dr keith lovegrove head solar thermal, it power group ...€¦ · • capital available at...

Dr Keith Lovegrove

Head – Solar Thermal, IT Power Group, http://www.itpau.com.au

(with acknowledgements to Steve Edwards, Josh Jordan, Juergen

Peterseim, Hugh Saddler, Jay Rutovitz, Muriel Watt, Joe Wyder)

Renewable Energy Consulting Joe Wyder

Projects Manager

IT Power Australia

March 2015

IT Power Renewable Energy Consulting

Established in the UK in 1981 as

Intermediate Technology Power.

Specialist sustainable energy engineering

consultancy:

– renewable energy and efficiency

consulting,

– climate change policies and carbon

trading market analysis,

– international development, and

– business consulting and due

diligence.

More than 2,000 sustainable energy

projects in over 100 countries.

Head Office and Marine Energy Division

in the UK with offices in

India, China, Australia, East Africa

and South America.

ITP provides independent energy advice

RE Options for Australian Industrial Gas Users

Data From Australian Energy Statistics 2014

Australia’s end use energy

70% from

gas

Current Industrial Use

• Chemical feedstock

• Drying

• Ovens

• Heating water / steam

• Gas prices are increasing

• Gas supply is uncertain

• Some gas users are keen to reduce their carbon footprint

• Potential to make use of unused resources

• Capital available at affordable rates

• Technical risk is low

Renewable energy viability

Viable technology solutions

Industrial gas users should consider:

• Biomass if a low cost suitable biomass resource is available

convenient to the location.

• Solar heating of water or steam at temperatures below

approximately 250oC in areas of reasonable solar resources.

• Hot sedimentary aquifers for low temperature process heat where

a resource exists nearby to the point of use at modest depth.

• Heat pumps (and PV) if electricity costs justify.

De Bortoli Winery Griffith NSW,100 x 30 tube collectors to deliver 12,000L of water per day, at 95°C

Case study - Evacuated tubes

Case study – Parabolic trough

10MWth solar thermal trough array for 250°C, at a copper mine in Chile.

Case study - Biomass boiler

8MWth boiler using grape spent grape marc at Australian Tartaric site in Victoria

Case study - Biomethane

Altmark biomethane plant in Germany 1,650m3 biogas per hour from mixed feedstock

Costs for biomass: Capex

• Capital cost has strong dependence on size

• Almost independent of technology or temperature of use

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

0 10 20 30 40 50

Spe

cifi

c p

lan

t co

st, A

U$

/MW

th

Process heat demand, MWth

Process Heat Plant Specific Cost

Boilers or gasifiers

Digestors

• Biomass fuel not universally available

• Cost ranges from zero upward

Costs for biomass: Fuel

Resource Indicative cost per GJ

Animal wastes, sewage sludge, landfill gas Generally low to zero, can be negative if

disposal costs are avoided

Wood process residues, bagasse, etc low to zero

Short cycle crops such as oil mallee $5 to $7/GJ near term

Wood pellets $12/GJ at plant gate, add $0.3/GJ up to 15km

and $0.8GJ up to 70km

Assumptions:

7.5% on 60%

debt, 10% on

equity, 15 year

depreciation,

20yrs life… 16

Inte

rnal R

ate

of

Re

turn

Opportunities for bioenergy

Locations where:

– there is access to a low cost bioenergy supply, eg a waste stream close by, and

– relatively high gas costs make the expense of bioenergy investments worthwhile.

Prospective industries include:

– food and beverage manufacturing,

– agriculture (dairy, feedlots and meat processing), and

– pulp and paper manufacturing.

18

Capex for solar thermal –

depends on temperature and size

19

Assumptions:

7.5% on 60%

debt, 10% on

equity, 15 year

depreciation,

20yrs life…

Inte

rnal R

ate

of

Retu

rn

Opportunities for solar thermal

Industries where:

– gas is used for low to medium temperature applications (50 – 250oC).

Locations where:

– appropriate waste streams are not readily available or biomass transportation and storage costs are prohibitive,

– there is an above average solar resource, and

– land (including roof space) is available at low or no cost.

Prospective industries include:

– meat processing and dairy products,

– minerals and resource processing,

– chemicals manufacturing, and

– fertiliser manufacturing.

Australia’s Policy

Landscape

• Emissions Reduction Fund

• Renewable Energy Target

• Clean Energy Finance Corporation

• Australian Renewable Energy Agency

• State Government agencies

Conclusions

• Rising gas prices are creating challenges for gas users and opportunities

for renewables.

• Renewable energy technologies displacing gas can offer increased

certainty and attractive longer term opportunities.

• Gas users are risk averse and expect high IRRs, thus there may be

opportunities for Energy Service Companies.

• The CEFC can provide low interest financing.

• Proponents should be discussing potential projects with relevant

State Governments and ARENA.

For more information, updates or feedback: keith.lovegrove@itpau.com.au

www.itpau.com.au