, and handing
over to the owner. In addition, it is also during the commissioning phase that the
operating staff should be trained, and the operators should
During the cold test, all signals—from the individual become confident with the equipment so that they are able to
components to the control system—are tested to ensure that run and maintain the plant during operation in the future.
they are connected correctly. During the hot test, the plant
actually starts to operate on the main fuel, and all controls The commissioning phase includes, at a minimum, the following:
and regulations are trimmed and optimized.
• Planning
When the cold and hot tests are finalized, the contractor • Roles and responsibilities
must demonstrate that the plant can operate and perform as
• Training
it was supposed to do. This is called the functional test.
• Cold testing
When the functional test is approved by the owner, the trial
• Hot testing
run can start. The purpose of the trial run is to demonstrate
that the plant can operate safely and reliably for an extended • Functional test and trial operation
period, for example 720 hours.
• Performance test and availability
After or during the trial run, the performance or demonstration • Handover documentation.
test can take place, and the performance and availability of

8.2.1 PLANNING • EHS manager
As in the construction phase, a well-planned, detailed time • Mechanical supervisor

schedule is important in the commissioning phase to identify
• Electrical supervisor
the activities for each day. A comprehensive time schedule
is crucial, and it is highly recommended that professional • C&I supervisor
software be used for this task. • Planner
A planner should be dedicated to this task and should follow • Quality manager
up on progress on a daily basis. • Secretary and archiving.
The time schedule should be divided into phases of cold testing, This commissioning organization should refer to the owner
hot testing, and performance testing and trial operation. and be independent from the contractors on-site.
Each task should be divided into detailed activities that makes If qualified people are not available within the owner’s
it possible to carefully plan and follow up on progress. organization, consultants independent of the contractor
should be hired to protect the interest of the owner. It is,
In the time schedule, each task should be broken down into however, important that the owner’s personnel get involved
activities with short duration (one to two days). This allows and participate in the operation of the biomass plant during
for careful monitoring of the progress of each activity and the commissioning phase, as they shall operate the plant
permits prompt corrective actions to be taken. after takeover.
A simplified example of a commissioning phase schedule is The responsibility of the commissioning organization includes:
shown in Figure 8–3.
• Coordination of activities on-site
8.2.2 ROLES AND RESPONSIBILITIES
• Ensuring that all testing is carried out in a safe way
During the commissioning phase, a commissioning site
• Daily follow-up on the contractor’s testing
organization should plan and coordinate the activities on-site
on a daily basis. • Follow-up on the commissioning time schedule.
For smaller projects, one person may carry out several of 8.2.3 TRAINING
the roles listed below, but the commissioning organization During the commissioning phase, the owner’s operation
should include, at a minimum: and maintenance personnel should become more and more
familiar with the plant and get increasingly involved in the
• Commissioning manager
operation of the plant.
Figure 8-3: Time Schedule for the Commissioning Phase
Source: COWI.

This should be done in two ways:
Table 8-1: Training Schedule: Phase One
Training during cold test and hot test

• Within the contractor’s scope of supply, the contractor
At a minimum, the theoretical part of the training
should arrange dedicated training sessions for all
should contain:
systems, both for the operational personnel and for the
• A study of the process flow diagram (PFD)
maintenance personnel. • A study of all pipe and instrumentation diagrams (PID)
• During commissioning testing, the owner’s operational • A study of the general layout of the plant
• A study of the functional descriptions of all systems,
personnel should work closely together with the including auxiliary systems
contractor’s testing personnel. • A study of all main equipment such as boiler, flue gas
treatment, fuel handling, air preheater, pumps, fans, valves, etc.
For a biomass plant, this could include training prior to cold • A study of operations and maintenance manuals, including
startup and shutdown
testing, during cold and hot testing, and during test operation.
• A study of safety procedures and plans
• Questions and discussions
The contractor should present a training plan to the owner
At a minimum, the practical part of the training should contain:
for approval, for example three months prior to the start of
• Identification of all main equipment
cold testing and covering all parts of the training program. • A practical study of all main equipment
• Participation in the commissioning if requested by the owner
Training sessions should be based on drawings and on • Special training on all main equipment from the equipment
operating and maintenance instructions delivered by the manufacturer
contractor, and the training should be arranged in such a • A study of the maintenance plan/schedule
• A study of the lubrication plan/schedule
way that during the training sessions each trainee will have
• A study of preventive maintenance procedures
to execute all actions related to the upcoming tasks.
• Questions and discussions
Training should cover the function of the actual machinery Source: COWI.
and the function of the control and instrumentation devices

related to the machinery. After the training program is
For a biogas plant, the staff that will operate the wastewater
complete, the operating personnel must possess all the
treatment plant should receive special training for this. As a
necessary skills for the complete and safe operation of the
minimum, the training should include maintenance and repair
plant under all conditions.
of equipment, service check for oil etc., safety during handling
TRAINING PRIOR TO COLD TESTING of biogas, firefighting, basic knowledge of the biological
processes in the anaerobic digester and in the aerobic process
If the future operation and maintenance personnel are
tank, optimization of the operation of the plant, and analyses
unfamiliar with the new biomass plant, training may be
of the quality of the wastewater discharged.
arranged at an existing reference plant elsewhere.
8.2.4 COLD TESTING
In addition, before the DCS factory acceptance test, the supplier
should provide training in the use of and programming of Cold testing is the phase where the contractor tests that
the DCS system, enabling the owners’ programmers to make all signals—from the individual components to the control
changes in the DCS program by themselves. system—are connected correctly.
In addition, training should be arranged during cold and Cold testing includes testing of all individual components (valves,
hot testing and during test operation, as shown in pumps, fans, motors, etc.) and of the individual systems.
Tables 8–1 and 8–2.

In the hot testing, the plant actually starts to operate on the
Table 8-2: Training Schedule: Phase Two
main fuel, and all controls and regulations are trimmed.
Training during test operation
At a minimum, the theoretical part of the training should
The hot commissioning should include complete:
contain:
• A study of all control-loop diagrams, control logic, control
sequences, etc. • Startup of all motors
• A study of Interlock diagrams
• Startup of all systems
• A study of alarm lists
• A study of safety procedures • Tuning of all parameters of control systems
• A study of normal operation procedures
• Operation of the plant until the test run
• A study of startup and shutdown procedures
• A study of normal operating parameters, set points • Participation in the performance test.
limitations, etc.
At a minimum, the practical part of the training should contain: The hot testing should be carried out by the owner’s
• A study and operation of the distributed control system personnel, but under the supervision and at the responsibility
(DCS) program covering all systems
of the contractor.
• Training in DCS operation (for example, making trend curves,
adjusting controller settings, printing, saving, etc.)
8.2.6 FUNCTIONAL TEST AND TRIAL RUN
• Participation in the commissioning if requested by the owner
• Startup, normal operation, and shutdown of all parts When the cold and hot tests are finalized, the contractor
of the plant
must demonstrate that the plant can operate and perform as
• Training in safety procedures
defined in the contract. This is called the functional testing.
• Troubleshooting
Source: COWI. During the functional (acceptance) test, the function of the
whole plant is tested in all operation modes: startup, stop,
The cold commissioning should include complete:
load variations, etc. The test should prove that all design
specifications are met.
• Cable check and test
• Signal test When the owner has approved the functional test, the trial run
can begin. The purpose of the trial run is to demonstrate that
• Instrument test
the plant can operate safely and reliably for an extended period.
• Motor test This period is normally 30 days, equivalent to 720 hours.
• Equipment test
During the trial run, the plant should be able to operate
• DCS test at any load specified by the owner. The test run should
• Test and adjustment of frequency converters, soft starters, demonstrate proper functionality and readiness for
circuit breakers, motor protection units, relays, etc. commercial operation of the entire plant.
It is the responsibility of the contractor to carry out the cold Minor adjustments and fine-tuning of components may be
testing, but it is useful for the owner’s staff to be involved in accepted during the trial run if they do not interfere with the
the testing and to carefully follow up on the testing in order operation of the plant.
to get to know the biomass plant as much as possible.
If the plant is not able to run at the specified load, the
8.2.5 HOT TESTING trial run must be cancelled. The contractor must make the
necessary repairs and adjustments, and the trial run must be
When the cold testing has been finished successfully, the hot
restarted and completely repeated.
testing can begin.

Source: COWI.
8.2.7 PERFORMANCE TEST AND AVAILABILITY The contract should specify the conditions under which the
performance test should take place. In reality, it usually is
During the trial run or within the guarantee period, the
not possible to achieve exactly the specified conditions. It
performance of the plant should be tested in a performance
therefore is important that the contract includes correction
test, which could be according to international standards.
curves for the variable conditions.
The performance test should prove that the performance

The guarantees for electrical output, steam/district heating
guarantees in the contract are met.
flow quality, and electricity consumption are usually
This typically will include: associated with penalties, while the guarantees for emissions
and noise are guarantees that should meet authority
• Electrical output / boiler efficiency regulations. If these guarantees are not met, the contractor
has to modify the installation until the required guaranteed
• Steam or district heating flow quality
values are met.
• Electricity in-house consumption
In addition to the guarantees listed above, availability should
• Startup times
be guaranteed in the contract. Availability is normally
• Load variation times determined over the guarantee period (typically two years or
• Emissions 15,000 hours of operation).
• Noise.

The availability A is defined as:
Tactual
A = ———————————
(Tt - Tp) x 100%
Where
Tactual = Actual number of hours per year in which
the equipment has been in operation
or has been ready for operation
Tt = 8,760 hours
Tp = Number of hours of planned outage per year
(normally one to three weeks)
For a biogas plant, performance tests should be made after

a month with stable operation. The specified guarantees
should be verified and documented. The tests should
be repeated after one year of operation and before the
guarantee expires.
8.2.8 HANDOVER DOCUMENTATION
The handover documentation consists of updated as-built

documentation including:
• Drawings
• Descriptions
• Operation and maintenance manual
• Certificates and declaration of conformity
• Shortage list.
All this documentation must be delivered before final

payments are made. It is important that the as-built
documentation is updated with any changes to the original
design that may have been implemented during the design,
construction, and commissioning phases.

Source: COWI.
102 Operation and Maintenance of Biomass Plants

OPERATION AND MAINTENANCE OF BIOMASS PLANTS
9
The profitable operating life of a biomass plant could be This chapter focuses on plants with steam boilers and steam
20 to 40 years depending on the fuel, operational profile turbines. However, most of the general considerations and
(number of starts, stops, and operating hours), and systematics for planning operation and maintenance also can
maintenance history. Major overhauls or rehabilitation of be applied to ORC and biogas plants. Section 9.4 describes
key systems and components may take place during the the special issues related to ORC and biogas.
operating period.
9.1 PLANT ORGANIZATION AND STAFFING
Operation and maintenance of a biomass plant is, in some
9.1.1 OPERATION
respects, more complex and requires a larger staff than
a conventional oil- or gas-fired plant, which may be the Plant operation includes a number of tasks and
alternative to a biomass plant. responsibilities, such as:
The low heating value and low bulk density of biomass • Scheduling of power and heat production and fuel supply
compared to fossil fuels require equipment for handling • Operating and monitoring all functions of the energy-
of large tonnages and storage space for volumes of fuel producing plant and equipment
feedstock. The fuel handling systems will be exposed to wear
• Operation of fuel reception and handling, including
and tear during normal operation, which requires regular
weight measuring and quality control (moisture content
maintenance. Some fuels, especially with high contents of
and presence of stones, metal pieces, and oversize
alkaline and chloride, also may cause corrosion problems
particles or elements)
in the fuel handling systems and in the boiler and the ash
handling systems. The use of high-pressure steam boiler, • Operation and handling of systems for bottom ash, fly
turbine/generator, and flue gas cleaning equipment calls for ash, and other byproducts
easy access to specialized technical competence, either within
• Supervising plant operation, including scheduled “walk
the operational staff or available at short notice.
through” on each shift
The development and construction of a biomass plant is a • Planning and ordering of necessary maintenance work
large investment. Therefore, maintaining a high efficiency and securing plant before start of work.
is key to securing the optimum benefits of the investment.
Likewise, a high availability and reliable production of The project development phase will show whether
electricity and heat (for CHP plants) is crucial for the cooperating with a host or nearby industrial complex is
economic outcome of the plant. Finally, compliance with feasible. A biomass plant can, to some extent, be designed
environmental and other authority requirements is necessary for monitoring and control of operation from a remote
to match the license to operate. All of these concerns call for control facility, for example during nights and weekends.
a strong focus on operation and maintenance in all planning The plant can be designed to go into a safe mode/condition if
and operational phases. a critical alarm occurs, but it will normally require presence
of operating staff during startup. Critical delivery of process

Source: http://jfe-project.blogspot.dk/.
steam or heat to an industry should be taken into account • Plant design

when contemplating unmanned operation.
• Degree of plant automation
An option may be to contract all or part of the operation • The need for a 24/7 presence of a dedicated shift staff
and maintenance work to a specialized O&M service versus the possible cooperation or integration with
company or to the EPC contractor. O&M contracts are other industrial operations
typically made for a five-to-seven-year period.
• The operation and maintenance strategy; on the one
extreme, the owner does everything; on the other
Section 12.3.1 presents generic cost estimates for operation
extreme, substantial work (both for scheduled and
of a biomass plant.
unscheduled outages) is outsourced.
9.1.2 STAFF
The staff should have the necessary skills and education. It
The typical operation and maintenance staff at a plant may will be beneficial if the future plant staff can participate in
vary in size from 3 to 5 people for a 1 to 5 MWe plant to up plant construction, commissioning, and testing. This will
to 20 to 40 people for a 20 to 40 MWe plant. The size of the generate a good knowledge and understanding of the plant
on-site operation and maintenance staff and organization before the start of commercial operation.
will depend largely on:
9.2 MAINTENANCE PLANNING
• Plant size
Various methodologies can be applied for maintenance planning.
• Fuel type The following outlines the most commonly used approaches.

9.2.1 SCHEDULED (PREVENTIVE) MAINTENANCE 9.2.2 RELIABILITY CENTERED MAINTENANCE (RCM)
Preventive maintenance aims to achieve fewer and shorter RCM aims at providing appropriate and just-in-time
outages by following routine procedures on a regular maintenance to prevent forced outages and avoid
schedule based on elapsed time or metering. unnecessary maintenance.
The major advantage of scheduled maintenance is that it facilitates The analysis and planning of a RCM system can be time
budgeting, prevents major problems, and reduces forced outages. consuming and may require additional monitoring. An
The downside is that strict reliance on scheduled maintenance analysis will identify the systems and equipment that are
can be time consuming and expensive if maintenance is most critical for plant availability and reliability, and these
performed without regard to the actual equipment condition. should deserve priority attention/focus.
Suppliers’ maintenance manuals and recommendations Table 9–1 below provides examples of operation and
should be the starting point for planning preventive maintenance activities.
maintenance schedules and procedures.
Table 9-1: Examples of Operation and Maintenance Activities

Main Plant Item Systems/Types Activity Typical Planning Method
Fuel storage and Front loaders, trucks Fueling When needed
handling
Change of lubrication oil Scheduled
Change of tires Condition based
Cranes, conveyors Change of lubricating wires, belts Scheduled
Change of rollers, bearings Condition based, scheduled testing
Boiler Firing system/burners, ash Change of wear parts for grate, burners, Condition based, scheduled testing
systems air nozzles, refractory, ash handling
Flue gas cleaning Bag house, scrubbers, Change of / supplying of chemicals When needed/scheduled
removal of nitrogen oxides
Change of filters Condition based, scheduled testing
Servicing of pumps, valves Condition based, scheduled testing
Turbine Lubrication and hydraulic Annual maintenance Scheduled
system components
Minor overhaul Condition based on recommendation
Major overhaul Condition based on recommendation
Electrical Basic electrical components Change of cables, fuses When needed
systems
Overhaul of generator Condition based on recommendation
Overhaul of transformers Condition based on recommendation
Change of motors Condition based
Controls and Standard instrumentation Calibration of thermocouples, Scheduled
instrumentation pressure gauges
Change of instruments Condition based
Balance of plant Piping and auxiliary system Supplying of chemicals When needed or scheduled
(BOP) components
Change of filters Condition based, scheduled testing
Servicing of pumps, valves Condition based, scheduled testing
Buildings Standard building materials Painting, repair of roofs and walls Condition based
Source: COWI.

9.2.3 CONDITION-BASED MAINTENANCE 9.2.4 COMBINATION OF MAINTENANCE PLANNING
METHODS
Condition-based maintenance also aims to provide
appropriate and just-in-time maintenance to prevent In most cases, the practical approach preferred is a
forced outages and avoid unnecessary maintenance. combination of condition-based, reliability-centered, and
Various methods are available for assessment of equipment preventive maintenance. The maintenance history and
conditions, including the following: as-found equipment condition should be documented and
readily available.
• Monitoring and recording process and equipment
parameters such as temperatures, pressures, flows, electrical The combination of this information with regular condition
currents, online analysis of flue gas, vibrations, etc. measurements will form the basis for failure analyses and
a decision to shorten or lengthen the equipment suppliers’
• Scheduled chemical analysis of, for example, fuel, ash,
recommendations.
water and steam, lubrication oils, and transformer oils
9.2.5 PERFORMANCE MONITORING, EVALUATION,
• Scheduled tests supplemented by sporadic tests when
AND OPTIMIZATION
problems are suspected of, for example, control valves,
The value of fuels and the sales price for electric power
safety valves, other control and protection equipment
and heat produced (for CHP plants) represent the major
• Scheduled specialized tests supplemented by sporadic economic elements during the operational life of a plant.
tests when problems are suspected, using, for example, It therefore is very important to maintain the expected
ultrasound (pipe wall thickness), infrared scanning, efficiency and capacity of the plant. Performance monitoring
vibrations analysis, noise analysis, etc. covers various activities and procedures to achieve this goal.
The authority permit or license may require the periodic
A record of operation and availability during the first two
performance of some of these tests. Table 9–2 below
years of operation will typically be the basis for approval of
provides examples of consumables and wear parts for a
supplier guaranties.
steam technology plant.
Table 9-2: Examples of Consumables and Wear Parts for a Steam Technology Plant
Main Plant Item Systems/Types Examples
Fuel storage and handling Front loaders, trucks Fuel, lubrication oil, tires
Cranes, conveyors Lubricants, wires, chains, belts, rollers, bearings
Boiler Firing system/burners, ash systems Wear parts for grate, burners, air nozzles,
refractory, ash handling
Flue gas cleaning Bag house, scrubbers, removal of nitrogen oxides Chemicals, filters, gaskets, valves
Turbine Lubrication and hydraulic system components Lubrication oil, hydraulic liquid, filters,
gaskets, valves
Electrical systems Basic electrical components Cables, switches, fuses
Generator brushes, gaskets
Controls and instrumentation Standard instrumentation Temperature transmitters, pressure transmitters,
cables, connectors
Balance of plant (BOP) Piping and auxiliary system components Chemicals, filters, gaskets, valves
Buildings Standard building materials Roof and wall elements, paint
Source: COWI.

It is recommended that an annual efficiency test of the plant optimal spare parts inventory will minimize costs and maximize
be performed. The plant should operate as close as possible availability, and will reduce unplanned forced outages.
to one or more predefined operating points during the test,
which will normally last one day. These tests often are also A start supply of spare parts typically will be provided by
the basis for process guarantees from suppliers. the DB/EPC contractor or by the individual suppliers as part
of the investment contracts.
The test results compare the actual plant performance to
design specifications and guarantees. Process calculation As a rule, consumables and frequently replaced parts should
tools can be used to adapt the test results to actual test either be in stock or available on short notice from local
conditions such as ambient temperature. suppliers. Using standard and locally available components
can reduce the capital bound in spares stock. A selected
For larger plants, online systems are often installed for number of critical strategic parts with long delivery time
continuous performance monitoring. (such as the impeller for a pump) should be ordered together
with the plant. The extent of this depends on the technology
9.2.6 DOCUMENTATION AND OPERATIONS AND
applied and on the local market conditions.
MAINTENANCE MANUALS
Comprehensive and well-structured documentation and Installation of excess capacity for critical equipment or
O&M manuals are essential for reliable and efficient functions should be considered during the design of a plant.
operation and maintenance. The tender specification should As an example, the installation of 3 x 50 percent pump
define the structure, quality, timing, and extent of the capacity may be considered as an alternative to 1 x 100
equipment suppliers’ documentation. percent or 2 x 50 percent. A further option could be to have
a complete spare unit (for example, a complete pump unit)
Documentation should include: in stock, enabling a quick change to recover full operational
capacity (see Table 9–3).
• General description of plant and functional description
of individual systems Costs for spare parts will be very dependent on the plant
• Drawings of layout and diagrams with a clear tag type and geographical location. Costs of consumables and
number system for systems and components wear parts are included in the estimates for operation and
maintenance (OPEX) costs shown in Section 12.3.1. Costs
• Operation manuals for each system
of initial supply of strategic spare parts should be considered
• Detailed description of all major equipment and part of CAPEX, whereas replacement of used spare parts
components with precise and understandable is considered part of OPEX. For some parts, it can be an
maintenance manuals option to refurbish used parts and to keep these in stock for
future maintenance work.
• Performance data and technical guarantees with
correction curves for variations in preconditions, such as
ambient temperature.
Clear procedure instructions from plant management to

operators and maintenance staff are essential for a safe
working environment.
9.2.7 SPARE PARTS
Efficient operation and maintenance also must include an

efficient system for managing spare parts. It should be in line
with the overall maintenance strategy and system selected. An

Table 9-3: Examples of Strategic Spare Parts for a Steam Technology Plant
Main Plant Item Strategic Spare Parts, Examples
Fuel storage and handling Crane grab, cable wires, bearings
Conveyor belts, rollers, chains
Boiler Special components for grate, burners, air nozzles, refractory, fans, compensators and valves
Small stock of pipes for evaporator and superheaters
Flue gas cleaning Special components for reactors, pumps, piping, filter elements
Turbine Valve seats, spindles, bushings, gaskets

Bearing components or complete
Coupling components or complete
Electrical systems Special components for transformers, switchgear, generator
Controls and instrumentation Input/output and interface modules, CPUs, server hard discs, special instrumentation
Balance of plant (BOP) Special components for heat exchangers, pumps, valves
Buildings Special building components
Source: COWI.
9.3 TYPICAL MAINTENANCE FOR THE MAIN 9.3.1 HANDLING AND STORAGE OF FUEL, FLY ASH,
SYSTEMS AND COMPONENTS AND BOTTOM ASH
Table 9–4 describes some typical maintenance issues for a The handling systems for fuels, fly ash, bottom ash, and other
steam-producing power plant. residues and byproducts include cranes, conveyors, bulldozers,
silos, etc. These systems and equipment will be exposed to
wear and tear during normal operation, and require regular
maintenance such as lubrication and replacement of wear
parts. Corrosion also can give rise to problems, especially if
Table 9-4: Typical Maintenance Issues for a Steam Technology Plant

Main Plant Item Typical Maintenance Issues
Fuel storage and handling Wear parts to be serviced and exchanged
Corrosion issues possible
Boiler Cleaning of heat transfer surfaces
High and low temperature corrosion
Flue gas cleaning Maintenance of exchange of filter elements
Monitoring and service of systems for removal of nitrogen oxides
Turbine Maintenance of stop and control valves
Cleaning of condenser
Minor and major overhauls
Electrical systems Testing and service of generator
Scheduled testing of transformers and switchgear
Controls and instrumentation Calibration of instrumentation
Testing of DCS system and special instrumentation
Balance of plant (BOP) Service of critical auxiliary systems
Source: COWI.

the choice of materials and/or corrosion protection has not of times during the normal lifetime of a plant. Pressure
been considered from the start. drop and particle concentration in the flue gas should be
monitored and recorded in order to optimize operation
9.3.2 BOILER
and planning of maintenance. The time between changes
Cleaning of heat transfer surfaces for deposits of ash and of filter bags will depend strongly on the design, the ash
slag is a normal part of the daily operation and maintenance. composition, and operational factors.
Boilers are often equipped with soot blowers that can be
operated online. However, depending on the fuel composition For plants with either selective or non-selective catalytic
and the boiler design, it may be necessary to perform reduction systems for the removal of nitrogen oxides, it is
additional cleaning when the boiler is out of operation. very important to monitor emissions and the consumption
of ammonia, urea, or similar substances. A change in
Fuels with a high alkaline content in the ash (such as straw) temperature or injection profile can lead to increased
are prone to creating slag deposits in the boiler furnace. emissions and in the slippage to the ambient environment
Alkaline and chlorine may cause high-temperature corrosion of media for nitrogen oxide removal. For selective catalytic
in the furnace and in superheaters and low-temperature reduction units, the catalyst must be partly or completely
corrosion in the cold end of the boiler. replaced after some years, depending on the ash composition
and operating conditions.
Planning of eventual renewal of, for example, superheaters
should be included in the design and layout of the boiler. 9.3.4 TURBINE INCLUDING CONDENSER/COOLING
SYSTEM
Inspection and servicing of the main mechanical equipment The two most common causes for reduced turbine efficiency
and auxiliary equipment such as grates, fans, and pumps are and capacity are fouling of heat transfer surfaces in condensers
normally included in scheduled maintenance programs. and air ingress through leaks in components operating
below atmospheric pressure. Monitoring the performance of
Over the years, corrosion and erosion may reduce the wall
condenser systems therefore is very important in order to take
thickness of boiler tubes to a point where boiler leaks occur
necessary action in time. Actual maintenance and repairs will
frequently. If this happens, an analysis may indicate if ad hoc
differ with the type of condensers: water cooled, cooling tower,
repairs are sufficient or if parts of the boiler should be replaced.
or direct/indirect air cooled.
High-temperature parts of the boiler operating above

Scheduled (for example, annual) maintenance of the turbine
approximately 400°C will undergo material changes due to
includes inspection and possible repair of the turbine
creep. Boilers are normally designed for 200,000 hours of
auxiliary systems, including lubrication oil and hydraulic
operation. When approximately half of the design lifetime
control system. Special attention should focus on the key
is used, a systematic inspection of material condition should
components of the turbine control and safety system, stop
be initiated. This is particularly the case for thick wall
and control valves, overspeed protection, etc. Endoscopic
components, steam drums, and live steam pipelines.
inspection for cracks, fouling, and erosion also can be
9.3.3 FLUE GAS CLEANING included, supplemented by visual inspection where possible.
Depending on emission requirements, flue gas cleaning may Most original equipment manufacturers (OEMs) recommend
comprise filters, scrubbers, and possibly systems for the “minor overhauls” to be performed every 25,000 operating
removal of nitrogen oxides. hours or three to four years (whatever comes first). Some
suppliers calculate equivalent operating hours taking into
Filters such as electrostatic precipitators and bag houses
account the number of start/stops and trips. A “minor
must be cleaned regularly using online systems as part of
overhaul” normally includes opening and inspection of
normal operation. Filter bags must be renewed a number

bearings and turbine valves in addition to the service TRANSFORMERS
prescribed under the annual maintenance.
Scheduled tests and maintenance of dry and oil transformers
include cleaning of transformers and their surroundings, test
A “major overhaul” is often recommended every 50,000
of instrumentation, and protection relay. The maintenance
hours or six to eight years (whatever comes first). A major
plan should follow the supplier’s instructions, including
overhaul includes opening of the turbine housing and removal
auxiliary equipment for the transformer (for example, the
of all inner components for cleaning, inspection, and repair
cooling system).
of possible damages. The scope also includes the services
under the minor overhaul. Seals and wear parts are inspected
It is recommended that scheduled oil and gas analyses be
and refurbished or renewed if necessary. Finally, clutches and
performed during the lifetime of the transformers. Records
alignment will be checked before commissioning.
of the analysis should be kept. Changes in analyses will
9.3.5 ELECTRICAL SYSTEMS provide an indication of upcoming failure.
GENERATOR
As a supplement, further measurements may be carried
In the range of 2 MW to 40 MW of electrical power, the out, such as frequency response analysis (FRA). FRA is an
turbine generators for a typical biomass plant are dominated effective method of evaluating the mechanical integrity of the
by air-cooled three-phase synchronous generators with core, winding, and fixings in the transformers. FRA may be
brushless excitation systems. The cooling can be either direct carried out on both oil and dry transformers.
air cooling (DAC) or totally enclosed water to air cooling
(TEWAC). Between the steam turbine (high-speed side) and Generally, the supplier’s assessment of the transformers
the generator (low-speed side), a reduction gearbox matches should be invited when progressed aging causes increased
the speeds. failure rates during the operation and maintenance period.
SWITCHGEAR
Scheduled overhauls recommended by OEMs generally
require an annual visual inspection of the generator interior Operation and maintenance of the switchgear should follow
and exterior. Endoscopes are useful for visual inspections the supplier’s recommendations. The supplier will normally
inside the generator, requiring only covers to be removed. have a test-and-service program for both the mechanical and
electrical components of the supplier’s equipment.
Minor overhauls and major overhauls typically are
performed every 25,000 and 50,000 operating hours, 9.4.6 CONTROL AND INSTRUMENTATION (PLANT
CONTROL SYSTEM)
respectively, for the turbine. A minor overhaul typically
includes opening and inspection of, for example, bearings, The control and instrumentation (C&I) system consists
excitation systems, coolers, and gearbox. of all of the plant’s instrumentation plus the distributed
control system (DCS). The instrumentation includes the
A major overhaul includes removal of the generator rotor. measurements of temperatures, pressures, flows, positions,
When the generator rotor is removed, access is given for a etc. More specialized measurements such as flue gas
thorough inspection and testing of the stator and rotor. The analyzers also may be included.
focus areas are windings and iron cores.
The DCS includes input and output modules and communication
Even though the generators are maintained according to modules. These provide the necessary interface between the
the OEM recommendations, experience shows that in order DCS and field instrumentation and devices, central processing
to reduce unplanned outages, it is important to carry out unit (CPU) modules, communication network, servers and
systematic condition-based maintenance. Modern online workstations, and human machine interface (HMI) with
monitoring systems are recommended for this.

monitors and keyboards in the central control room, and 9.4 ORGANIC RANKINE CYCLE (ORC) AND
possibly at other locations. BIOGAS PLANTS
This chapter focuses on plants with steam boilers and steam

Instrumentation should be checked and calibrated as part of
turbines. However, most of the general considerations and
a scheduled routine, describing time intervals and procedures
systematics for planning operation and maintenance also can
for each measurement. The basic routines normally will be
be applied to ORC and biogas plants. This section describes
performed by on-site personnel or contractors available on
the special issues related to ORC and biogas.
short notice. Special instrumentation may require the
call-in of specialists. 9.4.1 ORC PLANT
A biomass-based ORC plant will consist of a biomass-fired

The DCS system may include continuous monitoring of
boiler delivering heat to the ORC unit via a thermal oil
system components and provide diagnostic views that help
circuit. It thus includes the same main systems as a steam-
preventive maintenance. However, the DCS should be subject
based plant, for example biomass fuel handling and storage,
to a scheduled (for example, annual) inspection to check
a boiler with furnace, a flue gas system with cleaning and
CPU and bus-load, capacity of data storage media, and
stack, ash handling, etc.
components with limited lifetime, etc.
Operation and maintenance of a biomass ORC plant

Functional safety systems, which are part of the plant
therefore will include the same basic operations and
protection, should be maintained and tested in accordance
activities as described above for a steam plant. However, the
with relevant standards and authority requirements.
types of boilers are smaller and more simple than a typical
The basic instrumentation often will have a technical life steam boiler, and ORC plants also are designed for much
similar to the main process and mechanical equipment. lower pressures and temperatures than steam plants and are
However, parts of the DCS system may have a shorter usually built with a high degree of automation.
practical life due to changes in technology and availability of
ORC plants often are designed and built in prefabricated
spare parts. Exchange of HMI systems may be expected after
modules, which require less assembly work on site compared
10 to 15 years, and renewal of the automation level of DCS
to steam plants.
(input and output modules, communication modules, CPU
modules, etc.) after 15 to 20 years.
This generally reduces the necessary human power for
9.3.7 BALANCE OF PLANT (BOP) operation and maintenance. Often, the maintenance of the
fuel and boiler-related systems can be performed by staff or
Balance of plant consists of a number of supporting auxiliary
contractors available locally.
systems, for example cooling water, water supply and
makeup, water conditioning, compressed air, firefighting However, maintenance of the core ORC unit, its
systems, etc. These systems may be considered as secondary, components, and the handling of the working fluid will
but some are highly critical for operation, safety, and plant require expert skills and special spare parts that are
availability. Therefore, an analysis of each system should be often available only from the OEM. It therefore can be
made in order to decide an appropriate maintenance strategy. advantageous to have a contractual agreement with the
OEM supplier for some years.
Depending on potential integration and cooperation with
a nearby industrial installation, the plant also may include 9.4.2 BIOGAS PLANT
facilities for administration offices and staff facilities.
The investment in a biogas plant is rather high, so yearly
depreciation is high. In addition, there are many types of
operation costs such as biomass transport and pretreatment,

process heat, cost of chemicals, and costs of cleaning the gas Most biogas plants operate fully automatically, and several
for, for example, sulfur. safety devices are installed to avoid explosions and accidents.
However, there is still a need for people to observe the
The only revenue is from the sale of biogas (or produced processes and to ensure that all process units are operating.
electricity and heat). The sales price depends on the market
price for natural gas, and it therefore is essential to operate The digester does not require any manual labor for its operation.
the plant optimally to obtain the maximum biogas output Biomass is mixed in the storage tanks and is automatically
from the biomass. pumped into the digester. Following gasification, the biomass
residues are automatically emptied from the digester, and the gas
A biogas plant depends on a stable and sufficient supply is collected in the top of the digesters.
of biomass of a quality that will enable optimal production
of biogas. MAINTENANCE
The biomass used may contain sand and other solid

The feedstock for a biogas plant consists mainly of manure,
particles, which will influence the operation of pumps, pipes,
plant material, and industrial residues mixed with water into
mixers, valves, tanks, heat exchangers, etc. Pumps and
a slurry that can be transported by heavy-duty pumps and
mixers require frequent maintenance since the equipment is
metered into the digester. This slurry is very different from
subject to wear.
the solid fuels normally used in boilers.
It is normal to have a strategic stock of the most used spare

It often will be necessary to supplement the biomass with some
parts for pumps, etc., at the plant.
slaughterhouse offal in order to keep the gasification process
going, when the quality of the biomass feedstock is poor. Normally, it is possible for the staff on-site to replace
damaged parts in pumps and to perform daily maintenance.
OPERATION
In case of major repairs, experts will be required, or the
The operation of a biogas plant comprises the following equipment must be shipped to specialized workshops.
tasks needed for safe and optimal production of biogas:
On-site staff will be able to perform routine cleaning,
• Receiving biomass and storing it in storage tanks maintenance, and calibration of standard measuring sensors
• Mixing the different kinds of biomass to extract the and equipment. However, some flow meters can be critical
maximum energy from the biomass and so-specialized that expert companies are needed for their
calibration and maintenance.
• Pretreating the biomass to optimize the gas production
• Testing the suppliers’ biomass samples for gas potential The gas engine generator converting the biogas to electricity
and dry solid content in order to control contractual issues and heat normally will be a more or less standard unit, not
very different from other stationary internal combustion
• Cleaning the areas where spills may occur
engines. Based on some basic training and OEM-supplied
• Routinely checking and calibrating the sensors manuals and schedules, the on-site staff will be able to
perform routine monitoring and maintenance work, such as
• Inspecting the top of the digester daily
control and change of lubrication oil, control, and simple
• Investigating potential access to new types or suppliers maintenance of cooling water circuit, etc. Larger overhauls
of biomass. and complicated repairs normally should be contracted to
The plant management should update or prepare new specialized companies.
contracts with biomass suppliers.

STAFF
The staff at a biogas plant is limited to three to six persons,

depending on the plant size. Since operation is fully
automatic, the plant is only manned between 6 a.m. and 6
p.m. On weekends, there is normally no staff, but the alarm
system will call for support if there is a breakdown or other
irregularities at the biogas plant.
The staff consist of a plant manager and operators. At

large biogas plants, a process specialist may be employed to
supervise the mixing of biomass types, optimization of the
operation, etc.
OPERATION AND MAINTENANCE MANUALS
Each plant should have a set of operation and maintenance

manuals. These are the basis for maintenance of the plant
since they include information on each component at the
plant, such as the pumping capacity, power demand, when
oil shall be changed, which type of oil is needed, etc.

Source: COWI.
114 Regulatory Framework

REGULATORY FRAMEWORK
10
Energy generation from on-site available biomass residues RENEWABLE ENERGY TARGETS
can be cost competitive with fossil fuels today. However, if
Most countries have established an official commitment or goal
the biomass resource needs to be purchased and transported
to achieve a certain amount of renewable energy by a future
to the production site, the cost difference between biomass
date. These targets often define a certain share of renewable
and fossil fuels may be too big to allow for cost-competitive
energy in total energy supply (for example, 20 percent
bioenergy generation. Many countries therefore are adopting
renewable energy by 2020 in Australia and the European
a favorable policy framework to promote the sustainable use
Union), rather than referring to specific technologies.
of bioenergy for heat and power generation.
RENEWABLE ENERGY MANDATES/OBLIGATIONS
This chapter outlines and exemplifies how sector-specific
Some countries have requirements for consumers, suppliers,
regulatory frameworks may affect biomass-to-energy projects.
or generators to meet a minimum target for renewable
energy in their energy mix (such as a percentage of total
10.1 PROMOTION OF RENEWABLE ENERGY
energy consumption). Mandates can, for example, be in the
The most-used policies to promote renewable energy include:7 form of obligations that require the installation of renewable
energy production capacity, renewable energy purchase
ABOLITION OF FOSSIL FUEL SUBSIDIES
requirements, or requirements for blending specified shares
Fossil fuel subsidies, which in many cases encourage a wasteful of biofuels (biodiesel or bioethanol) into transport fuel.
use of energy, are being scaled back in many countries. Many
countries (such as Ghana, Indonesia, Mexico and Egypt) FEED-IN POLICIES
have abolished or reduced fossil fuel subsidies over the last Feed-in policies typically guarantee renewable generators a
decade, whereas a number of mainly energy-producing specified price per kilowatt-hour of electricity/heat that is fed
countries retain national fossil fuel subsidies. The abolition into the grid over a fixed period. The price level may depend
of subsidized fossil fuel-based energy for industry contributes on the specific technology and size of the conversion plants.
positively to biomass project viability. The feed-in policies may structure the payment as a guaranteed
minimum price (a feed-in tariff) or as a payment on top of the
INTRODUCTION OF CARBON PRICING
market-based wholesale electricity price (a feed-in premium).
One way to level the playing field for biomass-based energy The feed-in policies are often combined with regulations by
is to price the environmental impacts of fossil fuel through which renewable energy generators are ensured priority rights
the introduction of a price for carbon dioxide emissions. to interconnect and sell power to the grid.
This may be through a carbon tax (such as those introduced
in Australia, China, Denmark, Finland, India, Mexico, South RENEWABLE ENERGY CERTIFICATES
Africa, and Sweden) or through an emission trading scheme A renewable energy certificate is awarded to certify the
(such as those in California, China, the European Union, generation of one unit of renewable energy (typically 1
India, New Zealand, and the Republic of Korea). MWh of electricity but also, less commonly, of heat). The
certificates then can be traded on a separate market and
7 For further information, see: IEA, 2011a; IEA,2012; IEA, sold to industries or large consumers or retailers that need
2011b.

to meet their own renewable energy obligations. They also of net metering (where on-site generators typically receive
may be sold to consumers who desire to purchase renewable credit at the level of the retail electricity price) or net billing
energy voluntarily. (where they typically receive credit for excess power at a rate
that is lower than the retail electricity price).
RENEWABLE ENERGY TENDERS
FLEXIBILITY PREMIUM
Some countries conduct competitive tenders or auctions
for renewable energy capacity, in which project developers Bioenergy can play a role in balancing a rising share of
propose establishing a certain energy capacity based on a variable renewable electricity within a grid system such as
specified renewable energy source at a certain price. Bids wind and solar energy. Some large-scale biomass plants
may be evaluated on both lowest price and non-price factors, are able to react to predictable demand changes and thus
and the tenders typically are combined with long-term power provide very important flexibility to the power system. This
purchase agreements. is the case for biogas and bio-methane that are converted in
open-cycle gas plants. They can respond quickly to short-
TAX INCENTIVES OR CREDITS
term demand peaks in the power system. However, for solid
Tax incentives for renewable energy are fiscal incentives biomass plants, corrosion and fouling caused by ramping
that improve the viability of a renewable energy generation production up and down will imply additional investments
project through reduction on the tax obligation of the or higher operation and maintenance costs. For such biomass
project developer, investor, or owner. This may be in the plants to be available as a dispatchable, flexible electricity
form of a production tax credit (where the investor or source, these additional costs will need to be compensated
owner of a qualifying renewable energy production facility through a flexibility premium (such as that applied under the
receives a tax credit based on the amount of renewable German Renewable Energy Sources Act).
energy generated by the facility) or an investment tax credit
SUPPORT FOR BIOMASS SUPPLY CHAIN DEVELOPMENT
(which allows investments in renewable energy to be fully or
partially credited in the tax accounts). In addition to policy measures addressing the generation part
of the supply chain, some countries are addressing upstream
INVESTMENT GRANTS
investments in feedstock cultivation and biomass refining
Investment grants are financial support mechanisms through the integration of bioenergy and biofuel projects in
whereby governments provide direct assistance to reduce their agricultural and rural development strategies. This can
the investment costs associated with a specific project. increase the potential for symbioses between investments
The support can be in the form of grants or loans to aid in bioenergy and those in agricultural production and can
the development or deployment of renewable energy enhance the overall benefits for rural economies.
technologies. These mechanisms are particularly valuable
for projects that are perceived to have considerable 10.2 SALE OF ENERGY TO THE GRID
investment risks (for example, because they are the first of
To enhance the use of bioenergy, the available supporting
their kind in the country).
policy measures may need to offset the cost difference
NET METERING / NET BILLING between conventional coal and biomass and to encourage
investments in refurbishing of existing assets and
Companies with on-site electricity generation may have
dedicated biomass plants. This is often done through some
periods of excess generation that is sold to the grid and
combination of feed-in tariffs, renewable energy certificates,
periods where they are dependent on purchasing energy
and renewable energy tenders (Box 10-1).
from the grid. In such cases, a regulated arrangement will be
useful in which they can receive credits for excess generation The specific regulatory framework (for renewable energy in
to be offset against their consumption at other times. general and for biomass-to-energy in particular) that is in place
Depending on the individual country, this may be in the form in the country and sometimes region where a project is located

Box 10-1: Calculating Biomass-to-Energy Versus Existing Use of Coal
Before investing in the retrofitting of a coal power plant to accommodate co-firing with biomass, it is essential to clarify the
financial viability of such an investment. The following calculations provide an indicative estimate of the costs per MWh
related to co-firing compared to business as usual. It becomes clear that the investment is financially viable only if there are
financial incentives such as a carbon dioxide tax and clean energy certificates (CEC).
The business-as-usual scenario is electricity generation based on coal firing. This scenario applies no additional CAPEX or OPEX,
and thus the price per MWh consists only of the costs of coal and the related tax on carbon dioxide emissions for comparison
purposes.
The scenario of co-firing with biomass adds a few elements to the equation. First, there is the price of the biomass, including
collection and transport. Then, there is the additional CAPEX and OPEX due to the retrofitting of the power plant. Finally,
there is the CEC incentive, which is intended to outweigh the additional costs of using biomass for energy generation.
Assumptions $/MWh Assumptions

Average biomass price (assuming 50% 18 Depreciation 10 years
coconut husk and 50% sugarcane trash)
Electrical efficiency 40%
Coal price 11
Carbon dioxide emissions 94.6 kg/GJ
CAPEX (including depreciation) 3
OPEX (percentage of investment) 2%
OPEX 0.5
CEC 10
Carbon dioxide emission tax 0.2
25.0
20.0
15.0 Total
Taxes
10.0 CEC
USD/MWh
OPEX
5.0
CAPEX
Input price
0
Breakdown of Total costs Total costs
biomass costs of biomass of coal
-5.0
-10.0
-15.0
Without the CEC, the co-firing solution is significantly more expensive than the business-as-usual scenario. However, including
the CEC, the total cost of the co-firing solution becomes lower than the business-as-usual scenario, indicating that, subject
to the assumptions, a co-firing solution is financially viable and a sound investment.
Therefore, project developers should, at an early stage of the project development process, seek to identify and understand
the specific regulatory framework in place for biomass-to-energy in their country and region.
Source: COWI.

will often become an important determinant of a project’s countries and emerging economies have comprehensive
financial viability. Box 10–1 shows the impact of a combination regulatory support regimes in place.
of a carbon dioxide tax and renewable energy certificates on the
viability of a coal-to-biomass conversion project. In this context, firm economic support measures, such as a
price for carbon dioxide, feed-in tariffs, renewable energy
As shown in Box 10–1, a biomass-to-energy retrofit project certificates, and renewable energy tenders will have a more
selling excess electricity to the grid cannot always compete direct impact on project financial viability than softer
based on a direct comparison with the cost of fossil fuel. But policies such as renewable energy targets.
when the supportive measures of the regulatory framework
are taken adequately into account, it may be quite attractive. 10.3 REGULATORY RISKS AND THEIR
MITIGATION
Table 10–1 provides an overview of the renewable energy
Table 10–2 presents the key regulatory risks (and
support policies in selected developing countries and
opportunities) faced by biomass-to-energy projects and
emerging economies (2015 data). Note that many developing
suggests strategies for their mitigation.
Table 10-1: Overview of the Renewable Energy Support Policies in Selected Countries, 2015
Renewable
Renewable Price for Energy Renewable Renewable Tax
Energy Carbon Feed-in Mandates/ Net Metering/ Energy Energy Investment Incentives
Country Targets Dioxide Tariffs Obligations Net Billing Certificates Tenders Grants or Credits
Argentina ✓ ✓ ✓ ✓ ✓ ✓
Brazil ✓ ✓ ✓ ✓ ✓ ✓
China ✓ ✓ ✓ ✓ ✓ ✓ ✓
Colombia ✓ ✓ ✓ ✓ ✓
Ghana ✓ ✓ ✓ ✓ ✓ ✓
India ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Indonesia ✓ ✓ ✓ ✓ ✓ ✓
Mexico ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Nepal ✓ ✓ ✓ ✓ ✓ ✓
Nigeria ✓ ✓ ✓ ✓ ✓
Pakistan ✓ ✓ ✓ ✓ ✓ ✓ ✓
Peru ✓ ✓ ✓ ✓ ✓ ✓
South Africa ✓ ✓ ✓ ✓ ✓ ✓
Sri Lanka ✓ ✓ ✓ ✓ ✓ ✓
Turkey ✓ ✓ ✓ ✓
Uganda ✓ ✓ ✓ ✓ ✓
Vietnam ✓ ✓ ✓ ✓ ✓ ✓
Source: REN21, 2015.

Table 10-2: Regulatory Risks
Regulatory Risk Strategy for Mitigation
Availability of policy support measures necessary Seek early engagement with relevant authorities in relation to eligibility,
for project viability process, and terms for policy support measures.
Key points to consider are:
• Is the country/region generally supportive of renewable energy?
• Are there support mechanisms in place (most importantly feed-in tariffs,
but also renewable energy certificates, taxes on carbon dioxide, renewable
energy tenders, renewable energy mandates/obligations, investment
grants, or tax incentives)?
• Are policies limited in time, and what are the procedures for benefiting?
Changes in political priorities that may reduce The best insurance against adverse changes in the regulatory regime (such as
attractiveness of regulatory regime a reduction in or abolition of feed-in tariffs) is to seek contractual security on
regulatory regime aspects that are essential to project viability at the time of the
investment decision.
Planning permits are not obtained in a timely and Seek early engagement with relevant authorities on process and documentation
transparent manner need.
National support for projects and engagement with international donors also
may help ensure transparency of permitting procedures.
Environmental impact assessment process Seek early engagement with relevant authorities and key stakeholders (including
is smooth and predictable nongovernmental organizations and local communities) on the project’s
environmental and social aspects and on how to mitigate any adverse effects.
Source: COWI.

Source: COWI.
120 Commercial Aspects

COMMERCIAL ASPECTS
11
This chapter focuses on the contractual framework for Figure 11–1 illustrates the structure of a biomass-to-energy
biomass and the sale of excess power or steam/heat. project and the commercial contracts/agreements that are
This is important for biomass-to-energy projects that are necessary to ensure a stable supply of biomass and access to
dependent on an external biomass supply to supplement a market for energy produced, but not used, by the project
on-site waste from the production process or where the owner. These commercial contracts/agreements are the
project is dependent on the external sale of produced energy biomass supply agreements, the power purchase agreement,
(beyond the direct substitution of energy used in the on-site potential steam/heat agreements, and the bio-residue
production process). disposal agreement.
Formalizing the agreements with suppliers and offtakers 11.1 BIOMASS SUPPLY AGREEMENTS
is essential for ensuring a robust financially viable project.
A biomass supply agreement is essential for ensuring a
Once the key terms have been established, the project
viable biomass-to-energy project, if the necessary biomass
developer will have concrete knowledge of the input and
is not owned by the project owner. If the supply of biomass
output of the plant. This will enable the developer to
fails, the whole operation of the plant stalls, with severe
conduct a realistic financial analysis, which is the basis for a
financial consequences to follow. The agreement is entered
bankable feasibility study to be used for ensuring financing.
between the biomass-to-energy project and one or more
Chapter 14 goes in-depth on the requirements for obtaining
financing, but a robust business case is definitely the key.
Figure 11-1: Commercial Agreements
Banks
Equity for Authority
providing
project approvals
loans
Loan
Own agreement Own energy
biomass
consumption
on site
Biomass supply
biomass and power
agreement Plant construction
suppliers customers
contracts PPA
O&M contractor Construction and Insurance

Consultants (if outsourced) equipment company
contractors
Source: COWI.

external biomass suppliers. The most important factors to Key elements of a PPA include the following:
incorporate in a biomass supply agreement are the following:
• Required quality of the power (frequency, voltage,
• Quantity of biomass (tons per day, delivered on-site) and planned outage)
what happens if the supplier does not supply biomass in
• Quantities of capacity and energy sold (MWh per year)
accordance with the agreement
• Price of electricity output (dollars per MWh) and available
• Quality of biomass (typically weight and moisture
capacity (if the project is perceived as baseload), the price
content), how quality is determined, and what happens if
may reflect special feed-in tariffs for renewable energy and
the specifications are not met
renewable energy credits (see Section 10.2)
• Price of biomass (dollars per ton) and how the price
• Flexibility for producer to make third-party sales (if
varies with quality parameters
allowed by the purchaser)
• Place of delivery (ideally on site)
• Compensation to producer in case of production
• Rejection criteria and consequences of late delivery. limitations (by purchaser or transmission system
operator) due to constraints in transmission system
Besides being self-sufficient in biomass supply, the preferable
situation would be to have one stable biomass supplier, so • Compensation to purchaser in case of delays in
the owner has only one agreement to manage. The chosen completion of project or underperformance of delivery
biomass supplier will then be responsible for subcontracting (may include sanctions or liquidated damages for
with other suppliers, collecting and transporting the projects being perceived as baseload)
biomass, and delivering the agreed amounts of biomass at
• Timeframe of the agreement (typically five years or more)
the agreed quality and price.
• Dispatching rules, including potential restrictions.
The example in Box 11–1 outlines the structure and the most
Further to this, the infrastructure cost of transmission and
common aspects of a biomass supply agreement.8
connection to the nearest suitable grid-access point should be
estimated and agreed. For projects where the prime purpose is
11.2 POWER PURCHASE AGREEMENTS
energy production for own use and only residual energy is sold
When a biomass-to-energy project generates power beyond to the grid, the cost of the transmission line and connection
the owner’s energy needs, a power purchase agreement (PPA) costs typically will have to be funded by the project.
can be entered into between the biomass-to-energy project
acting as an independent power producer and a purchaser of For biomass projects that are dependent on the sale of
power (often a state-owned electricity utility). electricity to third parties, negotiating an acceptable PPA
is a key step in the project development, and the PPA
The PPA is a long-term agreement that lays down key therefore should not be entered into without the advice of
commercial provisions for energy prices and sales quantities experienced legal counsel. The PPA is a mandatory part of
during a given period. Such agreement provides both the the documentation to reach a financing agreement.
project owner and the energy purchaser with a level of
security and stability, by eliminating otherwise unknown The example in Box 11–2 outlines a typical structure of a
market factors. This allows the biomass project to secure a PPA. PPAs for grid tie-in of renewable energy sources are
revenue stream that can provide comfort to lenders. often regional or national standard documents developed by
(or on behalf of) the transmission system operator.9
8 Examples of bulk fuels supply agreements are available at:
http://ppp.worldbank. org/public-private-partnership/sector/
energy/energy-power-agreements/bulk-fuel-supply-agreements 9 Examples of PPAs are available at
and http://www.carbontrust.com/resources/guides/renewable- https://ppp.worldbank.org/public-private-partnership/sector/
energy-technologies/bio-mass-heating-tools-and-guidance. energy/energy-power-agreements/power-purchase-agreements

Box 11-1: Example of the Structure of a Biomass Supply Agreement
Contract between [SUPPLIER] and [END USER] for the supply of solid biomass to [SITE]
1. Purpose
The supplier agrees to supply to the end user, and the end user agrees to purchase from the supplier, biomass to the
specifications, in the quantities, for the period, at the price, and on the terms and conditions set out below.
2. Duration of contract
This contract is for a period of [XX MONTHS/YEARS] and will commence on [DATE] and end on [DATE].
3. Quantity
The minimum monthly quantity of biomass supplied during the defined contract will be [XX] cubic meters [OR XX TONS].
In case of a shortfall in the biomass available to the supplier, the supplier shall be responsible for [SOURCING FROM THIRD
PARTIES/PAYING COMPENSATION].
4. Source and delivery
The biomass will be derived from the following sources: [insert as appropriate].
Biomass will be supplied in [BAGGED/BALED/LOOSE] form and delivered to the end user by a suitable vehicle for delivery
into the end user’s fuel store.
5. Quality and specifications
Regulating key quality parameters such as, for example, moisture content.
The target moisture content on a wet basis shall be [XX%] by weight based on the [relevant standards] but in any event shall
not exceed [YY%]. In case of delivered biomass not meeting the minimum specifications as determined through sampling,
the supplier shall be responsible for [COMPENSATION].
6. Weights, sampling, analysis
The end user may at any time send representative samples of biomass for evaluation, analysis, testing, and approval.
All samples must meet the specification.
7. Price
The price for biomass delivered into the fuel store of the end user will be based upon the following tariff up until [DATE] $ [XX]
per cubic meter of biomass; [OR: $ XX PER TON OF BIOMASS]. For biomass complying with minimum specifications but with a
moisture content above [ZZ%] the price shall be [ADJUSTED PRICE].
8. Invoices, billing, payment
The supplier will invoice the end user on a monthly basis. This will be based upon the number of loads recorded (by weight or
volume) and will be assessed on the XX day of each month.
9. Insurance
The supplier will have adequate public liability insurance for handling and transport of the specified quantities of biomass. The
responsibility for insuring the end user against the economic consequences of a possible inability of the supplier to meet the
contractual obligations shall be with [END-USER/SUPPLIER]. Irrespective of this, the supplier shall in case of default of the
obligations under this contract pay the end user a penalty defined as [definition of penalty upon default].
10. Event of dispute
11. Termination
12. Force majeure
13. Representation
14. Governing law and jurisdiction
Source: COWI.

Box 11-2: Example of the Structure of a Power Purchase Agreement
PPA between [PRODUCER] and [PURCHASER] for the supply of power from [FACILITY]
• Purpose • Contract administration and notices
• Facility description • Dispute resolution
• Interconnection facilities and metering • Force majeure
• Obligation to sell and purchase energy output • Representations and warranties
• Payment for energy output • Insurance and indemnity
• Supporting regulatory framework • Regulatory jurisdiction and compliance
(feed-in tariff, purchase obligations, etc.)
• Assignment and other transfer restrictions
• Billing and payment
• Confidential information
• Operation and maintenance
• Miscellaneous
• Default and termination
Source: COWI.
11.3 STEAM/HEAT SUPPLY AGREEMENT If treated properly, bio-residues from the energy production
may have the same qualities as a fertilizer.11 In some
For biomass projects with excess production of steam/heat
situations, the bio-residues might be of such high quality that
(hot water), sales to a nearby industry may supplement the
the project owner will be able to obtain a price for them.
project revenues. A steam/heat supply agreement defines the
However, in most cases, the local farmers will be willing
key commercial terms concerning steam/heat prices and sale
to collect the bio-residues free of charge. Thus, the project
quantities during a given period and provides both the project
owner will gain by saving both transport and disposal of the
owner and energy purchaser with a level of security and stability.
residues from the energy generation.
The heat supply agreement should include and define the

This disposal of the bio-residues shall be formalized to
following elements:
ensure that the project owner will not face an unexpected
• Steam/heat parameters (temperature/pressure) and capacity/storage issue or any extra disposal costs if the
maximum variations regular users find another supplier. The project owner may
be forced to commit to many user agreements, to meet
• Quantities of heat sold (MWh per year)
production demand.
• Price of heat (dollars per MWh)
The bio-residue disposal agreement should specify
• Responsibility for investment costs for the heat transfer
the following:
infrastructure between the heat supplier and the heat user
• Timeframe of the agreement (years). • Quantities of the bio-residue (tons per day)
Box 11–3 outlines the structure and the most common • Quality of the bio-residue (nutrient value)
aspects of a heat supply agreement.10 • Price (or cost of disposal) of the bio-residue (dollars per ton).
11.4 BIO-RESIDUE DISPOSAL AGREEMENT
The ash residues from the combustion process, or the

de-gassed bio-slurry from biogas production, must somehow 11 For ash residues, this is the case for bottom ash, whereas fly ash
be disposed of. will contain substances that may require it to be managed as
waste. For further discussion of ash utilization, see:
http://www.ieabcc.nl/publications/ash_utilization_kema.pdf and
10 A template heat supply agreement can be found at: http://www.biomassenergycentre.org.uk/pls/portal/docs/page/
https://www.carbontrust.com/media/74612/revised_contract_ practical/ using%20biomass%20fuels/emissions/ash/ash%20
for_supply_of_heat_energy.doc. laymans%20re- port_english.pdf.

Box 11-3: Example of the Structure of a Heat Supply Agreement
Agreement between [SUPPLIER] and [HEAT USER] for the supply of heat energy derived from biomass
1. Purpose
The supplier agrees to supply to the end user, and the end user agrees to purchase from the supplier, heat energy generated
from biomass to the specifications, for the period, at the price, and on the terms and conditions set out below.
2. Duration of contract
This agreement is for a period of [XX YEARS] and will commence on [DATE] and end on [DATE].
3. Facility description
The heat supply facilities of the supplier, the heat using facilities of the [HEAT USER], and the interconnecting facilities between
them are described in [SCHEDULE].
4. Interconnection facilities and metering
Investment in and subsequent operation and maintenance of the interconnection between the boiler and the heat user is the
responsibility of [SUPPLIER/HEAT USER].
The installation and effective operation of an appropriate heat meter to record heat output from the boiler is the responsibility
of [SUPPLIER/HEAT USER].
5. Quantity of heat
The minimum heat purchase during the defined contract period will be [AMOUNT] megawatt hours (MWh) per [UNIT OF TIME]
(the minimum total offtake).
6. Obligation to sell and purchase heat
The supplier is required to sell heat energy based on the predicted annual demand and at the tariff specified in the contract,
unless [SPECIFIC CONDITIONS].
The heat user is required to purchase heat energy based on the predicted annual demand and at the tariff specified in the
contract, unless [SPECIFIC CONDITIONS].
7. Price for heat delivered
The price for heat delivered to the end user will be based upon the following tariff(s): $ [XX] per MWh per unit of heat used
within the minimum total purchase and $ [YY] per MWh per unit of heat used above the minimum total purchase.
8. Billing and payment
The supplier will invoice the heat user on a monthly basis on the [XX] day of each month based upon the tariff structure and the
measured heat consumption.
9. Insurance and indemnity
The supplier will indemnify the heat user against any damage to the heat user’s facilities caused by the supplier or his agents
within a total maximum of [MAX. INDEMNITY]. The supplier will have public liability insurance of [INSURANCE AMOUNT].
10. Event of dispute
11. Default and termination
12. Force majeure
13. Representations and warranties
14. Governing law and jurisdiction
Source: COWI.

Source: COWI.
126 Typical Investment and Operation and Maintenance Costs

TYPICAL INVESTMENT AND OPERATION AND
MAINTENANCE COSTS 12
The aim of this chapter is to provide an indication of INTEGRATION/SYNERGIES WITH OTHER INDUSTRIES
capital costs (CAPEX) and operation and maintenance
One of the most important issues to consider is the possible
costs (OPEX) for a biomass-to-energy plant and to compare
integration or joint operation with a host or nearby industry,
alternatives. These cost indications are intended to assist
which may supply the fuel and/or be the primary customer
project developers and investors with the initial assessment
for the produced electricity or heat. The integration also
of a candidate project in order to decide at an early stage
may include operational and maintenance staff and facilities,
whether to proceed with the project. Actual costs will
such as the control room, workshops, management,
depend strongly on several factors, and a more detailed and
administration, staff rooms, etc.
precise analysis of cost structure and cost level should be
made at a project-specific level. Such cost analysis should be FUEL HANDLING AND STORAGE FACILITIES ON-SITE
performed during the pre-feasibility and feasibility phases, as
If residual products or waste from an industrial operation
detailed in Chapter 2.
are the partial or main source of fuel for the biomass plant,
some facilities for handling, storage, and pretreatment will
This chapter presents the factors influencing the investment
probably already be available.
costs for a project, along with generalized CAPEX and OPEX
estimates for the main technology groups described in Chapter 5: GREENFIELD OR EXISTING SITE
• Steam cycle If the plant is to be built on an existing site, some

infrastructure may already be in place, such as roads, harbor,
• ORC
water supply, sewage water system, grid connection, etc.
• Biogas plant.
CAPTIVE POWER CONSIDERATIONS
The estimates presented use cost estimates published by the
In this context, the access to energy produced from biomass
International Renewable Energy Agency (IRENA, 2015)
residues may reduce the need for reliance on potentially
and cost estimates made by COWI based on other available
unstable local electricity grids or the need for heat and
open-data sources and a number of specific projects.
power production based on expensive imported fossil fuels.
12.1 FACTORS INFLUENCING INVESTMENT COSTS 12.1.2 PLANT-SPECIFIC ISSUES

A large number of factors determine the level of investment cost A number of issues related to the specific plant must be analyzed
(CAPEX) for a biomass plant. These factors can be roughly during the pre-feasibility and feasibility phases of the project in
categorized as: site specific, plant specific, and local conditions. order to establish a good investment estimate. The main issues to
consider during the project development phase are:
12.1.1 SITE-SPECIFIC ISSUES
There will always be site-specific issues that must be PLANT SIZE

considered during the project development. For a biomass For plants of similar type and location, the specific costs
plant, these include: will generally decrease with increasing plant capacity due to
economies of scale.

FUEL TYPE AUTHORITY REQUIREMENTS
Homogeneous fuel with high density and small needs for Authority requirements with regard to planning procedures
pretreatment requires a lower investment. The need for covered and environmental issues (for example, emissions and water
storage, pretreatment, and mixing will increase investment. supply) are important cost factors. They also can be of great
importance for the project time schedule.
TECHNOLOGY
Boiler type and the choice of steam cycle or ORC must Figure 12–1 shows investment costs for plants of different sizes
be made based primarily on the type and amount of fuels and for different regions. For some of the data points, the applied
available. Fuel type also will influence the choice of flue gas technology is indicated. Note that the Asian projects are mainly
cleaning equipment. Chinese. Furthermore, authority requirements for, for example,
the environment may vary among countries and regions.
COOLING OF CONDENSER
There is a substantial difference in the specific investment
Access to cooling water may reduce investment and
costs among regions, with Asia having the lowest costs and
operation and maintenance costs compared to the use of
Europe having the highest costs. Differences in the costs of
cooling towers or air-cooled condensers.
local labor and materials are among the main determining
COMBINED HEAT AND POWER PRODUCTION (CHP) factors. However, there also is a general difference in
complexity, efficiency, and quality of the plants.
Back-pressure turbines delivering all exhaust steam as a
heat source for industrial process will reduce the need for INVESTORS HAVE A CHOICE OF DIFFERENT
cooling towers or air coolers compared to condensing plants APPROACHES:
designed for electric power production only. Adding steam
• Use local contractors for design and manufacture and
extraction for supply of industrial process heat or district
installation of equipment
heat may add investment costs compared to a condensing
plant for power production only. • Use local contractors for manufacture and installation,
but use design based on license and/or consultancy from
DEGREE OF AUTOMATION OECD countries; investors from OECD countries often
The degree of automation should be balanced with the salary choose this option when investing in other regions.
and skills of local operators. • Use design and EPC or main contractors from OECD
countries with, for example, Asian contractors as
REQUIREMENTS FOR EFFICIENCY
subcontractors for specific equipment (mostly used for
Requirements for maximizing the net electrical output of projects within OECD countries).
the biomass plant for a fixed amount of fuel will result in a
higher CAPEX. 12.2 INVESTMENT COST (CAPEX) ELEMENTS
12.1.3 ISSUES REGARDING LOCAL CONDITIONS This section presents the CAPEX elements and sizes across
the three main technology types: steam-cycle, ORC, and
Investment costs are very dependent on conditions, which
biogas plants.
vary among countries and regions, including:
LOCAL MARKET FOR CONTRACTORS AND EQUIPMENT The project development phases will clarify the project definition
SUPPLIERS and enable the preparation of a more detailed investment budget
with a breakdown of costs into the actual components.
The price of equipment and availability of qualified
contractors and equipment suppliers and skilled workers
Publicly available investment data from IRENA and similar
differ across countries and regions.
sources are most often presented on a highly aggregated level.

Figure 12-1: Investment Costs for Plants of Different Sizes and for Different Regions
Source: IRENA, 2015.
Investment data also may be unclear regarding the CAPEX ESTIMATES ACROSS TECHNOLOGIES
technology, actual cost elements included, and country or
Table 12–2 presents typical CAPEX estimates for plants
geographical situation of the projects presented.
differing across technologies and size. These data are
12.2.1 CAPEX COST ESTIMATES collected by COWI based on experience from a number of
Table 12–1 presents the main CAPEX groups and sub-items

for a typical biomass plant. The table only shows investment Table 12-1: Main CAPEX Groups and Sub-items for a
Steam-cycle Plant
elements “inside the fence” of the plant site.
Main Item Sub-item
Other project-specific elements that are not included in the Project development Design and engineering
following cost estimates are: Supervision

Environmental assessment
• Site purchase Administration
• Fuel collection and logistics for delivery to plant site Storage and handling of fuel Fuel handling equipment
and residual products
Pretreatment of fuel
• Transmission lines and other grid connection outside
Storage for fuel and ash
plant site
Main process equipment Boiler
• Pipelines for heat delivery outside the plant site Flue gas cleaning
(steam or district heating) Turbine
Electrical systems
• Costs of financing.
Controls and instrumentation
These additional costs should always be included in the
Balance of plant (BOP)
financial analysis, as explained in Chapter 13, but they are
Civil works Buildings
excluded here to enable comparability between cost estimates.
Roads on-site
Source: COWI.

Table 12-2: Typical Investment Costs (CAPEX) on a European Basis
Plant Size (MWe) Steam Cycle CAPEX ($/kW) ORC CAPEX ($/kW) Biogas CAPEX ($/kW)
1–5 5,000–10,000 3,000–8,000 3,500–6,500
5–10 4,000–8,000 2,000–5,000 n.a.
10–40 3,000–6,000 n.a. n.a.
mainly European projects and on information from dialogue the plant and the geography. The highest CAPEX costs are
with various contractors and suppliers. found in the European Union, the United States, and South
Africa. China and India have a typical CAPEX of one-third
COST DISTRIBUTION OF CAPEX
of the EU prices, whereas the remaining countries (rest of the
Table 12–3 shows an estimate of how the main investment world) lies in between.
costs are distributed on the main CAPEX items. The
estimates are based on experience from a number of 12.3 OPERATION AND MAINTENANCE COSTS
European projects. (OPEX)
The operational and maintenance expenditures for a biomass

Figures 12–2, 12–3, and 12–4 show a model calculation
plant across the three technology types may be divided into
illustrating how typical investment costs vary with the size of
four subcategories:
Table 12-3: Example of Cost Distribution of the Main CAPEX Items for Biomass Plants
Steam Cycle ORC Biogas
Main Item Sub-item (% of CAPEX) (% of CAPEX) (% of CAPEX)
Project development Design and engineering 10 10 10
Supervision
Environmental assessment
Administration
Storage and handling of fuel and residual Fuel handling equipment 7 10 20
products
Pretreatment of fuel
Storage for fuel and ash 3
Main process equipment Boiler 15 20
Biogas process plant 30
Flue gas cleaning 5
Turbine/generator 15
ORC module 20
Engine/generator 15
Electrical systems 7
Controls and instrumentation 3
Balance of plant (BOP) 15 20 10
Civil works Buildings 20 20 15
Roads on site
Source: COWI.

Figure 12-2: Range of Typical Investment Costs (CAPEX), Depending on Plant Size, for Steam Cycle
Sources: Danish Energy Agency and Energinet.dk, 2015; Ea Energianalyse, 2014; IRENA, 2015; COWI.
Figure 12-3: Range of Typical Investment Costs (CAPEX), Depending on Plant Size, for ORC
Figure 12-4: Range of Typical Investment Costs (CAPEX), Depending on Plant Size, for Biogas

VARIABLE OPERATIONAL COSTS The costs described above do not include:
These are costs related to consumables, electricity consumption,

• Financing costs
disposal of residues, etc. that are directly linked to the amount
of fuel used and the amount of energy produced. • Costs of fuel purchase.
Typical insurance costs may amount to approximately

VARIABLE MAINTENANCE COSTS
1 percent of CAPEX per year. However, they can vary
These are costs related to the maintenance of process considerably with local conditions and requirements from
equipment, such as fuel handling, boiler, turbine/generator, financing institutions.
flue gas treatment, etc. They depend, to a certain extent, on
the amount of fuel used and the amount of energy produced. 12.3.1 OPERATION AND MAINTENANCE COST
ESTIMATES
The costs may be averaged over the plant lifetime, but, in Unfortunately, the available data often merge fixed and variable
practice, costs will vary from one year to the other. The operation and maintenance costs into one number, thus rendering
annual maintenance cost has substantial variations over the a breakdown between fixed and variable costs impossible.
plant life. During the first few years, some of the equipment
will still have to be repaired, or even exchanged under the Table 12–4 shows data collected by IRENA for plants based
contractor’s guarantee. During the plant life, some years on various types of plants with steam boilers and turbines, as
will show considerable maintenance costs for major repairs well as for biogas plants.
or equipment refurbishment, but compensated by less-than-
average costs in other years. Fixed operation and maintenance costs of larger plants can
be expected to be lower per kilowatt due to economies of
These costs do not include the salary, etc., for the plant’s scale, especially for labor.
in-house maintenance personnel, which is usually accounted
for together with the plant’s other staff. A large plant will Table 12–5 presents typical OPEX estimates for different
normally have in-house staff with the skills to deal with all or biomass-to-energy technologies and sizes. These data were
most day-to-day maintenance requirements. A smaller plant collected by COWI based on experience from a number of
typically will have less in-house capabilities and therefore will mainly European projects and on information from dialogue
depend more on outside contractors and service companies. with various contractors and suppliers.
FIXED OPERATIONAL COSTS
These costs are related to operational costs independent

Table 12-4: Operation and Maintenance Costs (OPEX)
of the amount of fuel used and the amount of energy
Fixed O&M per Year Variable O&M
produced, for example, salaries, insurance costs, electricity
(% of CAPEX) (2014 $/MWh)
consumption for lighting, ventilation and other consumption
Stoker/BFB/CFB 3.2 4–5
linked to non-process equipment. boilers
Biogas 2.1–3.2 4.4
FIXED MAINTENANCE COSTS
2.3–7
These costs are related to maintenance of non-process
Sources: Turboden, 2016; Danish Energy Agency and Energinet.dk, 2015;
equipment, which needs to be maintained independently of Ea Energianalyse, 2014; IRENA, 2015; COWI.
the amount of fuel used and the amount of energy produced,

such as buildings and roads.

Source: http://jfe-project.blogspot.dk/.
Table 12-5: Typical Operation and Maintenance Costs (OPEX) on a European Basis

Plant Size OPEX Fixed Costs per Year OPEX Variable Costs
Plant Technology (MWe) (% of CAPEX) ($/MWh)
Steam boiler and turbine 1–5 3–6% 3–7
5–10 3–6% 3–7
10–40 3–6% 3–7
ORC 1–5 2–3% 5–10
5–10 1.5–2% 5–10
Biogas 1–5 Included in variable costs 20–40
5–10
Name and location: Mahachi Green Power Plant, Thailand
Project: Power plant using coconut residues in

the Samut Sakhon province in Thailand
Description: Grate-fired boiler with high efficiency

(90 percent) producing electricity for
the grid.
Boiler data: 92 bar / 537 °C / 40 tons of steam

per hour
Turbine output: 9.9 MW gross power output
Fuel: Coconut residues

(husk, shell, bunch, frond, leaves, trunk)
Source: DP Clean Tech Group, www.dpcleantech.com.

Source: COWI.
134 Financial and Economic Analyses

FINANCIAL AND ECONOMIC ANALYSES
13
The decision to implement a biomass project follows An economic analysis evaluates a project’s impact on society
an assessment of the viability of the project in terms of by valuating its costs and benefits to the overall economy. An
technological, organizational, environmental, economic, and economic analysis compares a baseline scenario, without the
financial aspects. Once a project has been analyzed in the project, to a scenario where the project is implemented, assessing
areas mentioned above, the project developer can commence the effects, including quantifying externalities (such as social or
the construction phase. environmental effects) in monetary terms. If the net benefit of a
project is positive, then the project will have an overall positive
Financial analyses and economic analyses are both essential effect on society, despite the results of the financial analysis.
approaches when assessing a biomass project. Both analyses
provide the ability to compare different technical and financing The shaded box below summarizes the difference between a
solutions from both an investor perspective and a regulator financial and an economic analysis. Projects with large benefits
(society) perspective. A financial and economic analysis should to society (for example, reduction in greenhouse-gas emissions
always include a comparison to a “business-as-usual” scenario. through the use of secondary or tertiary biomass instead of coal
or oil) will most likely have a better economic result compared
to the financial result. Projects using primary biomass for energy
Business as usual
production may cause an increase in greenhouse-gas emissions or
A business-as-usual scenario could contain the following
elements: cause a rise in food prices. They may result in a positive financial
• Current costs of energy, either market price for business case, but might have a negative economic business case.
electricity and heat or cost of own-production based
on coal, oil, or gas Additional information on financial and economic analyses
• Stability of current energy supply can be found in the World Bank publication Economic
• Current costs and other issues related to biomass Analysis of Investment Operations: Analytical Tools and
residue storage and disposal
• Planned reinvestment costs in existing plant.
Financial analysis:
• Investor’s perspective
A financial analysis assesses the financial viability of a • Based on market prices
project by evaluating the costs and benefits of the project • Including taxes, tariffs, subsidies, etc.
from the investor’s perspective. • Does not include externalities
• Important for both small- and large-scale biomass projects
One main indicator for a biomass project to be a financially
Economic analysis:
sound investment is a return on the investments equal to or
• Society’s economic perspective
higher than the investor’s weighted average cost of capital
(WACC). Other financial indicators are the net present • Applies economic prices excluding taxes, tariffs, subsidies,
etc. to reflect the value of the project to society
value (NPV), the internal rate of return (IRR), the economic
• Externalities (positive and negative) are included and
levelized cost of electricity (LCOE), the debt service coverage quantified in monetary terms (such as reduction in
ratio (DSCR), and the payback period, all of which are greenhouse-gas emissions, if applying secondary biomass)
explained and processed in this chapter.

Practical Applications and in the Asian Development Bank
publication Guidelines for the Economic Analysis of Projects. Economies of scale for biomass projects:
There are significant economies of scale, varying across
When assessing financial and economic analyses, there are technologies, when comparing small and large biomass-
to-energy plants. It is important to be aware of this when
specific basic aspects that are essential for ensuring a viable
conducting financial and economic feasibility analyses. The
project. If these aspects are in place when initiating the project, marginal costs of producing one kilowatt hour decrease
the probability of a successful project will increase significantly. as the capacity of the plant increases, as illustrated in the
graph below of steam-cycle plants. This is also described in
detail in Chapter 12.
The key elements to ensure that the biomass project is
financially sustainable are:
• A secure and stable supply of quality biomass feedstock

is available.
• There is easy access to a stable market for the produced

electricity and/or heat.
• Available biomass volumes are sufficient to justify the

technology and scale of operation.
Source: Danish Energy Agency and Energinet.dk, 2015; Ea Energianalyse,
2014; IRENA, 2015; COWI.
• Biomass is available as process residues (at zero or low
Hence, subject to availability of sufficient volumes of
costs) or the cost of collecting, transporting, and storing biomass and demand for the produced energy, a larger
biomass can be financed by the project. plant will, all other things equal, be more cost efficient.
• Cost of pretreatment can be financed by the project.

A financial analysis of a biomass project will include a range
• Access to financing is at affordable rates and acceptable terms.
of indicators in order to allow developers, lenders, investors,
and relevant government bodies to assess the project’s
The economic analysis adds a few important aspects for
financial viability.
a sustainable project, in addition to those mentioned
in the financial analysis. The key elements to ensure an
An investor considers a project to be a viable investment
economically viable biomass project are:
if the internal rate of return is higher than the weighted
average cost of capital. Investors will have access to
• The biomass applied for the energy production has no
capital at a cost (hurdle rate of return); the return from the
current alternative use that will cause social impact if
investment of that capital must be enough to meet these
removed (for example, as food, feed, or fuel).
costs. Furthermore, the investment should generate a profit,
• The biomass supply is based mainly on residual biomass compensating the risk levels of the project.
(secondary and tertiary biomasses), in order to realize
climate and environmental benefits.
Risks related to the financial viability of biomass projects:
13.1 FINANCIAL ANALYSIS OF BIOMASS PROJECTS • Unstable supply of biomass
• Insufficient quality of biomass
A financial analysis estimates the overall financial viability
• Poor market access for end products
of a project from an investor’s perspective. This section
describes general key assumptions for a financial analysis, • No access to finance at competitive terms (for example,
due to an inexperienced finance market that is unfamiliar
the theoretical methodology, results, and outputs, along with with investments in biomass projects)
practical examples. • Need for collection, transport, and pretreatment of
biomass feedstock.

13.1.1 METHODOLOGY AND KEY ASSUMPTIONS A project is considered a viable investment if the internal
rate of return (IRR) is higher than the weighted average cost
The methodology used in a financial analysis applies a series
of capital (WACC). This is explained further in the following
of assumptions relating to the biomass-to-energy sector.
section regarding the financial results/outputs.
This section presents the sector-specific methodology and
the assumptions and explains their origin and importance. It REVENUE
is important to perform a sensitivity analysis on all crucial
The financial analysis must consider the market demand for
assumptions of the analysis, as explained in Section 13.3.
the products, how tariff regimes function for each product,
The overall approach to a financial analysis is to compare the and how this will affect the cash flow. The revenue consists of
costs of the project to the expected revenue over the project the sale of one or more of the following production outputs,
lifespan, including the costs of financing and taxes/subsidies. depending on whether the plant is on-grid or off-grid:
Figure 13–1 illustrates the approach to a financial analysis.

On-grid:
Figure 13–2 illustrates investment costs, operation and

• Electricity
maintenance costs, biomass purchase, and sales of heat
and power. • Heat
WACC • Gas
The return of a project shall be compared to the alternative • Potentially bio-residue used as fertilizer.
return, given that the money is invested elsewhere. Therefore,

Off-grid:
the appropriate discount rate for a financial assessment
is the weighted average cost of capital, often referred to
• Savings from avoided fuel costs (coal, oil, or gas)
as the WACC.
• Potentially bio-residue used as fertilizer.
The WACC is calculated using the following formula:
The amount and price of each of these production outputs
is crucial to the financial viability of the project. Attention
WACC = Share of Equity x Cost of Equity also should be paid to the potential difference in tariff and
+ Share of Debt x After-tax Cost of Debt subsidy regimes, as these may differ depending on whether
the plant is on-grid or off-grid.
where the corporate tax shield is deducted from the cost of debt.
COST OF BIOMASS SUPPLY
The discount rate of the project is very important, as it Biomass is the main production input. This is why a
affects the present value of future costs and benefits. stable and secure supply of quality biomass is essential for
obtaining a reliable financial analysis result.
Figure 13-1: Approach to Financial Analysis
Revenues
from Cost of
CAPEX OPEX Net value
energy financing
production
Source: COWI.

Figure 13-2: Example Illustration of Project Cash Flow
Source: COWI.
A main assumption of this guide is that the biomass used for including property, industrial buildings, equipment, and
energy production is residue from either forestry, agriculture, machinery. Table 12–3 shows an estimate of how the main
or the food processing industry. If the biomass currently investment costs are distributed on the main CAPEX items.
has no alternative use, the costs of applying it for energy The estimates are based on experience from a number of
production will amount to the following cost components: European projects.
• Cost of collection A capital expenditure must be capitalized. This requires the

owner to spread the cost of the expenditure (the fixed cost)
• Cost of transport
over the useful life of the asset.
• Cost of pretreatment (drying)
ECONOMIC LIFESPAN
• Cost of storage.
The average lifespan of a biomass-to-energy plan is assumed
If the biomass has an alternative use, it will generate a price, to be 20 to 30 years, which also is the length of the financial
in addition to the aspects mentioned above. A project with analysis. It is important to include the residual value of the
access to otherwise unused biomass of sufficient quality energy plant if a shorter analysis period is selected.
therefore has a more promising project economy than a
13.1.2 RESULTS AND OUTPUTS
project that is forced to purchase and import its biomass.
A financial analysis presents the project’s financial viability
The supply of secondary or tertiary biomass also depends from the investor or lender’s perspective over the project
on factors related to production of the primary biomass lifetime, based on the assumptions presented above. To
product. Residues from crop production are sensitive to evaluate a project’s financial viability, the analysis presents
weather, climate, and seasonal variations. Other types of the project’s balance sheet and cash flow, based on the
biomass, such as residues from dairies or manure from CAPEX and OPEX. Furthermore, the analysis should clearly
livestock, are much less prone to seasonal variations. present the underlying assumptions such as the WACC and
lifetime, and report results such as the net present value, the
CAPITAL EXPENDITURES
internal rate of return, the debt service coverage ratio, and
A financial analysis defines the capital expenditures as the the payback period.
total investment costs needed to procure the biomass plant,

The investor or lender will determine the project’s financial The higher this ratio is, the lower the risk of the lender. To
performance, based on the following financial ratios: be confident that the investor or project owner can repay
his debt, financial institutions (lenders) will demand that the
NPV: The net present value is a measure of profitability used DSCR is larger than one (1) by a certain margin.
in corporate budgeting to assess a given project’s potential
return on investment. The NPV is the difference between Payback period: This is the period necessary to earn back the
the present value of cash inflows and the present value of initial capital investments. The shorter the payback period,
cash outflows. Due to the value of time, the NPV takes into the stronger the financial viability of the project.
account the discount rate (here the WACC) over the lifetime
of the project, thus presenting the annual cash flows in Net Operating Income
———————————————-
present values. Total Debt Service
The interest rate applied for calculating the NPV is the

The case example in Box 13–1 presents the methodology
WACC. The NPV is calculated using the following formula:
approach and the results of a financial analysis.
NPV (i,N) = ∑—(1———–—

t=0
Ct
+ i) t
13.2 ECONOMIC ANALYSIS OF BIOMASS-TO-
ENERGY PROJECTS
Where A financial analysis does not cover all costs and benefits from
i = Financial discount rate (WACC) a biomass project. This section elaborates the economic effect
t = Time
to society from biomass projects and provides investors and
Ct = Net cash flow at time t
authorities with the necessary welfare economic perspective
N = Total number of time periods
before final approval and implementation.
A NPV of zero (0) implies that the return on the investment

An economic analysis is usually conducted based on
equals the WACC. Therefore, a negative NPV can be found
a request from the public authorities (for example, in
for a project with a positive return, but where this return is
connection with an investment grant request), to provide
lower than the investor’s required return.
knowledge about the impacts that the project will have
on society. The importance of this type of analysis varies
IRR: The internal rate of return is a measure used for
significantly with the project size.
assessing the profitability of potential investments. The
internal rate of return is the discount rate that makes the net
• Smaller biomass projects in developing countries,
present value of all cash flows equal to zero.
decoupled from the national grid, will have mainly a
local economic impact. The social and environmental
LCOE: The economic levelized cost of electricity is an
impacts also are of local scale.
economic assessment of the cost of the energy-generating
system including all the costs over its lifetime: initial • Larger biomass projects, connected to national energy
investment, operation and maintenance, cost of biomass, grids, will have a bigger economic impact on society as
cost of capital. The LCOE is calculated as the NPV of all a whole. The larger amounts of biomass applied in the
costs divided by the NPV of electricity generation, and is the project, the larger the environmental and potentially
price per unit of energy that causes the project to break even. social impact.
An economic analysis estimates the net benefit of the

DSCR: The debt service coverage ratio is the ratio of cash
project by incorporating all benefits and costs, including
available for debt servicing to interest, principal, and lease
external effects, which are quantified and expressed in
payments. The DSCR is a measurement of an entity’s ability
monetary terms. The following section elaborates the general
to earn enough cash to cover its debt payments.

Box 13-1: Example Case of Financial Analysis (Fictional Data)
A cooperation of farmers in Kenya produces 15,000 tons of corn residuals and 30,000 tons of wood residuals per year.
This case exemplifies the financial analysis of an investment in a medium-scale conversion plant with a grate boiler.
Assumptions
Transport costs are not included in the analysis.
Electricity is sold at $0.20 per kWh, whereas the process heat is used at a local industry, saving them $0.06 per kWh.
The plant constructed has an annual capacity of 50,000 tons of biomass and an energy production capacity of 120,000
gigajoules (output).
The project is financed with equal parts of debt and equity raised by the cooperation of farmers. The debt has an interest rate
of 12 percent, a 1 percent financing fee, and a maturity of 10 years. The required return on equity is assumed to be 15 percent.
Results
The financial result of the project is a net present value of $77 million with an internal rate of return of 28 percent.
The simple payback period of the project is slightly more than five years.
The energy conversion reduces the carbon dioxide emission from other energy production, corresponding to 65,000 tons
of carbon dioxide.
Calculation of LCOE
The NPV of the total costs of the project
amount to $120 million and a discounted
electricity output of 283 million kWh. The
LCOE where the project NPV breaks even is
therefore $0.018 per kWh of electricity.
Source: COWI.
assumptions of an economic analysis and draws parallels to as these costs do not add to economic productivity and are
the financial analysis. A case example illustrates a practical merely transactional.
application of an economic analysis.
13.2.1 METHODOLOGY AND KEY ASSUMPTIONS

Typical benchmarks for key financial parameters in
Table 13-1 presents the overall assumptions for an biomass projects:
economic analysis. Internal rate of return on the project: > 10 percent

Net present value of the project: > 0 percent, dependent on
As mentioned, an economic analysis estimates the net benefit the risks related to the project
of a project to society, meaning quantifying effects occurring Payback period: < 10 years
locally, nationally, and globally over the project’s entire Debt service coverage ratio: 1.2 to 1.5
lifecycle. It evaluates the effect of the project using economic The above-mentioned estimates are generalized results
and will differ across borders and project-specific
opportunity costs or shadow prices.
conditions. Domestic benchmarks for these criteria often
depend on the economy’s underlying interest rate, country
When performing an economic analysis, the financial costs risk, and general level of economic development and are
are not included and neither are taxes, tariffs, subsidies, etc., subject to changes over time.

the local area at all. The potential positive and negative local
Table 13-1: Assumptions for Economic Analysis
effects of a biomass project are as follows:
Scope Assumptions
Analysis perspective State and/or national and community
perspective
Benefits:
Evaluation method Economic life of project, including

• A possible increase in income for local farmers as a result
decommissioning of local demand for biomass
Adjustment for Exclude inflationary effects; price changes
• A local source of stable energy from the biomass plant
inflation different from inflation can be included
(escalation)
• The creation of local jobs (either at the plant or in the
Project input Project inputs valued, using their
agricultural sector)
valuation economic opportunity costs, derived by
excluding taxes, tariffs, subsidies, etc. • Possible infrastructure improvements, such as grid
Discount rate Economic discount rate; real rate of connection or improved roads for biomass transport.
return (excluding inflation) that could
be expected if money were invested in
another project Costs:
Interest paid for Not included (financial cost) • Negative environmental effects due to emissions from plant
borrowed funds
during construction
• Social effects should be carefully considered. If the
biomass to be used for energy production is currently
Source: COWI.
used by locals for human consumption, animal
consumption, or income generation, removing the
The appropriate discount rate when performing an economic
biomass may cause social problems.
analysis is the rate of return of the entire economy, that is,
the national opportunity cost of capital. In comparison, PUBLIC ECONOMIC BENEFITS AND COSTS
the WACC applied in the financial analysis is only relevant
Biomass projects may have an impact on the macroeconomy,
to a specific investor, as the WACC calculation is based on
and can provide several other macroeconomic benefits, such as:
a single investor’s cost of equity and debt. The economic
discount rate is typically lower than the WACC.
Benefits:
• A stable energy supply
After identifying the costs and benefits at both the local and
national levels, the net benefits are estimated to assess the • Fewer subsidies for fossil fuels in public budget
project economic viability, as illustrated in Figure 13–3.
• Improved opportunities for industrial production, and
LOCAL ECONOMIC BENEFITS AND COSTS thereby job generation, due to the stable energy supply
A biomass project potentially can have important impacts • National increased security of energy supply, making the
on the local economy, or it might function without affecting country less dependent on import of foreign energy
Figure 13-3: Approach to Economic Analysis
Revenues
External Investment External
from Net benefits
benefits to costs and costs to
energy to society
society O&M costs society
production
Source: COWI.

• Reduction of greenhouse-gas emissions, as energy from presents the project’s net present value based on the
bio-waste implies less emissions compared to alternative estimated costs and benefits to society
fossil-based energy sources
Furthermore, the analysis should clearly present the
• More environmental benefits from reducing alternative
underlying assumptions such as the national discount rate
fossil fuel-based electricity generation
and project lifetime and report results such as the net present
• Reduced health costs and better overall air quality from value, the internal rate of return, and the cost/benefit ratio.
pollution externalities. The case example in Box 13–2 presents the methodology and
results of an economic analysis.
Costs:
• No negative environmental effects, unless primary As in the financial analysis, a project’s viability can be
biomass is used for energy generation. This would assessed using the following indicators:
undermine the sustainability of the project, causing
an overall global increase in greenhouse-gas emissions. • Economic net present value
• Negative economic effects: Capital expenditures and • Economic levelized cost of electricity
operation and maintenance costs, potential risk posed • Economic internal rate of return (the economic IRR
by foreign currency exposure to exchange rate volatility. should be compared to the economic discount rate,
not to the WACC as in the financial analysis)
13.2.2 RESULT AND OUTPUTS
• Economic cost/benefit ratio: The ratio should be larger
An economic analysis presents the project’s viability from
than one (1), indicating that the project’s benefits
society’s perspective over the project lifetime and given a
outweigh the costs.
series of assumptions, as presented in the previous section.
To evaluate a project’s economic viability, the analysis
Box 13-2: Example Case of Economic Analysis (Fictional Data)
A cooperation of farmers in Kenya produces 15,000 tons of corn residuals and 30,000 tons of wood residuals per year. This case
exemplifies the economic analysis of an investment in a medium-scale conversion plant with a grate boiler.
Assumptions
Value Over
Transport costs are not included in the analysis. Project Lifetime
Amounts (million dollars)
Electricity is sold at $0.20 per kWh, whereas
the process heat is used at a local industry, Investment costs 73.4
saving them $0.06 per kWh. The constructed
Operation and 44.7
plant has an annual capacity of 50,000 tons
maintenance costs
of biomass and an energy production capacity
of 120,000 GJ (output). Revenues from electricity 92.1
generation
The carbon dioxide quota price is $3.2 per ton.
Revenues from heat 66.1
The value of a job is equivalent to $10 per day. generation
Results Greenhouse-gas 167,000 tons 3.2
The net benefit of the project is an NPV emission reductions
of $45.2 million. (carbon dioxide-
equivalent)
Creation of local jobs 25 field workers 1.9
Net benefits 45.2
Source: COWI.

Source: COWI.
13.3 SENSITIVITY ANALYSIS Typical parameters exposed to sensitivity analyses

are the following:
A sensitivity analysis assesses the impacts of risks by varying
each risk parameter while all other variables remain constant.
• The investment costs
This approach will enable changes in the results of the
financial or economic analysis, indicating the importance of • The tariff levels (in case of feed-in to the grid without
specific risk parameters. Usually, the effects of input parameter a fixed-price power purchase agreement); these are
variations are observed through the following indicators: usually uncertain in the long term, as they are subject
to political decisions
• The internal rate of return
• The supply and price of biomass. The entire production
• The net present value of energy is based on the assumption that biomass is
available at a reasonable price. The biomass production
• The debt service coverage ratio.

depends on the weather and on the general development the economic analysis includes the overall costs and benefits
of the agricultural sector. to society, including the value of external effects.
• The electricity prices are important factors for the

Financial analysis uses the following parameters for
viability of the project, and they are formed by a
reporting the results:
fluctuating market. The electricity price is important
for the expected energy revenue. • Net present value
• Financial internal rate of return

13.4 CONCLUSION
• Financial levelized cost of electricity
The financial analysis assesses the project’s viability from
an investor’s perspective; the economic analysis assesses the • Debt service coverage ratio
viability from society’s point of view. The financial analysis
• Simple payback period.
includes the costs and benefits on a company level, whereas
Box 13-3: Example of a Sensitivity Analysis
The sensitivity analysis indicates that the project is relatively robust in response to small changes in the selected parameters.
However, if the project cannot connect to the electricity grid, a significant reduction in revenue would result.
1,000
500
Basis
High cost of biomass
0 High discount rate
NPV, millions
High investment cost

High O&M cost
Low cost of biomass
-500
Low discount rate
Low investment cost
Low O&M cost
-1000
-1500
40 MWe
Common pitfalls and issues to anticipate: Issues to consider when applying for financing
• Underestimating the time it takes to locate and secure • Factors affecting project cash flow (energy prices,
financing for the project security of biomass supply, costs of residual disposal,
technological risks, stability of regulatory regime
• Underestimating the importance of supplier agreements
including feed-in-tariffs)
and power purchase agreements when applying for
financing • Factors affecting asset values (increased stability of
primary production from enterprise, reduced risks of
• Assuming that the biomass is free. Once external suppliers
technological obsolescence, reduced pollution and
learn about the project, their bio-waste will gain a value.
environmental liabilities).

The results of the economic analysis are usually reported
through the following parameters:
• Net present value
• Economic internal rate of return
• Economic cost/benefit ratio
• Sensitivity analysis that presents the robustness

of results through variations in the input parameter.

Source: COWI.
146 Financing Biomass Projects

FINANCING BIOMASS PROJECTS
14
In the initial phases of a biomass project, the main activities of biomass-to-energy projects that should be considered
of the project developer relate to concept identification and before approaching a potential source of finance include:
technical prefeasibility studies, as illustrated in Figure 2–3.
However, when reaching phase 1.3 (Feasibility Study) of • A stable and sufficient supply of sufficient quality
project development, the developer will have to identify biomass is available within a reasonable distance.
sources of finance and initiate contact with them. The technical • The project is based on own-use of generated heat and
complexity of a project can often absorb much of the initial power or has easy access to grid connection or a large
focus of the project developer, but the difficulties of assuring the local user.
necessary financing should not be underestimated.
• The proposed technology is proven and suitable in the
The purpose of this chapter is to provide inspiration for the local circumstances.
project developer on how to identify and secure finance for • Capital costs and operation and management costs
his or her biomass project. are estimated.
Before initiating the search for finance, the project developer • The project lifespan allows for recovery of the
should bear in mind the following: investment.
• Environmental/social considerations are identified

• The process of acquiring finance can be time consuming.
and adequately mitigated.
• The technical, contractual, and permitting aspects
of a biomass project all affect the opportunities 14.2 TYPES OF FINANCING
for securing financing.
Each biomass-to-energy project is unique, but generally, a
• Project lenders will carefully assess all aspects of the project developer can choose to finance the project through
project, with specific attention to the risks involved. either corporate financing or project financing (Figure 14-1).
Therefore, attention to detail, risk mitigation, and The difference between corporate and project financing is
anticipation of lender concerns are very important. presented below, along with key issues to consider when
selecting a financing structure.
14.1 GENERAL FINANCING CONSIDERATIONS
• Corporate finance by sponsor: A sponsor or financial
A project developer is usually required to raise a significant
institution offers financing to corporations that will
amount of finance to realize a biomass-to-energy project. It
implement the biomass project and assume responsibility
is important to evaluate the available financing options early
for debt servicing, interest, and capital repayments. The
in the process, so that the project as a whole is structured
financial institution will evaluate the financial viability
accordingly. When applying for finance, the project developer
and the risks associated with the entire corporation, not
should have anticipated the concerns of the lenders, so the
only those aspects associated with the biomass project.
project structure and elements appear to be financial viable
The assets and cash flow of the entire corporation are
and robust, with low risks for the lender. Key characteristics
the lender’s main security for the loan (“full recourse”).

Figure 14-1: The Difference Between Corporate Finance and Project Finance
BIOMASS-TO-ENERGY PROJECT FINANCING
PROJECT FINANCE CORPORATE FINANCE
Cash Flow Projection
Is known before disbursement Less relevant
Control & Monitoring of Cash Flow
Very close Can be performed if needed
Collateral
The Biomass-to-Energy Project Non-project related collateral
Control over Collateral
Very close Not so tight
Leverage to Sponsor in case of multiple Biomass-to-Energy Projects
Enables multiple lending as only project Limited to sponsor’s other

assets are used as guarantee assets and wealth
Type of Financing
Non-recourse Recourse
Credit Risk
On Biomass-to-Energy Projects On sponsor’s other businesses’

cash flow (easy to estimate) cash flow (hard to estimate)
Start-up Financing
Yes No
Sources: IFC, 2015; COWI.
This approach requires a strong balance sheet and no interest rates. If the project developer is a large corporation
competition for CAPEX for other purposes. with solid financing, it may be able to get much lower rates
by accepting corporate finance than standalone project
• Project finance by investor(s): The focus of the financial
financing. These differences in rates could make a large
institution here is the viability of the specific biomass-
difference in the project’s financial viability.
to-energy project, because the project will rely mainly
on project-generated cash flow to cover the borrower’s
Selecting an appropriate source for financing biomass-
obligations (non-recourse or “limited recourse”). Under
to-energy projects is dependent on the project’s financial
this scheme, project assets will serve as collateral to
robustness and viability, the project size, and the project
reduce lender risks.
risks. Figure 14–2 illustrates how project size and financial
The difference between corporate and project finance is viability relate to the choice of financing.
furthermore expressed through a possible difference in

Figure 14-2: Financial Viability
High
Project Project Public finance may

financing financing be the only option
possible may be possible
with enhancement
Capital
investment
May be too large for
concessions and too small for
Corporate
cost-effective credit enhancement
financing
possible
Concessionary/grant finance may
be available
Low
High Financial viability Low
Source: IFC, 2015.
Besides financial institutions, other external investors may be could be providing capital, while assuring their long-term
an option for the project developer. The following presents commitment to supplying high-quality biomass.
the three most common external investors:
• Build–Operate–Transfer (BOT): A Build–Operate–
Transfer contract transfers the task of designing, building
• Investment by technology supplier: Technology suppliers
infrastructure, financing, and operating the plant for
have an incentive to promote the use of their technology.
a fixed period (for example, 20 years) to a third party
Therefore, they sometimes are willing to provide the
(BOT contractor). During the contract period, the BOT
necessary capital/loans to the developers.
contractor will collect all project-generated revenue,
• Investment by biomass suppliers: The suppliers of which should be sufficient to provide a reasonable
biomass have an interest in promoting the project. They
Box 14-1: Sources of Financing
There are many different ways of securing financing for a biomass project. The most common ways are described below, along
with a brief assessment.
Own Equity: Must be able to ensure a reasonable return on investment, but also should take into account the overall benefits
•
to the owner (for example, the use of biomass from existing production).
Bank loans: International commercial banks, local banks, and development banks or multilateral financing institutions (for
•
example, IFC, KfW, EBRD, ADB, AfDB, IDB, EIB, Green for Growth Fund). Financing through commercial banks often entails
high interest rates, whereas development banks may offer interest rates that are more favorable.
Investment by technology supplier: As the technology supplier has interests in seeing the project development succeed,
•
the technology supplier may be willing to offer loans at interest rates lower than the banks can offer.
Investment by biomass supplier: Biomass suppliers could typically be cooperatives of farmers or biomass processing companies
•
with significant bio-waste amounts. The chance of being able to sell their bio-waste provides an incentive for the suppliers to
contribute to the success of the project, for example by providing capital as investments or loans at reasonable rates.
Build–Operate–Transfer: In a Build–Operate–Transfer framework, a third party (BOT contractor) takes responsibility for
•
financing, designing, building infrastructure, and operating the plant for a fixed period.
Private equity funds: Capital for private equity is raised from retail and institutional investors, and can, for example, be used
•
to fund new technologies. The majority of private equity funds consist of institutional investors and accredited investors,
who can commit large sums of money for long periods of time.
Source: COWI.

profit and justify the risks assumed. When the concession 14.2.1 KEY PLAYERS
agreement ends, the BOT contractor transfers the biomass
It is important for the project developer to have the full
plant back to the owner without further remuneration.
overview of the different stakeholders and their contractual
• A project developer should not underestimate the relations. The following section explains the role of the
difficulty of raising finance on reasonable terms for a different stakeholders in the financing structure.
biomass-to-energy project, especially project developers
with no previous experience from similar projects or with Figure 14–3 presents the key project players, the finance
limited resources. structure, and the most necessary contracts essential for a
reliable project, and thus a prerequisite for obtaining loans
• Developers who find that they have a potentially viable
from financial institutions.
project, but one that they will not be able to exploit
with their own resources, could consider co-developing When securing finance for the project, the project developer
the project with a stronger partner that is better able must be able to present a financially solid project. Figure 14–3
to raise the required finance. illustrates the organizational setup and the corresponding
agreements necessary to present a solid project case.
Figure 14-3: Setup and Agreements
Banks
External Equity for
providing
investors project
loans
Dividents and Return on Principal

interest investment and interest
Financing
contract
Own Capital Capital Capital

Own energy
biomass
consumption
on site
Biomass supply
biomass and power
agreement
suppliers O&M customers
contract PPA
Consultant Plant
contract construction
contracts
O&M contractor Insurance

Consultants (if outsourced) EPC contractor
company
Sub
contractors
Equipment Civil
supplier constractor
Source: COWI.

• The project owner: The majority stakeholder is usually electricity to the national grid under feed-in tariff
the main sponsor who is leading the project. For schemes, which guarantee a fixed price. The consumer’s
biomass-to-energy projects, private investors often are creditworthiness is crucial for the financial robustness
the sponsors. of the project.
• Banks: The source of finance for this type of project is • Biomass suppliers: The supplier of biomass can be the
normally a financial institution. Lenders are typically project owner, who has available bio-waste to use as
international commercial banks, local banks, and free fuel for energy production. Alternatively, it could
development banks or multilateral financing institutions be external biomass suppliers (such as cooperatives of
(IFC, KfW, EBRD, ADB, AfDB, IDB, EIB, GGF, farmers in the region or the local biomass processing
among others). industry) who have excess bio-waste that they are
willing to sell.
• Energy consumers: The energy consumer is usually a
national or regional power utility. The energy also could • Contractors: During the project construction phase,
be sold directly to a local end-user under a bilateral contractors and equipment suppliers are the primary
agreement, or used for own-consumption by the project focus of the project developer. The contractors are
owner. Typically, biomass-to-energy plants will sell
Source: COWI.

responsible for delivering a fully functional plant 14.4 CONCLUSION
to the project developer within the agreed time.
Finding and acquiring finance for a biomass project is a
• Operating company: If the project company will not complex procedure, which requires professional handling of
be responsible for the operation and maintenance the following factors:
of the plant, an agreement with an operating company
must be undertaken. The operating company could, • Identifying the appropriate financing approach
for example, be the owner, the EPC contractor, • Identifying the key players
or a third party.
• Identifying and mitigating the project risks (biomass
• Insurance company: Insurance is essential both during availability and energy market security).
construction and in the operation phase, covering:
The most common sources of financing are:
• Construction phase—construction risks (for
example, accidents, delays), environmental,
• Bank loans, from international commercial banks, local
social, and political risks.
banks, and development banks or multilateral financing
• Operation phase—operation and maintenance institutions (for example, IFC, KfW, EBRD, ADB, AfDB,
risks (operational failures), environmental and
IDB, EIB, GGF).
political risks, late or non-payment from energy
customers, and transfer risks. • Investment by technology suppliers, who have an
incentive to promote the use of their technology and thus
Based on the risk information presented above, the
might be willing to provide the necessary capital/loans to
importance of risk mitigation becomes clear. The following
the developers
section describes different risk mitigation measures for a
biomass-to-energy project. • Investment by biomass suppliers, who have an interest in
promoting the project. They could be providing capital,
14.3 MITIGATING RISK while assuring their long-term commitment to supplying
high-quality biomass.
The risks related to a biomass-to-energy project should, as
best as possible, be mitigated, both to reduce the risks of the • Build–Operate–Transfer. In a BOT contract, a third party
project company and to demonstrate to financial institutions (BOT contractor) takes the task of designing, building
that the project is financially robust. Because financial infrastructure, financing, and operating the plant for a
institutions are risk-adverse, unmitigated risks will decrease fixed period.
the attractiveness of the project to lenders. If project risks
• Private equity funds, where a group of investors makes
are too high, external financing might not be feasible.
combined investments in a biomass-to-energy project.
If risks are mitigated, the lender’s required interest rate

should be lower than if the risks remained unattended.
Mitigation measures vary depending on the type of
risk. Therefore, financial modeling, including sensitivity
analysis, should be performed to reveal the effects of the
risks identified. Early engagement with potential financing
partners will facilitate the later access to finance, as it
may identify issues that are better addressed upfront in
the project design. Table 14–1 presents the key risks for
a biomass-to-energy project as well as suggestions for
mitigation measures.

Table 14-1: Assumptions for Economic Analysis
Risk Mitigation Strategy
Biomass availability The project company should own the biomass resource, thereby controlling the supply, or
biomass supply contracts with external suppliers should be in place.
Energy offtake security If the project company cannot utilize the power, a power purchase agreement with, for
example, a power utility company, should be in place.
Construction costs To mitigate the risks of exceeding the planned construction costs, a high-quality feasibility
study should be conducted in advance, as illustrated in Figure 2–3 in Chapter 2.
Operational performance To ensure that the plant operates as expected, the project developer should choose a
proven technology and reliable suppliers under best-practice contracts.
Financial viability To ensure financial viability, the security of biomass supply at a known and reasonable
price must be in place, as should the security of energy sale at a known and reasonable
price. A way to secure a fixed price for the energy is via feed-in tariffs.
General political risk The risks of shifting political focus could be reduced by partial risk guarantees.
Sector-specific regulatory risks Government endorsement of biomass-to-energy projects has great importance if the
projects’ financial viability depends on, for example, subsidies or feed-in tariffs. The
government may eventually change the regulation retroactively, thus affecting signed
power purchase agreements. The developer should assess the sustainability of the
regulatory framework and the energy customer’s ability to pay.
Environmental and social risks To avoid environmental and social risks, international best practice should be adopted,
and these aspects should be covered in a high-quality feasibility study.
Source: COWI.

Source: COWI.
154 Environmental and Social Considerations

ENVIRONMENTAL AND SOCIAL CONSIDERATIONS
15
This chapter introduces and provides a methodology for Biomass provides an alternative to fossil fuels, and biomass-
screening and assessing environmental and social (E&S) risks to-energy projects often are implemented at least in part due
and impacts. Guidance on this topic also can be found in IFC to possible greenhouse-gas benefits. However, a number of
Performance Standard 1 on Assessment and Management social and environmental issues should be examined when
of Environmental and Social Risks and Impacts (IFC, 2012) biomass is considered as a source for energy generation,
(see Section 6.2.6) and in Performance Standards 2 through and their negative and positive consequences on affected
8 (and the associated Guidance Notes), which are an communities and other stakeholders should be assessed.
integral part of IFC’s Sustainability Framework and define
developers' responsibilities for managing their environmental The use of biomass for energy generation can impact the local
and social risks. environment, for example by affecting air quality, biodiversity,
habitats and ecosystems, and water quantity and quality, and
This chapter guides the reader through the screening of E&S by changing the local use of land. Social impacts also may arise,
issues that potentially could arise from a biomass-to-energy notably by affecting local community livelihoods (for example,
plant, and therefore is a resource for developing all the access to and use of land and resources), food security, and
required E&S assessments. economic parameters such as employment and poverty.
Box 15–1 presents a brief example of such potential impacts.
Box 15-1: Examples of Environmental and Social Impacts of Biomass Projects
A biomass plant project is developed to use agricultural residues, such as straw, for electricity production. This could have
a number of environmental impacts, such as:
• Air quality: Emissions from combustion of bio-residues can lead to air pollution.
Nutrients: Removal of residues from the agricultural ecosystem can lead to depletion of nutrients in soil if the ashes are
•
not returned to the soil.
Biodiversity: If demand for residues increase beyond supply, new agricultural areas can be created from conversion of,
•
for example, wetlands, shrub land, or forest, which can negatively impact biodiversity.
Water: Both water quality and quantity can be affected, for example by discharge of wastewater or increased use of
•
groundwater for production of biomass.
Land: If only secondary resources are used, local impacts on land are probably small. However, if other users already utilize
•
the feedstocks, environmental consequences could arise if these users pursue other feedstocks.
A number of social consequences also can arise from the development of biomass plants, such as:
• Employment: The bioenergy plant can generate employment in the region.
• Economy: The plant can benefit the local economy.
Food security: Depending on existing uses of the feedstock, potential food security issues can arise if food or feed crops
•
are used for energy generation.
While not exhaustive, this list provides a brief overview of potential impacts and shows that a number of these
(positive and negative impacts) should be considered when developing biomass projects.
Source: COWI.

The scale, timing, and magnitude of these impacts are always 15.1 ENVIRONMENTAL SCREENING OF THE
context specific and highly dependent on the local conditions BIOMASS RESOURCE
and the type of biomass. As a starting point, however, The process of identifying, prospecting, and procuring
one can assume that biomass projects relying on primary biomass entails a number of environmental issues that
resources (for example, biomass harvested for energy should be screened for. Some of these are off-site relative
purposes, such as round wood or food crops) often result in to the plant and take place in the project area of influence,
more severe environmental and social impacts. including fields, forests, or watercourses that are supplying
or will supply biomass to the project. Table 15–1 gives an
This section provides an overview of environmental and
overview by providing a number of guiding questions to
social risks and impacts that can arise from the use of
help in identifying potential issues for further investigation.
biomass for energy. The section covers:
The screening should take into consideration a number
• Water
of biogeographical and climatic aspects, although these
• Biodiversity will differ depending on the type of biomass or feedstock
(primary, secondary, or tertiary). Once the types of biomass
• Soil and land
involved are identified, each biomass type should be screened
• Air quality on its own using the table.
• Food security
The questions are structured around four main topics: water,
• Community development biodiversity, soil and land, and air. After using the table to
• Energy security and access identify potential issues based on the type of biomass and
relevant topics, the subsequent sections of the guidelines
• Gender
are aimed at guiding further investigations. Each question
• Employment, wages, and income provides examples of potential issues and mitigation actions.
The purpose of the topic-based screening is to sort out issues
• Greenhouse gases.
Tools Available and Reporting

Seeking co-financing for a biomass project from international financial institutions such as IFC will require an Environmental
and Social Impact Assessment (ESIA). The ESIA assesses the potential environmental and social risks and impacts that are likely
to arise from the activities of the project. The ESIA is the framework for screening and understanding environmental and social
aspects of the project.
Some tools already exist for project developers who are interested in gaining further information on a framework for
environmental and social screening. These tools include guidance for project developers on the typical environmental and social
issues pertaining to biomass projects and on the process of assessing them and identifying mitigation measures.
Relevant policies and tools:
IFC Performance Standards: Environmental and Social Performance Standards and Guidance Notes define IFC clients’
•
responsibilities for managing their environmental and social risks. Available at: http://www.ifc.org/wps/wcm/connect/Topics_
Ext_Content/IFC_External_Corporate_Site/IFC+Sustainability/Our+Approach/Risk+Management/Performance+Standards/.
Equator Principles: A risk management framework, currently adopted by 83 financial institutions in 36 countries, covering 70
•
percent of international project finance debt in emerging markets. The principles are used to determine, assess, and manage
environmental and social risk in projects, primarily intended to provide a minimum standard for due diligence to support
responsible decision making. Available at: http://www.equator-principles.com.
Bioenergy Decision Support Tool: Planning Strategically and Assessing Risks in Investment Choices, developed by UN-Energy,
•
the UN Food and Agriculture Organization, and the UN Environment Programme.
Available at: http://www.bioenergydecisiontool.org.
RASLRES Bioenergy Tool, developed by the EU European Regional Development Fund. Available at: http://www. raslres.eu/.
•
Note that this tool is developed for the Nordic region and is mainly applicable in similar settings.

that should be assessed in detail as part of the Environmental 15.1.1 WATER
and Social Impact Assessment (ESIA).
With unsustainable use of water remaining a threat to
environment and human development alike, the use of water
The issues for consideration given below are not exhaustive
for bioenergy projects must be sustainable and must not
and may not be relevant in all projects. As indicated, they
compromise water quality and quantity.
should serve as guidance during the phase of preliminary
screening of environmental issues.
Table 15-1: Environmental Aspects

Primary Secondary Tertiary
Questions Concerning Environmental Aspects Feedstock Feedstock Feedstock
Water Will the use of water for bioenergy production or conversion of feedstock impact
water availability or security of supply in the watershed?
● ● ●
Will the use of water for bioenergy production or conversion of feedstock affect
water quality, use, or discharge?
● ● ●
Will the use of water for bioenergy production or conversion of feedstock change
stream or river flows and water availability for downstream users?
● ● ●
Ecosystems Will the biomass project affect rare or threatened species? ● n.a. n.a.
and
Will the biomass project affect threatened ecosystems or habitats, for example
biodiversity
through degradation, conversion, loss, or fragmentation?
● ● n.a.
Will the biomass project lead to introduction of non-endemic and/or invasive species? ● ● n.a.
Will the biomass project affect or change ecosystem services

in the area, including:
• Provisioning (for example, food, wood)
● ● ●
• Regulating (for example, protection against flood, droughts)
• Supporting (for example, water purification, cycling of nutrients,
primary production)
Will the biomass project affect or change cultural sites
(for example, religious services, recreation and tourism, education)
● ● ●
Soil and Will the biomass project lead to the conversion of land uses, such as the conversion
land from forest to agricultural land, to meet demand for the bioenergy feedstock ● n.a. n.a.
resources selected for this project?
Will the anticipated changes in land management, use, or intensity that are needed
to produce biomass or feedstock for the project affect neighboring or more distant ● ● n.a.
lands or landowners?
Will bioenergy production affect soil quality or lead to degradation of soil and land? ● ● ●
Is artificial fertilizer and/or manure needed to grow the feedstock in sufficient
quality and quantity? If so, their use, and discharge to the land and water, should be ● ● n.a.
monitored in order to avoid negative environmental effects.
Air Will production, conversion, or transport of the feedstock cause emissions of
chemical air pollutants, such as nitrogen oxides, particulate matter, sulfur oxides, ● ● ●
ozone, aerosols, soot, or volatile organic compounds?
Will production, conversion, or transport of the feedstock cause emission of physical
air pollutants, such as smell and odorous emissions, thermal heat, or radiation?
● ● ●
Will production, conversion, or transport of the feedstock cause emission
of biological air pollutants, such as pollen, fungi, or bacteria?
● ● ●
Source: COWI.

• Will the use of water for biomass production or
feedstock conversion affect water availability or security Mitigation Measures for Impacts on Water
of supply in the watershed? Water impacts generally concern quantity and quality, and
mitigation measures should be taken to minimize impacts
• If additional or new irrigation is needed to produce the on both aspects. These can be incorporated throughout the
bioenergy crop, a local water balance should quantify supply chain, from production of biomass to conversion and
how the project impacts local water resources. utilization.
Production stage
• If biomass or feedstock producers that are connected
to local water distribution networks plan to increase Some crops consume significant amounts of water, and
thus selection of bioenergy feedstock should be matched
their water use, the impact on security on water
to geoclimatic conditions (for example, available water
supply may be substantial and should be assessed.
resources and rainfall patterns). Lack of water also can
be mitigated by more efficient irrigation if this is needed
• Will the use of water for production of biomass or
(for example, drip irrigation) or by harvesting rainwater.
conversion of feedstock affect water quality? Minimizing fertilizer and pesticide use can mitigate
impacts on water quality, which can be complemented by
• Consider, for example, if production of the crop
practicing mixed production systems (for example, double
drives changes in land management, clearing of land, cropping). Finally, excess irrigation can lead to the runoff
or removal of trees. If so, there may be a risk of of salts, fertilizers, and pesticides and can pollute surface
loss of topsoil through erosion, which could end up waters, and thus should be monitored closely.
having an impact on streams and rivers. Conversion stage
In many cases, substantial amounts of water are needed to
• If additional or new fertilizers or pesticides are convert the feedstock to bioenergy; as such, the decision
to be used, this may have implications for water on the end product used should take into account water
quality. Consider both groundwater and surface availability. At the plant, cleaner production technologies
water resources. should be considered, such as plant water recycling or on-site
physical, chemical, and biological treatment of wastewater.
Finally, natural systems for wastewater treatment, such as
• If the biomass or feedstock producer will use
the construction of wetlands, can be considered.
additional or new water resources because of the Sources: UNEP, 2009; UNEP et al., 2011; UNEPa, n.d.
project, the capacity and quality of local water
treatment systems should be evaluated and taken
into account in the design. non-living environment interacting as a functional unit.”
Ecosystem services are the benefits that humans obtain
• Will the use of water for biomass production or from ecosystems. Such ecosystem services, including water
feedstock conversion change water flows and water purification, pollination, food, and protection against floods
availability for downstream users? and droughts, are important for humans, human livelihoods,
• If any streams, pipes, or reservoirs are impacted and development. The expansion of agriculture or the use of
or changed because of biomass or feedstock natural resources for bioenergy can risk compromising some
production, this could affect local water supply. of these services, and the impact on these services must be
considered when developing biomass projects.
If the answer to any of the above questions is “yes” (also
summarized in Table 15–1) one or more issues of concern Similarly, development of bioenergy can have adverse impacts
will need further investigation and assessment. on biodiversity by causing habitat loss, fragmentation of
areas, and loss of species. Biodiversity not only has value
15.1.2 ECOSYSTEMS AND BIODIVERSITY
as a provider of services to humankind (for example, food,
An ecosystem consists of all living things—from plants medicine, religious), but also has value in itself. Furthermore,
and animals to microscopic organisms—that share an diverse, connected, and well-functioning habitats are most
environment. The Convention on Biological Diversity resilient against external threats such as climate change
defines “ecosystem” as a “dynamic complex of plant, or pollution. Therefore, it is important that the impact on
animal and micro-organism communities and their

biodiversity from the development of bioenergy is assessed, • If land is cleared for cultivation, there is a risk
and, as needed, prevented or mitigated and minimized. that ecosystems or habitats can be lost or
fragmented, which can have adverse impacts
• Will the biomass project affect rare or threatened species? on species in those regions.
• The risk to any rare or threatened species should • Intensification of production, loss of nutrients,
be assessed. This is particularly critical if natural or excessive pollution can lead to degradation of
habitats (forests, wetlands, etc.) are modified or if natural habitats surrounding the project area.
production is intensified on currently farmed areas.
• Will the biomass project lead to the introduction of non-
At the global level, rare or threatened species are
native and/or invasive species?
listed on the IUCN Red List of Threatened Species,
which can be accessed at: http://www.iucnredlist.org. • The risk of invasive species should be considered in
Consideration of regional-level lists of threatened those situations where non-native flora (such as a
species should also be included in the assessment. new energy crop) is introduced to the region.
• Will the biomass project affect threatened ecosystems or • Will the biomass project affect or change ecosystem
habitats, for example through degradation, conversion, services in the area?
loss, or fragmentation? • Ecosystem services comprise a host of different
services, and modifications to natural landscapes
generally put one or more of these at risk.
Mitigation Measures for Impacts on Biodiversity It is therefore necessary to assess for impact
Biomass projects can affect biodiversity and ecosystem on ecosystems.
services in numerous ways.
• Care should be taken that ecosystem services that
Production stage provide vital services to the region are not put at
Primary biomass sources, and to some extent secondary risk (for example, protection against flood or water
biomass sources, can greatly affect biodiversity and purification performed by mangrove forests).
ecosystem services through the conversion of natural
areas to agriculture. Therefore, such conversion should be • Ecosystem services are often not part of the formal
avoided to minimize risk of biodiversity loss. This includes economy (that is, the value provided by these services
avoiding any significant impact on rare, unique, endemic, or is not valued in economic terms), but they provide
geographically restricted species or habitats, and minimizing
important functions for the local region and the
overall impact on the area by reducing the size of area
impacted or by focusing site activities in less-sensitive areas. affected communities. Care therefore should be taken
Impact over time also can be reduced by preserving and to ensure free, prior, and informed consultation and
maintaining buffer zones of local vegetation, while loss of participation by the affected communities.
ecosystem services can be compensated by considering
the use of stakeholder engagement approaches to help It also should be ensured that those ecosystems that are of
identify locally preferred or important services. Finally, special importance to cultural services (such as religious
valuing the key ecosystem services in the affected area can
help to safeguard them, even if this is merely a screening areas or tourism) are not compromised, as this would affect
and accounting exercise without any actual transfer of the livelihood of local stakeholders.
money. Nutrient leakage and the use of pesticides, fertilizers,
and other chemicals should be appropriately managed to
If the answer to any of the above questions is “yes,” one
avoid negative impacts on flora and fauna, as should using
genetically modified organisms (GMOs) and introducing or more issues of concern will need further data collection
feedstocks that can be considered invasive species, as these and assessment.
can pose a threat to biodiversity and ecosystem services; any
use of these should be closely followed.
15.1.3 SOIL AND LAND RESOURCES
Conversion stage
Land use denotes the use of land for a particular purpose,
Correct treatment of effluents (through physical, chemical,
and biological treatment) can minimize impact on the local such as infrastructure, agriculture, or forest. Because land
environment and biodiversity. is a scarce resource, its use becomes important for social,
Source: UNEPb, n.d.
environmental, and economic reasons. Sustainable use of

productive areas is important for food production and • Will anticipated changes in the land management, the
for the delivery of a range of ecosystem services, such as use of the land, or intensified use of the land to produce
purification of water, carbon storage, protection against biomass or feedstock for the project affect neighboring or
erosion, and as habitat for plants and animals. more distant areas or landowners (for example, if current
production shifts to other lands)?
Given population and economic growth, additional food,
• If the project entails increased demand for a primary or
energy, and resources will be needed in the coming decades,
secondary biomass in the host region, landowners may
making sustainable and intensive use of land resources shift from food or feed crops, resulting in decreasing
necessary. Therefore, use of feedstocks for bioenergy supply of these. This may lead to the conversion of
generation should take into account impacts on land. new land elsewhere to supplement the lost production.
In such cases, due care should be taken, and impacts
• Will the biomass project lead to the conversion of land on supply and demand in the region should be subject
uses, for example, the conversion from wetlands and/ to further analysis.
or forest to agricultural land, to meet demand for the • Will production of biomass affect the soil quality or lead
bioenergy feedstock selected for the project? to degradation of soil and land?
• If the project involves a call for suppliers in the local • Consider if the provision of biomass for the project
area, landowners may be enticed to change land entails changes in land management, for example,
use, for example by clearing shrub land or forests increased tillage or the use of heavy machinery. This
to make way for a plantation or other productive may impact the soil, possibly resulting in degradation.
land. In such cases, there could be risk of loss of
• When secondary biomass resources are used, soil
biodiversity and carbon.
degradation and loss of nutrients can occur if ash
• The sourcing of primary or secondary biomass or and other residues are not returned to the soil.
feedstock may cause a risk of land conversion. For
• If the project is linked to the production of cattle or
waste-based systems, this risk should be minimal.
other grazing animals, additional demand may lead
to farmers increasing the number of animals. This,
in turn, can lead to overgrazing, which in some areas
Mitigation Measures for Impacts on Soil and can cause erosion, and, in other areas, can start
Land Resources desertification processes.
Similar to agricultural production, biomass feedstock for
bioenergy production, whether primary or secondary, can • Are artificial fertilizers or pesticides needed in order to
lead to soil degradation if soils are not managed properly. grow the feedstock in sufficient quality and quantity?
Furthermore, effluents from conversion of biomass
feedstock can lead to pollution of the soil resource. • The use of fertilizers or pesticides may negatively
impact soil and water quality, soil productivity, and
Production stage
soil biodiversity.
Mitigation measures include no-till practices, use of cover
crops to avoid erosion and build soil organic matter, and If the answer to any of the above questions is “yes,” one
growth of different crops and use of manure or fertilizer to
or more issues of concern will need further data collection
ensure nutrient levels in soils and avoid depletion. Similarly,
planting of riparian buffer zones can minimize erosion and and assessment.
nutrient leakage to water bodies. No-till practices and
irrigation can help maintain soil moisture. Excess use of 15.1.4 AIR
pesticides, herbicides, and other chemicals can lead to soil,
groundwater, and surface water pollution. Clean air is important for humans, animals, and the
Conversion stage environment, and air pollution is detrimental for health
Adequate treatment of water effluents can minimize and food production, among others. Care therefore should
impact on soil resources, and waste disposal should not be taken to avoid air pollution from the production or
take place outside dedicated facilities.
conversion of feedstock for bioenergy production. Air
Source: UNEP et al., 2011; UNEPc, n.d.
pollution can be biological (pollen, fungi), physical (smell,

thermal, radiative), and chemical (ozone, nitrogen oxides, • If the feedstock is biological waste or if the digested
sulfur oxides) and could result from plant emissions and remains from biogas production are used on fields
changes of management practices (such as intensification) on as fertilizer, there may be risk of spread of bacteria
and pollutants.
agricultural land or in forests.
• If the feedstock is biological waste, then transport,
• Will production, conversion, or transport of the treatment, and storage must be organized so that
feedstock cause emissions of air pollutants, such as the risk of spreading bacteria is minimized.
nitrogen oxides, particulate matter, sulfur oxides, ozone, • Some agricultural systems, mostly where livestock
aerosols, soot, or volatile organic compounds? are involved, can spread spores, which in rare cases
may cause health risks if concentrations are high.
• Use of heavy machines or some types of trucks
for transport of biomass or feedstock (or other If the answer to any of the above questions is “yes,” one
necessary inputs) may result in pollutant emission. or more issues of concern will need further data collection
• Burning of field residues or waste at the biomass and assessment.
production site may lead to pollutant emission.
15.2 ENVIRONMENTAL SCREENING OF THE
• Will production, conversion, or transport of the
BIOMASS-TO-ENERGY OPERATION
feedstock cause emission of smell and odorous emissions,
thermal heat, or radiation? Environmental issues related to the operation of the biomass
plant itself, include, but are not limited to:
• If the feedstock for the project is manure, chicken
litter, or waste from food industry treatment, storage
• Odor
and transport of the feedstock may lead to nuisance
or pollution if not handled well. • Air pollutant (e.g., nitrogen oxides, sulfur oxides,
• Will production, conversion, or transport of the particulate matter) emissions from the stack
feedstock cause emission of biological air pollutants, • Wastewater and odor from storage of biomass
such as pollen, fungi, or bacteria?
• Wastewater from flue gas condensing
• Disposal of waste
Mitigation Measures for Impacts on Air Quality • Noise emission

Growth and subsequent conversion or combustion of
biomass feedstocks can have adverse impacts on air quality • Operational hazards (for example, risk of fire).
and should be minimized.
While sourcing of biomass rarely involves permitting, the
Production stage
building and operation of the biomass-to-energy installation
Spreading of manure can lead to odorous emissions and
usually does. Storage of feedstocks, and the entire supply
should be kept to a minimum of time over the year.
chain for a biological waste-based energy system, may
Conversion stage
also require permits that often relate to the environmental
Use of efficient trucks and minimization of transport
distances can reduce impacts. The facility should be fitted impact of the installation. Permits presume regulatory
with adequate abatement systems to ensure reduction compliance and are the basis for giving the license to
and removal of, for example, nitrogen oxides, sulfur oxides,
operate at all. Therefore, the screening and documentation
and other pollutants, as well as particles (particulate
matter) from air emissions. Combustion of some biomass of environmental issues should be an integrated part of the
feedstocks can lead to significant local pollution, such as permitting process.
soot particles and carbon monoxide. Efficient plants will
minimize these risks. Storage, transport, and treatment
should use adequate facilities to minimize the spread of
bacteria.
Source: UNEP, 2009.

15.3 SOCIOECONOMIC ISSUES • Central government authorities and ministries
Alongside environmental issues, the development of a • Representatives of regions, local governments, and
biomass project may entail social risks and impacts, regulatory bodies
especially on local communities affected by the project. This
• Nongovernmental organizations, including conservation
can include impacts on livelihoods, cultural heritage, access
organizations
to or ownership of land, and access to natural resources. It
may also require consideration of gender issues; child labor • Labor organizations, trade organizations, farmers
and vulnerable groups; and food security, especially in those groups, and community-based organizations
areas where food insecurity is endemic. Finally, it can include • Private sector, research agencies, universities, and
impacts on the economic well-being of the affected parties, consulting firms
including employment opportunities, income, and wealth.
• Financing institutions, small-scale finance providers,
In summary, issues to be examined include: and insurance companies
• Religious and cultural organizations.

• Food security
• Land acquisition, titling, and tenure

Guidance on SIAs
• Access to assets and natural resources A number of guidance and policy documents as well as
performance standards on social impact assessment
• Community health and safety (SIA) could be consulted before deciding if and how
to conduct an SIA. These include, for example, the
• Energy security and access International Association for Impact Assessment’s (IAIA)
2015 guidance document for SIA (IAIA, 2015), as well as
• Gender and vulnerable groups IFC’s Performance Standards on Environmental and Social
Sustainability (IFC, 2012).
• Labor issues, labor rights, employment, wages,
and income.
The following stepwise approach to a preliminary screening An example of guiding E&S questions can be seen on the
will allow the project developer to identify the resulting following pages in Table 15–2.
socioeconomic effects of sourcing the particular biomass
resource and constructing the plant. 15.4 GREENHOUSE-GAS EMISSION ESTIMATES
Estimation of greenhouse-gas benefits of a biomass-to-

The project developer should systematically screen for
energy project is based on existing IFC guidelines, as shown
socioeconomic issues linked to the type of biomass concerned
below, and is complemented, where relevant, with existing
(primary, secondary, tertiary), as the socioeconomic impacts
methodologies. These include the United Nations Framework
may vary depending on the feedstock type.
Convention on Climate Change Clean Development
Section 6.2 (Permitting) also includes a list of E&S issues Mechanism, the Intergovernmental Panel on Climate Change
specific to the site and the installation. Good Practice Guidance on Greenhouse Gas Reporting, and
the European Union Renewable Energy Directive (RED)
Adequate engagement with affected communities throughout methodology, as well as related tools, such as BioGrace-II.
the project cycle on issues that could potentially affect
them and to ensure that relevant environmental and social Following the approach in IFC Definitions and Metrics for
information is disclosed and disseminated should be actively Climate-Related Activities (June 2013), greenhouse-gas
sought and implemented by the project proponent. In emission reductions are calculated from a baseline scenario
addition to affected communities, a preliminary list of other (that is, the scenario that would take place had the biomass
potential stakeholders includes: project not been implemented). Figure 15–1 illustrates this.

Figure 15-1: Project Emission Reductionsa
CO2 emissions
Increase in
Leakage
Pre-project phase Baseline emissions

tCO2e
∆Upstream
CO2 emissions
∆Downstream
Decrease in
∆Operational
Project emissions
Source: IFC, 2013.

a The emission reductions are calculated from a baseline, which signify the emissions in the absence of the biomass project. The emissions are calculated as differences,
∆ (reductions or increases), in upstream, downstream, and operational emissions, between the baseline scenario and the biomass project, and any emissions resulting from
leakage. The total emissions reductions are given in tons of carbon dioxide-equivalent per MJ. Figure based on IFC (2013
As a general rule, all greenhouse-gas emission sources that 1. Upstream emissions

change due to the biomass project should be calculated,
2. Operational emissions
although those that are negligible can be excluded from the
calculation. The default calculation will be based on the 3. Downstream emissions
following steps: 4. Leakage.
Each of the steps of the value chain is associated with

emission of greenhouse gases. Therefore, the total emissions
of the project are equal to:
Project Emissions = Upstream Emissions

+ Operational Emissions
+ Downstream Emissions
+ Leakage
The total greenhouse-gas emission reduction achieved

because of the biomass project are equal to:
Greenhouse-gas reduction = Baseline Emissions

- Project Emissions
= ∆Upstream Emissions
+ ∆Operational Emissions
+ ∆Down-stream Emissions
+ Leakage
Source: COWI.

Table 15-2: Overview of Proposed Questions to Screen for Environmental and Social Issues on Biomass-to-Energy
Projects, based on IFC Performance Standards
Assessment and Management of Environmental and Social Risks and Impacts (PS1)
Introduction PS1 underscores the importance of identifying environmental and social risks and impacts, and managing
these according to an Environmental and Social Management System (ESMS) throughout the lifetime of a project.
ESMS entails a methodological approach to managing environmental and social risks and impacts
in a structured way on an ongoing basis.
Objectives • To identify and evaluate environmental and social risks and impacts of the project.
• To adopt a mitigation hierarchy to anticipate and avoid, or where avoidance is not possible, minimize and, where
residual impacts remain, compensate/offset for risks and impacts to workers, affected communities,
and the environment.
• To promote improved environmental and social performance of clients through the effective use of management
systems.
• To ensure that grievances from affected communities and external communications from other stakeholders are
responded to and managed appropriately.
• To promote and provide means for adequate engagement with affected communities throughout the project
cycle on issues that could potentially affect them and to ensure that relevant environmental and social
information is disclosed and disseminated.
Requirements • Conduct, if necessary in coordination with government agencies, a process of environmental and social
assessment, and establish and maintain an ESMS appropriate to the nature and scale of the project and
commensurate with the level of its environmental and social risks and impacts.
• The ESMS will incorporate the following elements:
• Policy
• Identification of risks and impacts
• Management programs
• Organizational capacity and competency
• Emergency preparedness and response
• Stakeholder engagement
• Monitoring and review.
Questions • Has a process for identifying the environmental and social risks and impacts of the project been established and
measures to ensure its implementation and maintenance enacted?
• Have all relevant stakeholders been identified and consulted in relation to project development? This includes
local, national, and international organizations that are likely to have an interest in the project.
• Have stakeholder expectations been clarified? Have areas where accidents and emergency situations may occur
been identified? Is there an emergency preparedness and response system/plan?
• Does the project negatively affect local communities in the project’s area of influence?
• How will potential conflicts be resolved? Is there a grievance redressal mechanism?
• Could the project cause migration or otherwise displace people?
Labor and Working Conditions (PS2)
Introduction PS2 recognizes that the pursuit of economic growth through employment creation and income generation should
be accompanied by protection of the fundamental rights of workers.
Objectives • To promote the fair treatment, non-discrimination, and equal opportunity of workers.
• To establish, maintain, and improve the worker-management relationship.
• To promote compliance with national employment and labor laws
• To protect workers, including vulnerable categories of workers such as children, migrant workers, workers
engaged by third parties, and workers in the client’s supply chain.
• To promote safe and healthy working conditions, and the health of workers.
• To avoid the use of forced labor.
Requirements • Implement policies and procedures relating to Working Conditions and Management of Worker Relationship,
Protection of the Work Force, Occupational Health and Safety, and Supply Chain considerations, including Terms
of Employment, Workers’ Organizations, Non-Discrimination and Equal Opportunity, Child and Forced Labor.

Projects, based on IFC Performance Standards (continued)
Labor and Working Conditions (PS2) (continued)
Questions • Have human resources policies and procedures been adopted and implemented?
• Is there freedom of association and do collective bargaining agreements exist and have these been respected?
• Could potential risks to worker rights arise due to the project?
• Have an appropriate engagement process and a grievance mechanism been implemented?
• Is there an occupational health and safety management system in place?
Resource Efficiency and Pollution Prevention (PS3)
Introduction PS3 recognizes that increased economic activity often generates increased levels of pollution to air, water, and land
and consumes finite resources in a manner that may threaten people and the environment at the local, regional,
and global levels.
Objectives • To avoid or minimize adverse impacts on human health and the environment by avoiding or minimizing pollution
from project activities.
• To promote more sustainable use of resources, including energy and water.
• To reduce project-related greenhouse-gas emissions.
Requirements • Consider ambient conditions and apply technically and financially feasible resource efficiency and pollution
prevention principles and techniques that are best suited to avoid, or where avoidance is not possible, minimize
adverse impacts on human health and the environment
• The principles and techniques applied during the project lifecycle will be tailored to the hazards and risks
associated with the nature of the project and consistent with good international industry practice.
Questions • Could the project development or activities necessary to support the project impact water use, electricity
consumption, sewage, and other services?
• Have alternatives and technically and financially feasible and cost-effective options to reduce project-related
greenhouse-gas emissions during the design and operation of the project been considered?
• Have direct emissions from within the physical project boundary, as well as indirect emissions associated with
the off-site production of energy used by the project, been quantified?
• Have measures that avoid or reduce water usage been implemented, so that the project’s water consumption
does not have significant adverse impacts on the local environment, including affected communities?
• Have measures to avoid the release of air pollutants and wastewater or, when avoidance is not feasible,
minimization and/or control of the intensity and mass flow of their release, been implemented?
• Have measures or technical installations to avoid the generation of hazardous and non-hazardous waste
materials been implemented?
• Has an integrated pest management approach, including the use of chemical pesticides, been formulated and
implemented? (Relevant only to projects using primary feedstock).
Community Health, Safety, and Security (PS4)
Introduction PS4 recognizes that project activities, equipment, and infrastructure can increase community exposure to risks
and impacts.
Objectives • To anticipate and avoid adverse impacts on the health and safety of the affected community during the project
life from both routine and non-routine circumstances.
• To ensure that the safeguarding of personnel and property is carried out in accordance with relevant human
rights principles and in a manner that avoids or minimizes risks to the affected communities.
Requirements • Evaluate the risks and impacts to the health and safety of the affected communities during the project lifecycle
and establish preventive and control measures consistent with good international industry practice.
(continued)

Community Health, Safety, and Security (PS4) (continued)
Questions • Could the project negatively affect community social or human capital?
• Could production of the feedstock in question adversely affect local production of or access to food?
• Could utilization of the feedstock in question restrict or limit access to energy by local communities
and stakeholders?
• Could the project adversely affect women and girls?
• Could the project negatively affect disadvantaged and vulnerable groups?
• Could the use of the feedstock in question negatively affect local agricultural markets, and what are the impacts
of these changes?
• Will the use of the feedstock in question cause local food prices to increase?
• Could the use of the feedstock in question negatively affect poverty in the local area?
• Has the use of hazardous materials and substances been avoided or minimized to the extent possible?
• Could the impact of the biomass-to-energy project on local ecosystem services result in adverse health and
safety risks and impacts to Affected Communities?
• Has the community exposure to water-borne, water-based, water-related, and vector-borne diseases and
communicable diseases been avoided or minimized to the extent possible?
• Have preparations to respond effectively to emergency situations been made and procedures established?
• Could the project negatively affect economic growth in the region?
• Could the development of the project or the use of the feedstock in question negatively affect employment
in the region?
Land Acquisition and Involuntary Resettlement (PS5)
Introduction PS5 recognizes that project-related land acquisition and restrictions on land use can have adverse impacts on
communities and persons that use this land. PS5 does not apply to resettlement resulting from voluntary land
transactions (i.e., market transactions in which the seller is not obliged to sell and the buyer cannot resort to
expropriation or other compulsory procedures sanctioned by the legal system of the host country if negotiations fail).
Objectives • To avoid, and when avoidance is not possible, minimize displacement by exploring alternative project designs.
• To avoid forced eviction.
• To anticipate and avoid, or where avoidance is not possible, minimize adverse social and economic impacts
from land acquisition or restrictions on land use by 1) providing compensation for loss of assets at replacement
cost and 2) ensuring that resettlement activities are implemented with appropriate disclosure of information,
consultation, and the informed participation of those affected.
• To improve, or restore, the livelihoods and standards of living of displaced persons.
• To improve living conditions among physically displaced persons through the provision of adequate housing
with security of tenure at resettlement sites.
Requirements • Consider aspects related to Compensation and Benefits for Displaced Persons, Community Engagement, Grievance
Mechanism, Resettlement and Livelihood Restoration Planning and Implementation, and Displacement.
Questions • Can feasible, alternative project designs avoid or minimize physical and/or economic displacement, and have
these been considered?
• Are there risks of resettlement and use of land by stakeholders or affected communities due to project development?
• If so, has a Resettlement Action Plan that covers, at a minimum, the applicable requirements of this Performance
Standard, been developed?
• How is the impact on project-displaced persons monitored?
• Could access to or use of land by local stakeholders be affected by the use of the feedstock?
• Has ownership of land resources in the area from where biomass feedstock is procured been assessed?
• Could the project negatively affect access to or use of land by local stakeholders?
• Has a grievance mechanism consistent with Performance Standard 1 been established?

Biodiversity Conservation and Sustainable Management of Living Natural Resources (PS6)
Introduction PS6 recognizes that protecting and conserving biodiversity, maintaining ecosystem services, and sustainably
managing living natural resources are fundamental to sustainable development.
Objectives • To protect and conserve biodiversity.
• To maintain the benefits from ecosystem services.
• To promote the sustainable management of living natural resources through the adoption of practices that
integrate conservation needs and development priorities.
Requirements • Consider direct and indirect project-related impacts on biodiversity and ecosystem services and identify any
significant residual impacts
• Avoid impacts on biodiversity and ecosystem services. When avoidance of impacts is not possible, measures to
minimize impacts and restore biodiversity and ecosystem services should be implemented.
• If the project involves the utilization of primary biomass resources, certain requirements exist. These are specified
in paragraphs 26 through 30 of PS6. Further, if a project relies on purchasing primary production that is known to
be produced in regions where there is a risk of significant conversion of natural and/or critical habitats, systems and
verification practices will be adopted as part of the client’s ESMS to evaluate its primary suppliers.
Questions • Could the project directly or indirectly significantly convert or degrade natural habitats or ecosystems?
• Have relevant threats to biodiversity and ecosystem services, including habitat loss, degradation and
fragmentation, invasive alien species, overexploitation, hydrological changes, nutrient loading, and pollution,
been considered?
• Have the values (economic and otherwise) attached to biodiversity and ecosystem services by affected
communities and other stakeholders been taken into account?
• Have mitigation measures been designed to achieve no net loss of biodiversity and ecosystem services?
• Are there any critical habitats within the area, which the project will affect? Critical habitat areas and/or areas
with high biodiversity value, including: 1) habitat of significant importance to critically endangered and/or
endangered species; 2) habitat of significant importance to endemic and/or restricted-range species; 3) habitat
supporting globally significant concentrations of migratory species and/or congregatory species; 4) highly
threatened and/or unique ecosystems; and/or 5) areas associated with key evolutionary processes. If so, PS6
outlines a number of considerations that must be adhered to.
• Could the project intentionally or accidentally introduce alien, or non-native, species of flora and fauna into areas
where they are not normally found?
• If the project utilizes primary resources, has land-based agribusiness and forestry projects been located on
unforested land or land already converted?
Indigenous Peoples (PS7)
Introduction PS7 recognizes that Indigenous Peoples, as social groups with identities that are distinct from mainstream groups
in national societies, are often among the most marginalized and vulnerable segments of the population. The fol-
lowing section only applies of Indigenous Peoples are among the Affected Communities.
Objectives • To ensure that the development process fosters full respect for the human rights, dignity, aspirations, culture,
and natural resource-based livelihoods of Indigenous Peoples.
• To anticipate and avoid adverse impacts of projects on communities of Indigenous Peoples, or when avoidance is
not possible, to minimize and/or compensate for such impacts.
• To promote sustainable development benefits and opportunities for Indigenous Peoples in a culturally
appropriate manner.
• To establish and maintain an ongoing relationship based on Informed Consultation and Participation (ICP) with
the Indigenous Peoples affected by a project throughout the project’s lifecycle.
• To ensure the free, prior, and informed consent (FPIC) of the affected communities of Indigenous Peoples when
the circumstances described in this Performance Standard are present.
• To respect and preserve the culture, knowledge, and practices of Indigenous Peoples.
Requirements • Avoid adverse impacts on Indigenous Peoples and ensure participation and consent.
• If the project is located on, or seeks to commercially develop natural resources on lands traditionally owned by, or
under the customary use of, Indigenous Peoples, and adverse impacts can be expected, specific requirements apply.
(continued)

Indigenous Peoples (PS7) (continued)
Questions • Have all communities of Indigenous Peoples within the project area of influence who may be affected by the
project been identified?
• Where adverse impacts are unavoidable, have measures to minimize, restore, and/or compensate for these
impacts in a culturally appropriate manner commensurate with the nature and scale of such impacts and
the vulnerability of the affected communities of Indigenous Peoples been implemented?
• Has an engagement process with the affected communities of Indigenous Peoples (as required in PS1)
been undertaken?
• Are there circumstances requiring Free, Prior, and Informed Consent of the Affected Communities
of Indigenous Peoples?
• Have feasible, alternative project designs to avoid the relocation of Indigenous Peoples from communally held
lands and natural resources subject to traditional ownership or under customary use been considered?
Cultural Heritage (PS8)
Introduction PS8 recognizes the importance of cultural heritage for current and future generations.
Objectives • To protect cultural heritage from the adverse impacts of project activities and support its preservation.
• To promote the equitable sharing of benefits from the use of cultural heritage.
Requirements • To protect Cultural Heritage in Project Design and Execution.
Questions • Could the project negatively affect community cultural capital?
• By ensuring that internationally recognized practices for the protection, field-based study, and documentation
of cultural heritage are implemented, has cultural heritage been identified and protected?
• If the project site contains cultural heritage, have measures been taken to ensure continued access to
the cultural site?
Source: IFC, 2012.
15.4.1 BASELINE EMISSIONS 1. A country grid emission factor for electricity, calculated

using the approach of the United Nations Framework
The approach applied by IFC for calculating baseline
Convention on Climate Change Clean Development
emissions follows that of the international financial
Mechanism, which is no more than two years old and
institution Approach to GHG Assessment in the Renewable
has been validated by a third party.
Energy Sector, where a default greenhouse-gas emission
factor for the electricity sector in the country is calculated as: 2. A transparent, project-specific study.
For non-grid connected energy, the baseline is calculated using

Electricity Factor = [0.50 x Operating Margin] the combustion factor for the fossil fuel (for example, diesel
+ [0.50 x Build Margin] oil) that is used to generate electricity or heat and that will be
displaced following the installation of the biomass project.
The Operating Margin (OM) is the average carbon
15.4.2 UPSTREAM EMISSIONS
dioxide emission per unit of electricity generated (tons of
carbon dioxide per MWh) in the area, as published by the The calculation approach applicable for upstream emissions
International Energy Agency (IEA). The Build Margin (BM) depends on the source of feedstock used for the biomass project.
is carbon dioxide emission per unit of electricity generated
For tertiary feedstock (waste biomass), upstream
(tons of carbon dioxide per MWh) using the most efficient
greenhouse-gas emissions associated with production of the
fossil fuel electricity generation available in the country
feedstock can generally be excluded.
(according to the IEA) (IFC, 2013).
For primary and secondary feedstock (non-waste biomass),

If such calculation cannot be performed, either of the
upstream greenhouse-gas emissions associated with
following two approaches can be used instead:

production, land use, and harvest of biomass need to be or shrub lands, or wetlands are used for feedstock. The loss
included in the calculation. of carbon from conversion of land will have to be performed
using either of these methodologies (in order of preference):
PRODUCTION EMISSIONS
For primary and secondary feedstock, the emissions resulting 1. Calculation using a common, acknowledged tool (for
from the use of mineral fertilizer and manure will have to be example, CDM methodology, BioGrace-II, or EX-ACT)
calculated using the Global Nitrous Oxide Calculator (GNOC). 12

2. Use of figure (tons of carbon per hectare) for a
given region, soil type, and biome given in Winrock
In order to calculate the emissions of nitrous oxide, the
International or Woods Hole Research Center databases
information to be entered into the GNOC is given
in Table 15–3. 3. Use of figure (tons of carbon per hectare) for a given region,
soil type, and biome published in peer-reviewed literature
LAND-USE EMISSIONS
4. Use of figure (tons of carbon per hectare) for a given
For secondary and tertiary feedstocks, calculation of region, soil type, and biome published in official
land-use emissions (resulting from direct and indirect reports and publications (by, for example, IFC, EU,
land-use change) are not performed. national governments).
For primary feedstock, the emissions resulting from land-use

change must be included if forested areas, natural grasslands
12 Available at http://gnoc.jrc.ec.europa.eu/
Table 15-3: Emissions
Information to Be Entered into GNOC Aspects to Consider
Place Search for the location (such as Indonesia) or Most locations are available in the calculator. If the given region
enter the coordinates of the crop production (x, y). is not available, the country should be used.
Crop Select the appropriate crop from the dropdown If the selected feedstock is not available, calculation will have
list. The list of crops to choose from includes: to be performed using either of these methodologies
Barley, Cassava, Coconut, Cotton, Maize, Oil Palm (in order of preference):
Fruit, Rape Seed, Rye, Safflower Seed, Sorghum, • Using IPCC Tier 1 Calculation method, using, for example,
Soy Bean, Sugar Beet, Sugar Cane, Sunflower BioGrace-II tool.
Seed, Triticale, and Wheat. • Calculating a value in GNOC using a different crop.
• Using a number given in peer-reviewed literature.
• Estimating a value, using other means of calculation.
Soil type Select whether the soil is organic or mineral. The definition of organic soil is given in GNOC. Consult this if
soil type is unknown. If the soil type cannot be defined using
the information in GNOC, select the soil most prevalent in the
region. If this is also unknown, select mineral soil.
Irrigation Select whether the crop is irrigated or not (yes/no). Please select “yes” if the crop is irrigated (except drip irrigation),
for which no nitrogen leaching is assumed (IPCC, 2006).
Fresh yield Enter the fresh yield (in kilograms per hectare) Coconut yield has to be given as yield of “husked coconut in shell”
[KILOGRAMS PER HECTARE]. See GNOC for further information.
Mineral fertilizer Enter the amount of mineral fertilizer applied Annual amount of synthetic nitrogen fertilizer applied to the
(in kilograms of nitrogen per hectare) field (in kilograms of nitrogen per hectare).
Manure Enter the amount of manure applied Annual amount of managed animal manure applied to the
(in kilograms of nitrogen per hectare) field [IN KILOGRAMS OF NITROGEN PER HECTARE]. See
GNOC for further information.
Source: COWI.

The total emission resulting from change of land will have to This includes energy used by harvesting equipment and for
be annualized over the life of the project: compaction or processing of biomass.
C For those feedstock types where significant processing is

tC Total emissions ( ——)
(
ha x year )
Annual emmissions ——————— =————————————ha ———
Project lifetime (year) required (for example, for the production of wood pellets)
or where handling takes place (for example, wood chipping
or baling of straw), emissions from these activities must be
The calculated figure (tons of carbon per hectare per year)
included. If these activities take place on-site, they can be
must be added to the yearly emissions (upstream emissions)
calculated under operational emissions, if energy use is part
resulting from the project.
of the total operation.
HARVEST, PROCESSING, AND STORING OF BIOMASS

If these emissions take place separately from the generation
Any emissions resulting from harvest of biomass must be of energy, the emissions must be calculated using a validated
included for primary and secondary feedstock sources. tool or methodology, for example BioGrace-II or CDM
Source: COWI.

methodologies. Emissions resulting from the storage of associated with the baseline scenario, these should be
feedstock (for example, leakage of methane from stored calculated and included.
manure) must also be included in the calculation.
For biomass operations, where significant waste products
TRANSPORT OF BIOMASS occur (for example, digested remains from biogas
For all three feedstock types (primary, secondary, tertiary), production), those emissions resulting from transport
emissions resulting from the transport of the feedstock and disposal of these waste products must be included in
must be included in the calculation. This includes emissions the calculation. Similarly, emissions resulting from any
resulting from transport by truck, freight train, and bulk downstream operations related to the biomass-to-energy
carrier. Transport must be given in kilometers and the project also should be included.
total emissions resulting from this (in kilograms of carbon
15.4.5 EMISSIONS FROM LEAKAGE
dioxide-equivalent per kilometer) must be added to the total
upstream emissions. Leakage are those emissions resulting from activities beyond
the project boundary, for example by causing increases
15.4.3 OPERATIONAL EMISSIONS in greenhouse-gas emissions from an activity not directly
Operational emissions include emissions associated with related to the biomass project, or by displacing a source of
on-site processes and activities on the biomass plant and greenhouse-gas emissions off-site.
emissions associated with (on-site or off-site) pretreatment
Leakage is particularly relevant in those situations where
of the feedstock (for example, wood pellet production).
the feedstock has other uses within the region. For example,
This includes any mobile or stationary fuel combustion
straw can be used for local combustion or as feedstock for
(for example, for power or heating), as well as electricity
animals, and the use of the feedstock for energy generation
purchased from the grid. Other relevant emission sources
in the biomass project risks forcing the current users of the
include onsite land use, waste, wastewater, and cooling and
feedstock to find alternatives for their current activities (such
refrigeration, if applicable.
as importing feed instead of using straw). In situations where
15.4.4 DOWNSTREAM EMISSIONS this takes place, the emissions resulting from displacement of
current activities should be attributed to the biomass project.
Downstream emissions are generally excluded from the
calculation. However, in those situations where downstream
emissions are larger than those downstream emissions

Source: COWI.
172 Lessons Learned from Biomass Projects

LESSONS LEARNED FROM BIOMASS PROJECTS
16
This chapter presents key learnings and international best important to have agreed standardized connection terms
practice based on experience from the implementation of and a suitable grid connection point within a short
representative biomass projects. Because the variety and distance. Heat-only production (process steam and/or
complexity of biomass projects is huge, not all learnings hot water) may be the easier and right solution
apply to all type of projects. for many industries.
• Does the project owner have sufficient strength and

16.1 IMPORTANT CONSIDERATIONS WHEN
access to finance to bring the project to completion?
INITIATING A BIOMASS PROJECT
For small and medium companies in countries where
The following illustrates typical initial considerations that the financial markets are unfamiliar with biomass
any project owner or developer must ask when initiating a projects, own funds (equity), funds from a parent
biomass project. Experience shows that a “no” to one or company, or supplier finance may provide financing
more of the following questions may stop or substantially at better terms and conditions.
delay a project.
• Is a suitable-sized site for the biomass plant identified?
• Is sufficient biomass available at a uniform quality? A site in close proximity to the industrial consumer
Sufficient quantities of biomass residues owned by the of steam/heat and to the source of biomass should be
developer on-site is a less risky source than off-site identified. The site must have an adequate size for the
biomass from third parties. However, if the available plant, including infrastructure such as roads, unloading
on-site biomass is insufficient, the developer should seek facilities, etc. Additional land should be made available
additional sources of biomass off-site within a reasonable during the construction phase, but temporary land often
distance of the intended plant and investigate whether the can be rented from neighbors.
cost for the biomass fuel and its transport is competitive.
16.2 THE LOW-HANGING FRUIT IN BIOMASS
For projects depending on biomass supplied by a third PROJECTS
party, the ability to enter into long-term supply agreements
• Biomass processing industries or biomass producing
with few and credible counterparts is the key to success.
companies, with biomass byproducts and residues, a
• Is the biomass fuel suitable for combustion without major demand for process energy, and/or proximity to an
risks? Some biomass fuels, such as sugarcane residues, external energy consumer, may have a good basis for a
straw, and sorghum, can have very corrosive properties, biomass-to-energy project. Many successful projects exist
and it therefore is important to ensure the application of a within industries such as pulp and paper, wood, palm oil,
suitable technology and equipment quality. sugar, olives, coconuts, instant coffee, etc.
• Is there a well-defined market for the power and/ • Substitution of expensive fossil fuels with biomass
or heat produced? The ability to substitute in-house, residues may be beneficial for some industries and
fossil fuel-based energy with biomass may provide an enhances their competitiveness.
easier business case than reliance on the sale of heat
• The use of local biomass as a fuel eliminates or reduces
and power to third-party customers or to the national
the reliance on a stable fossil fuel supply. At the same
grid. If power sale to the grid is envisioned, it will be

time, local production of energy is a catalyzer for the local to identify a secondary biomass supply at an early stage
economy in terms of extra jobs in the fuel supply chain. of the project.
• In-house production of electricity and steam/heat from TECHNOLOGY SELECTION AND DESIGN
biomass may be a more reliable energy source than
• If the moisture content in the fuel is above 60 to 65
unstable external supplies, and production interruptions
percent, anaerobic digestion may be the choice of
at the enterprise may be avoided.
technology. For drier biomass wastes, a combustion
technology will be more suitable.
16.3 IMPORTANT LESSONS LEARNED
BIOMASS AVAILABILITY AND SUPPLY CHAIN • Proven technologies are essential, but in order to reduce
capital costs, a local low-cost supplier may supply the
• The most important question to ask is whether sufficient
technology in cooperation with an international, reliable,
biomass residue of the proper quality is available from the
and experienced supplier who is responsible for the
industrial facility’s own production, perhaps supplemented
process design.
by local agricultural or forestry biomass wastes.
• The intended fuels will determine the combustion
• For fuels sourced off-site, biomass must be secured by
technology to use, but they also must be evaluated in
long-term contracts. The contracts must contain all
terms of suitability for handling and storage at the
relevant issues for the fuel supply, including quality
site. The fuel sizing and content of potential corrosive
requirements such as moisture range, sizing, and absence
elements will influence the selection of boiler technology
of foreign elements. In addition, the contract should
and materials in the boiler parts. It must be verified
specify all commercial aspects such as price terms,
that internationally proven equipment suppliers can
penalties, rejection right, and other conditions. The
accept the chosen type of biomass and that acceptable
establishment of a stable and reliable supply chain for off-
warranties can be guaranteed. Selection of unproven
site fuels is one of the most critical and difficult aspects of
technology or unexperienced suppliers may easily lead to
the biomass project and requires careful analysis.
delays, operational problems, and budget overruns.
• When the energy production depends on agricultural or
• If power production and export to the grid is foreseen,
forestry production residues, the seasonal variation of
it is important at an early stage to check that a grid
biomass production becomes a determining factor for its
connection is possible at the right voltage and within
availability (for example, delivery problems during the
close proximity. It also should be determined who should
rainy season). It therefore is essential to map the seasonal
erect and finance the connection. It is important to
variation for the most common crops that deliver the
check emission limitations at an early stage, as this may
secondary or tertiary biomass for energy production.
influence the choice of technology, especially in the flue
Furthermore, storage facilities may be established on-site
gas cleaning system.
at the plant or off-site at the premises of the biomass
suppliers if storage is needed due to production or • Fuel flexibility is important in case of a lack of supply
seasonal variations. In all cases, the on-site storage of the intended biomass fuel.
capacity must be determined and approved. Typically, • Handling and disposal and/or reuse of residues
storage capacity at the biomass plant site of a minimum (bottom ash and fly/boiler/flue gas cleaning ash)
of three to four days is needed. must be assessed carefully, as this can substantially
• It is important to consider biomass flexibility, in terms of influence the project economy.
supply, delivery, storage, preparation, and feeding. Better • Island operation (off-grid operation) is an important
flexibility with alternative biomass types may increase feature in many developing countries with daily dispatch
the industry’s operating time and availability if there is a of the electrical grid. Requirements for island-mode
shortage of the preferred fuel. In any case, it is important

operation must be part of the technical description in the determine the progress to the next stage. Improper
tender specification/contract. planning and incorrect selection of technology is likely
to lead to delays, operational problems, and budget
CONVERSION OF EXISTING BOILERS TO PARTIAL OR
overruns. Assistance to the owners from experts in
FULL BIOMASS COMBUSTION
planning and technical issues is recommended.
• If conversion of existing boilers is foreseen, the
• The development process will require substantial
involvement of the boiler supplier at an early stage is
assistance from specialists with experience in engineering,
very important. The original equipment supplier is best
architecture, environment, legal issues, and economics/
suited to determine potential consequences of converting
finance. No project will receive financing if the early
the existing boiler to the selected biomass fuel.
development work is lacking in quality and scope.
• Careful consideration should be given to whether a
• It is important to check whether national (and any
conversion of the existing technology is the best long-
regional or international) legislation is in favor of
term solution compared to a new plant.
this type of project and that environmental approval
COMMERCIAL AND FINANCIAL VIABILITY OF PROJECTS can be expected. Time needed to prepare and obtain
an environmental impact assessment and gain
• The key driver of financial viability of biomass projects
environmental approval is often underestimated, and this
is a stable, low-cost supply of biomass in sufficient
may jeopardize the time schedule.
quantity and quality.
• A proper site investigation is highly recommended.
• If export of energy is anticipated, access to a market
Detection of underground obstructions, the need for
with acceptable prices for the heat and power produced
piling, archaeological issues, etc. may cause delays that
is crucial. Sale of both electricity and steam/heat should
should be identified and addressed.
improve the financial viability of the project, otherwise
only in-house consumption should be assumed. It • Availability of cooling water for the steam cycle
is important to check whether the feed-in tariff is (condensing of the steam) will increase plant efficiency
guaranteed and for how long. and benefit the business case.
• Sale of process heat/steam to nearby industries or as PROCUREMENT

district heating also may improve the financial viability
• It is crucial that owners do not sign contracts without
of the project.
assistance from advisers who are experienced in
• Access to finance at competitive terms is important. For technical and legal aspects. Contracts often lack
smaller projects in countries with less developed financial sufficient stipulations and regulations on issues such
sectors, supplier finance may be a more competitive as performance guarantees, liquidated damages, delay
solution than bank finance. damages, testing regime, how to remedy defects, etc.
• As a rule of thumb, biomass combustion projects • Development of a detailed technical specification as part
typically face capital costs between $1 million per MWe of the contract is important. This includes topics such as
(as in China and India) and $3 million to $3.5 million the scope of supply, limits of supply, main design values
per MWe (as in Europe and North America). of equipment, etc.
PROJECT DEVELOPMENT • It is important to base the tendering on internationally

well-known contract specifications in order to attract
• Development of a biomass project should progress in
the best suppliers for larger projects in anticipation of
well-defined stages, such as the pre-feasibility study,
international competition.
feasibility study, planning applications, procurement, etc.
For each stage completed, a go or no-go decision should

• The contract document should include proper functional engage the equipment supplier’s supervisor for a period of
and performance testing schemes, and these should be one to two years in order to assist the owner’s staff during
verified and documented during plant commissioning. the time of first operation. The operation and maintenance
also may be outsourced to an operation and maintenance
• Contractual guarantee requirements linked to liquidated
operator on a long-term contract.
and delay damages should secure the timely delivery of a
well-performing power plant. • Training of staff must be planned in due time during
construction (for example by the technology provider
• Availability and continuous operating time without
and the consultant). Training at similar facilities should
manual cleaning stops must be demonstrated during the
be considered as an alternative.
first year of operation. Agreements on this aspect must be
part of the contract. • Maintenance according to the equipment supplier’s
instructions throughout the project life is crucial in order
OPERATION AND MAINTENANCE
to maintain the plant’s availability.
• A biomass plant is a technically complex setup that requires
staff with sufficient skills. A good and sound solution is to

APPENDICES
APPENDIX A Biomass-to-Energy Screening List

Project Information Unit Input
Project name
Client/owner
City
State/province
Country
Type of industry
Type of project
• Steam technology
• ORC technology
• Biogas technology
General Questions
Are employees with required skills readily available to manage yes/no
and run the plant?
Is national (and any regional or international) legislation in
favor of this type of project, and can environmental approval be
expected? Does legislation allow such facilities?
Residual Biomass Fuel Data
Is the biomass waste appropriate as fuel for energy production?
Type of biomass
Is a potential corrosive behavior of the fuel acceptable by
Annual amount tons
Calorific value MJ/kg
Moisture content %
Other characteristics (particle size, etc.)
Is the rainy season an obstacle if using forestry or agricultural
biomass residues?
(continued)

APPENDIX A Biomass-to-Energy Screening List (continued)
Supplementary Biomass Fuel Data
Type of biomass
Is a potential corrosive behavior of the fuel acceptable by
Calorific value MJ/kg
Moisture content %
Other characteristics (particle size, etc.)
Logistics (delivery by truck, etc.)
Cost of fuel $/ton
Is the rainy season an obstacle?
Energy Supply Data (to Industry)
Requested power output MW
Requested heat output MW
Data heat output bar/°C
Requested steam output tons/hour
Data steam output bar/°C
Constant supply yes/no
Operating time hours/year
Electrical Grid
Is a well-defined market for export of energy (electricity and/ yes/no
or steam/heat) available with long-term secured prices, making
the project feasible?
Distance to electric grid connection point Km
Voltage level Volt
Who would pay for the transmission line to the connection point?
External Heat/Steam Customers
Possible heat supply MW
Data heat output bar/°C
Possible steam supply tons/hour
Data steam output bar/°C
What is the distance? meters
Who would pay for the connection?
Site Information
Site available at the industry? yes/no
Size of the site m²
178 Biomass-to-Energy Screening List

APPENDIX A Biomass-to-Energy Screening List (continued)
Environmental Requirements
Air emission limits
• Dust mg/Nm³
• Carbon dioxide mg/Nm³
• Nitrogen oxides mg/Nm³
• Sulfur oxides mg/Nm³
• Hydrogen chloride mg/Nm³
Others
Cooling
Is seawater cooling possible (sea, river)?
Is water available for cooling tower? yes/no
Financing/Economy
Who will be the owner and operator of the project?
Is financing available at reasonable terms and costs? yes/no
What is the feed-in tariff? $/MWh
Can the feed-in tariff be guaranteed, and for how long a time?
Are potential government incentives (for example, renewable
energy certificates) available?
What is the requested payback time of the project? years
Source: COWI.

APPENDIX B Characterization of Biomass
Number 1 2 3
Feedstock Coniferous stem wood, Logging residues, coniferous Wheat straw

without bark
Source: DTI & Biowaste4SP. Source: DTI & Biowaste4SP. Source: DTI & Biowaste4SP.
Most Common Trading Form chips chips bales
Conversion Technology combustion combustion combustion / fermentation
Net Calorific Value (MJ/kg) 19.1 (18.5–20.5) 18.5–20.5 16.6–20.1
Biogas Potential (Milliliters of not relevant not relevant 240–440

methane / grams of volatile solids)
Bulk Density (kg/m³) 300 (270–360) 300 (270–360) 20–40 (loose)

20–80 (chopped)
110–200 (baled)
560–710 (pelletized)
Elementary Carbon 50 (48–52) 50 (48–52) 48 (41–50)

Analysis
(w% dry) Hydrogen 6.1 (5.7–6.2) 6.1 (5.7–6.2) 5.5 (5.4–6.5)
Oxygen 40 (38–44) 40 (38–44) 39 (36–45)

Chemical Composition
Lignocellulosic Hemicellulose 25–25 25–25 23–30

Constituents
(w% dry) Cellulose 40–45 40–45 34–38
Lignin 24–33 24–33 16–21
Ash Content (% dry bulk) 3 (1–10) 3 (1–10) 2–10
Volatile Matter (% dry bulk) 86 (80–90) 84–86 77 (75–81)
Moisture Content 30–55 35–55 10–30

(Traded Form) (w–%)
180 Characterization of Biomass

4 5 6 7
Used wood (post consummer Bark, coniferous Broadleaved stem wood Poplar
wood, recycled wood, untreated) (debarking residues) with bark
Source: DTI & Biowaste4SP. Source: DTI & Biowaste4SP. Source: DTI & Biowaste4SP. Source: DTI & Biowaste4SP.
hog fuel shredded chips chips
combustion combustion combustion combustion
18.6–18.9 17.5–20.5 15.0–19.2 18 (17.3–20.9)
not relevant not relevant not relevant not relevant
200 (140–260) 240–360 220–260 340 (320–400)
49–52 50 (48–55) 42.6–52.0 49.7 (44.8–52.0)
5.9–6.4 5.9 (5.5–6.4) 5.7–6.4 6.0 (5.6–6.3)
38–44 38 (34–42) 41.4–51.1 43.9 (41.6–48.6)
25–30 10–15 21–32 25.3 (12.7–39.8)
40–45 20–30 28–49 44.4 (35.2–50.8)
20–30 10–25 30–32 22.9 (15.5–31.9)
0.5–2 1–5 0.3–1.5 1.2 (0.2–2.7)
84–86 70–80 83.1 (75.6–85.8) 82.6 (71.8–87.5)
15–30 50–65 10–50 4.8–15
(continued)

APPENDIX B Characterization of Biomass (continued)
Number 8 9 10
Feedstock Cereal straw Pruning from olive trees Eucalyptus
Most Common Trading Form bales chips chips
Conversion Technology combustion / fermentation combustion combustion
Net Calorific Value (MJ/kg) 14.8–20.5 16.3 (16.0–18.5) 18.5 (17.0–21.6)
Biogas Potential (Milliliters of 245–445 not relevant not relevant

Bulk Density (kg/m³) 20–40 (loose) 250 (220–270) 250 (220–260)

20–80 (chopped)
110–200 (baled)
Elementary Carbon 48.9 (43.7–52.6) 40.7 (39.0–45.0) 50.3 (46.2–55.2)

Analysis
(w% dry) Hydrogen 5.9 (3.2–6.6) 5.7 (5.0–6.0) 6.2 (4.9–6.9)
Oxygen 43.9 (39.4–50.1) 41.0 (40.0–42.0) 43.3 (38.2–47.7)

Lignocellulosic Hemicellulose 25.0 (7.2–39.1 11.5 (10.0–12.0) 25.3 (8.4–43.5)

Constituents
(w% dry) Cellulose 37.0 (14.8–51.5) 48.5 (47.5–49.5) 43.0 (8.8–57.5)
Lignin 17.5 (5.0–30.0) 30.5 (29.5–31.5) 23.2 (9.37)
Ash Content (% dry bulk) 6.7 (1.3–13.5) 30.5 (29.5–31.5) 1.2 (0.2–6.1)
Volatile Matter (% dry bulk) 81 (73–87) 76.2 (75.2–80.5) 83.4 (77.5–93.6)
Moisture Content 15 (8–25) 25 (10–50) 10 (5–50)


11 12 13 14
Paulownia Willow (Salix) Reed canary grass Barley straw
chips chips Bales chopped bales
combustion combustion combustion / fermentation combustion / fermentation
18.6 (18–20) 19.8 (19 – 21) 16.6 (14.6–17.5) 18.9
not relevant not relevant 280–410 240–320
250 (220–260) 330 (300–390) 150–200 (bales) 20–40 (loose)

20–80 chopped)
110–200 (baled)
49.5 (47.9–50.0) 49 (47.1–50.3) 45.3 (44–48) 45.4 (39.9–47.5)
6.4 (5.8–6.7) 6 (5.8–6.2) 5.6 (5.2–6.2) 5.6 (5.3–5.9)
43.8 (43.2–45.0) 43 (41.3–45.3) 41.2 (38–44) 42.1 (41.2–43.8)
19.6 (19–25) 27 (23–32) 22–25 24–29
41.6 (40–49) 41.0 (38–45) 38–46 31–34
22 (21–23) 25 (23–29) 18–21 14–15
1.1 (0.5–3.5) 1.5 (1–3) 8 (3–22) 4.5–9
82.0 (81.5–84.0) 82 (81–86) 77 (74–81) 82.4
10 (5–30) 40 (35–50) 15 (5–35) 15 (5–35)
(continued)

Number 15 16 17
Feedstock Empty fruit bunch Bamboo Sugarcane bagasse
Most Common Trading Form bales briquettes chips chopped
Conversion Technology combustion / fermentation combustion fermentation / combustion
Net Calorific Value (MJ/kg) 11.5–14.5 16.9 16.7 (15–19.4)
Biogas Potential (Milliliters of 264 not relevant 72–200

Bulk Density (kg/m³) 100–200 200 130 (120–160)
Elementary Carbon 43.8–54.7 46.7–52.0 46

Analysis
(w% dry) Hydrogen 4.4–7.4 5.1–5.6 5.7
Oxygen 38.2–47.8 37.8–42.5 39.2

Lignocellulosic Hemicellulose 20.6–33.5 19.5 24.5 (24–32)

Constituents
(w% dry) Cellulose 23.7–65.0 49.3 35.2 (32–44)
Lignin 14.1–30.45 22.4 22.2 (19–24)
Ash Content (% dry bulk) 1.3–13.7 7.7 9 (4.5–25)
Volatile Matter (% dry bulk) 72–75 74.2 76.1–85.6
Moisture Content 61–72 15 (5–30) 50 (48–53)


18 19 20 21
Corn cobs Rice husk Rice straw Switch grass
chopped bulk bales bales
fermentation / combustion fermentation / combustion fermentation / combustion fermentation / combustion
14 12–16 14.5–15.3 15.7
330 49 (49–495) 280–300 246
160–210 100 20–40 (loose) 49–266 chopped)

20–80 (chopped)
110–200 (baled)
47.1 37–44 38.4 (36–42) 43.6
5.8 4.8–5.6 5.2 (4.6–5.3) 6.4
40 33–49 36–43 44.8
31–33 29.3 33.5 31.7
40–44 34.4 44.3 43.1
16–18 19.2 20.4 11.3
15 (1–40) 17–24 14–16 4.3
87.4 61.8–74.3 65.5 87.4
8–20 10 10–20 8–15
(continued)

Number 22 23 24
Feedstock Chicken manure Dairy manure Swine manure
Most Common Trading Form bulk / pellets bulk / pellets bulk / pellets
Conversion Technology fermentation / combustion fermentation / combustion fermentation / combustion
Net Calorific Value (MJ/kg) 9–13.5 no data no data
Biogas Potential (Milliliters of 156–295 51–500 322–449

Bulk Density (kg/m³) 230 depending on depending on

moisture content moisture content
Elementary Carbon 35.9 37.6 34.8

Analysis
(w% dry) Hydrogen 5.1 5.1 4.7
Oxygen 30.5 28.9 30.3

Lignocellulosic Hemicellulose 23.2 15.2 27.7

Constituents
(w% dry) Cellulose 20 19.5 11.3
Lignin 1.6 17.4 4.3
Ash Content (% dry bulk) 24 25.2 27.6
Volatile Matter (% dry bulk) 19.5 28.8 no data
Moisture Content 6–22 10–75 10–85


25 26 27 28
Palm kernel shells (PKS) Banana peel Cassava peels Tobacco leaves
bulk bulk bulk bulk
combustion fermentation fermentation fermentation / combustion
15.6–22.1 no data no data 17.97
not relevant 223–336 272–352 289 (calculated)
450 no data depending on depending on

44.5–52.4 no data 39.96 41.2
5.2–6.3 no data 3.98 4.9
37.3–49.7 no data no data 33.9
22.7 14.8 37.0 34.4
20.8 13.2 37.9 36.3
50.1 14 7.5 12.1
3.2–6.7 11.4 4.5 17.2
76.3–82.5 no data 95.5 82.8
no data no data 28.5–66.3 ~10 (dried)
(continued)

Number 29 30 31
Feedstock Tobacco stalk Recycled paper Sewage sludge
Most Common Trading Form bulk bulk bulk
Conversion Technology fermentation / combustion combustion fermentation / combustion
Net Calorific Value (MJ/kg) 19.02 12.77 7–15
Biogas Potential (Milliliters of 163 not relevant 249–464

Bulk Density (kg/m³) depending on 431 (compacted) depending on

Elementary Carbon 49.3 52.3 28.0–45.0

Analysis
(w% dry) Hydrogen 5.6 7.2 4.0–6.2
Oxygen 42.8 40.2 2.4–43.5

Lignocellulosic Hemicellulose 28.2 11.0 no data

Constituents
(w% dry) Cellulose 42.4 68.4 no data
Lignin 27.0 11.4 no data
Ash Content (% dry bulk) 2.4 89.2 12–34.6
Volatile Matter (% dry bulk) 97.6 10.8 65.4–88
Moisture Content 6 (dried) 5 55–96.5

Sources: Lemus et al. (2013), Saidur et al. (2011), McKendry (2002), Kandel et al. (2013), Dubrovskis, Vilis, et al. (2012), Kim, Tae Hoon, et al. (2014),
Kim, Sang–Hyoun, et al. (2013), Teh et al. (2010), Chang (2014), Papadopoulos (2004), Batalha et al. (2011), Rabelo et al. (2011), Rezende et al. (2011),
Vivekanand et al. (2014), Pointner et al. (2014), Kaliyan & Morey (2014), Wang (2011), Mullen et al. (2012), Chandra et al. (2012), Li et al. (2013),
Armesto (2002), Lam et al. (2008), Oliveira et al. (2012), Tiquia et al. (2002), McMullen et al. (2005), Otero et al. (2011), Husain et al. (2002), Kim et al. (2010),
Okafor (1988), Kelly–Yong et al. (2007), Sharma et al. (1988), Tovar et al. (2015), Thomsen et al. (2014), Liu et al. (2015), Vounatsos et al. (2012), WRAP (2009),
Francou et al. (2008), Cabbai et al. (2013), Caporgno et al. (2015), Jhosane Pages–Diaz et al. (2014), Göblös et al. (2008), Demirel et al. (2005),
Kafle and Hun Kim (2013), Costa et al (2013), Lee (2010), Zupan i and Grilc (Not available), Thiago Rocha dos Santos Mathias et al. (2014), Adela et al. (2014),
Ahmed et al. (2015).
188 Biomass-to-Energy Screening List

32 33 34 35
Residuals from slaughterhouse Residuals from dairies Residuals from breweries Palm oil mill effluent (POME)
(brewery grain waste—BGW)
bulk bulk bulk no data
fermentation fermentation fermentation no data
no data no data no data 0.47
no data no data no data no data
no data no data no data not relevant
no data no data no data 0.47

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Converting Biomass to Energy

A Guide for Developers and Investors

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Definitions and Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii

2 Project Development Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

3 The Biomass Resource . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

4 Securing Biomass Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

5 Energy Conversion Processes .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

6 Plant Design and Permitting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

7 Procuring the Biomass Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

8 Construction and Commissioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

9 Operation and Maintenance of Biomass Plants .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

10 Regulatory Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

11 Commercial Aspects .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

12 Typical Investment and Operation and Maintenance Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

13 Financial and Economic Analyses .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

14 Financing Biomass Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

15 Environmental and Social Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

16 Lessons Learned from Biomass Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173

Appendix A: Screening List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177

Appendix B: Characterization of Biomass . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180

Converting Biomass to Energy: A Guide for Developers and Investors iii

Figure 2-1: Main Contracts for a Biomass-to-Energy Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Figure 2-2: Stakeholders of the Biomass Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Figure 2-3: Project Development Stages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Figure 2-4: Project Implementation Stages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Figure 2-5: Typical Contents of a Pre-Feasibility Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Figure 3-1: Flow Chart of Biomass, from Field to Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Figure 3-2: Biomass Classification .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Figure 4-1: Calculation Methodology for Biomass Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Figure 4-2: Seasonality of Agricultural Crops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Figure 4-3: Map of Distance from Biomass Resource to Project Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Figure 5-2: The Biomass Combustion Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Figure 5-3: Combustion Process on a Sloping Grate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Figure 5-5: Traveling Grate Principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Figure 5-6: Vibrating Grate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Figure 5-7: Step Grate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Figure 5-8: Principle of BFB and CFB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Figure 5-9: Bubbling Fluidized Bed Boiler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Figure 5-12: Water-Steam Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Figure 5-13: Illustration of a Steam Turbine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Figure 5-14: Principle of a Typical Organic Rankine Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Figure 5-15: Principle of Connections to an ORC Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Figure 5-16: Illustration of Electrical Efficiency as a Function of Cooling Water Temperature . . . . . . . . . . . . . . . . . . . . . 48

Figure 5-17: Layout of a 1 MWe ORC Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Figure 5-18: MWe Biomass-driven ORC Unit .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

iv Converting Biomass to Energy: A Guide for Developers and Investors

Figure 5-20: A 1 MWe Biomass ORC Plant in Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Figure 5-21: Illustration of a Multicyclone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Figure 5-22: Illustration of a Venturi Scrubber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Figure 5-23: Detail of an Electrostatic Precipitator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Figure 5-24: Baghouse Filter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Figure 5-25: The Waste Hierarchy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Figure 5-26: Cooling Tower from a Mexican Sugar Mill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Figure 5-27: Industrial Cooling Towers for a Power Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Figure 5-31: Process Flow of a Simple Biogas Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Figure 5-33: Example of Biomass Gasification Power Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Figure 5-34: Wood Chips, at Different Steps Toward “Black Pellets” .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Figure 6-5: Conceptual Design for Biomass Power Plant in Southeast Asia

Table 3-3: Sample Questions to Consider When Assessing Constraints