Outline
• Overview of energy sector• Bio-energy • Bio-fuels – Status and Trends
– Bioethanol– Biomass cogeneration– Biogas– Biodiesel– Biomass gasification
• Way Forward
Overview of Energy Sector
• Energy use in eastern and Southern Africa - dominated by biomass (wood, charcoal, bio residues)
• Low levels of access to modern energy services
Typical National Energy Supply
Others5%
Oil&Gas15%
Hydro/coal10%
Biomass/Woodfuel
70%
Biofuels – Key drivers
0
5
10
15
20
25
% o
f ex
port
ear
ning
s
Rwanda Uganda Kenya Tanzania Zimbabwe
Percentage Share of Export Earnings Spent on Petroleum Products, 2000
Biofuels – Key Drivers
• Rising oil costs • Lead phase-out programmes in
southern Africa• Declining biofuel production
costs – Ethanol• Carbon finance• Bio-ethanol and cogeneration
well developed in the region• Other biofuels at different stages
of development
Bioethanol – Status and Trends
• Widely developed in the region
• Linked mainly to sugar industry and cogeneration
• Ethanol produced in Zimbabwe, South Africa, Malawi, Kenya, Uganda, Ethiopia and Swaziland
• Plans to produce ethanol in Sudan and Zambia
• Ethanol blending practiced in Malawi
• Blending practiced in Zimbabwe and Kenya in the past
• Plans to introduce blending in South Africa if legislation is approved
Country Cane crushed (2002) Tons
Ethanol production potential*, 000 Liters (2002)
Kenya 5,904,108 413,288
Sudan 5,821,000 407,470
Tanzania 3,628,800 254,016
Malawi 2,095,065 146,655
Ethiopia 1,147,283 80,310
Uganda 1,707,000 119,490
Swaziland 6,861,600 480,312
* Estimated ethanol potential assuming an average of 70 litres of ethanol produced per tonne of cane crushed and that all cane is used for ethanol production (SEI, 2003; TaTEDO, 2006)
Ethanol Potential from Cane in Selected African Countries
Case Study – Ethanol in Malawi
• Ethanol production started in 1982 at Dwangwa Sugar Mill, run by Ethanol Company of Malawi (Ethco)
• Second ethanol plant was built in 2004 at Nchalo Sugar Mill run by Press Cane
• Both plants have combined capacity of 30 million litres per year
• The two plants are located to the countries sugar factories (Nchalo and Dwangwa)
Ethanol Production in Malawi (litres)
Source: Tembo, 2006
Year Ethanol Rectified
Portable Total To date
2000
11,625,036
352,019 211,319 12,188,374
199,363,988
2001
11,167,122
546,707 271,879 11,985,708
211,349,696
2002
10,987,543
431,256 345,786 11,764,585
223,114,281
2003
8,375,761
610,399 230,660 10,222,767
233,337,048
2004
8,375,761
751,567 275,837 9,403,165 242,740,213
Case study - Ethanol production in Kenya
• Kenya’s quest for alternative source of fuel sparked off by oil crisis in the 1970s
• The Agro Chemical & Food Corporation (ACFC) established in 1978 – with the objective of utilizing surplus molasses from sugar industry to produce ethanol
• ACFC installed capacity of 60,000 liters per day, daily average of 45,000 litres per day
• ACFC collapsed in the 1990s
Case Study - Ethanol production in Kenya
• Ethanol production revived in 2001 through Kisumu Ethanol Plant in Western Kenya
• Private entity Energem owns 55% of the company
• Produces 60,000 lpd of industrial ethanol
• Other products include: beverage grade, yeast, carbon dioxide, alcohol, portable alcohol for beverages and chemical industries
• Market for the ethanol: local market, Uganda, Rwanda, and Central Africa
Case Study - Ethanol Production in Kenya
Ethanol Production in Kenya
0
50,000
100,000
150,000
200,000
250,000
300,000
Mar-05 Apr-05 Feb '07 Future Projections
Lit
res
per
Day
(l/d
)
Source: Ethanol Producer Magazine
Ethanol - What worked
Building on an existing industry – both the Ethanol Companies in Malawi and Kenya piggybacked on the sugar industry
Government and private sector commitment – the Malawian and Kenyan governments created a conducive environment for private sector to invest in production, distribution and marketing of ethanol
Long-term commitment - Key players in the Malawian energy sector demonstrated long term commitment to biofuels through the testing of a car that can run on ethanol blended fuel
Ready local market – ethanol used in the blending of transport fuel up to 20% thereby reducing fuel imports
Biomass Cogeneration – Status and Trends
• Widely developed in the region - Most sugar industries in eastern and southern Africa currently practicing co-generation for own use
• Important option as agriculture and agro-industries account for close to 50% of sub-Saharan Africa’s GDP and over 70% of employment
• Sugar industry directly or indirectly impact on 4-7 million people in Western parts of Kenya
• Could be replicated across all agro-industries– Wood/timber, pulp and paper– Coffee, sisal, palm oil, tea, cocoa, tobacco, etc
Case study - Cogeneration in Mauritius
Successful in sale of power to the grid
Accounts for close to 40% of a 725MW national generation capacity (of which 25% bagasse)
Began with smaller installations (1.5MW - 5MW, now installing 70MW plants)
Grid connected cogeneration operational in Uganda, Kenya, Tanzania, Zimbabwe, and plans underway in Malawi, Ethiopia, Swaziland and South Africa
Others
Sugar Industry
Power Generation – Mauritius 2004
Sugar Sector Reform initiatives & Bagasse Energy
Year Policy initiatives Emphasis on
1985 Sugar Sector Action Plan
Bagasse energy policy evoked
1988 Sugar Industry Efficiency Act
-Tax free revenue from sales of bagasse and electricity-Export duty rebate on bagasse savings for firm power production-Capital allowance on investment in bagasse energy
1991Bagasse Energy Development Programme
-Diversify energy base-Reduce reliance on imported fuel-Modernise sugar factories-Enhanced environmental benefits
Case study - Cogeneration in Mauritius
Sugar Sector Reform initiatives & Bagasse Energy
Year Policy initiatives Emphasis on
1997
Blue Print on the Centralisation of Cane MillingActivities
Facilitate closure of small mills with concurrent increase in capacities and investment in bagasse energy
2001 Sugar Sector Strategic Plan
-Enhance energy efficiency in milling-Decrease number and increase capacity of mills-Favour investment in cogeneration units
2005
Roadmap for the Mauritius Sugarcane Industry for the 21st Century
-Reduction in the number of mills to 6 with a cogeneration plant annexed to each plant
Case study - Cogeneration in Mauritius
Energy PricingPower mode
Power Plant
Price – Rs (us ¢)/kWh
Year Characteristics
Intermittent
- 0.16 (0.6) 1982 Price frozen since 1982
Continuous Medine
0.55 (1.9) 1982 No change in price since 1982 –no changes brought to the plant
Continuous 6 PPs 1.05 (3.7) 1997 44% of kWh price indexed to changes in oil price and the other 56% is fixed1.40 (4.9) 2000
Firm FUEL coal - 1.63 (5.7)bag. - 1.56
(5.5)
1985 Invested in new equipmentIndexed to coal price
Firm DRBC coal - 1.53 (5.4)bag. - 1.46
(5.1)
1998 Invested in second hand equipmentIndexed to coal price
Firm CTBV both - 1.72 (6.0)
2000 Indexed to coal price, cost of living in Mauritius, foreign exchange rate fluctuations
Case Study - Cogeneration in Mauritius
Case Study - Share Ownership Of Cogen Plants
• Firm– Corporate sector 51%– Strategic Partner 27%– SIT (Small planters/workers) 14%– State Investment Corporation 8%
• Continuous– Corporate sector 80%– SIT (Sugar Investment Trust) 20%
• Equitable sharing of ownership of and revenue from cogeneration ensures even smallest low-income farmer gets a portion of revenue
• In turn, leads to exceptionally strong & consistent policy support
Cogeneration in Mauritius - Key Lessons
• Pre-determined feed-in tariff for cogen power which reduced investment risk
• Higher prices offered for firm power/utility level cogen electricity generation, which encouraged higher investments in cogen from sugar industry
• Government played “honest broker” key role in power purchase agreements and setting feed-in tariff (key factor) – reduced the lengthy and sometimes acrimonious tariff negotiations
• Centralization of sugar factories to capture the benefits of economies of scale
• Revenue sharing with even the smallest sugarcane farmers, which ensured long-term commitment
Biogas – Status and Trends• Some experience in the region with
mixed results
• Institutional digesters more successful than domestic units
• Tanzania has registered good progress - more than 4,000 domestic-size biogas plants have been in Tanzania during the past 20 years
• An estimated 256 biogas digesters installed in Zimbabwe
• Pilot biogas projects implemented in Kenya, Uganda, Ethiopia and Sudan
• Large scale biogas plant (10 MW) planned in South Africa using landfill gas
Source The Republic of Uganda,2007
Biodiesel – Status and Trends• Production of biodiesel drawing a lot of
attention in the region
• Technology still to be applied on a wide scale
• A number of crops already grown in the region suited for biodiesel production i.e. palm oil, sunflower, soyabean, maize and Jatropha
• Zimbabwe has ambitious Jatropha biodiesel programme
• A private South African company running Jatropha oil initiatives in Malawi, Zambia and Madagascar
• In Zambia, biodiesel trials conducted on a small scale using Jatropha
• Individual farmers running biodiesel plants in South Africa
• Pilot biodiesel projects in Kenya (Vanilla/Jatropha Foundation), Uganda and Tanzania (Tatedo)
Biomass Gasification – Status and Trends
• Largely embryonic- no commercial bio-gasification projects running in the region
• A few donor funded demonstration projects implemented
• Experimental systems reported at universities in South Africa
• Demonstration projects implemented in Tanzania (Tanzania Wood Industry Corporation)
• Biomass gasifiers implemented in Ethiopia, Sudan – faced operational challenges
Way Forward
• Short Term– Focus on proven options that build on existing
agro-industries that use available agro-wastes (such as bio-ethanol and cogeneration)
– Implement proven policy measures• Pre-determined prices for biofuels (feed-in tariff for
cogen power & attractive price for liquid biofuels)• Standard power purchase agreement for cogen power• Compulsory blending ratios for transport fuels
– Use model examples such as Mauritius to develop regional replication programmes & focal points of regional networks