ISBUC Third meeting Mauritius 29 June – 3 July 2009

1. The feasibility of implementing gasification technology in the sugar industry; an Australian perspective P.A. Hobson ISBUC Third meeting Mauritius 29 June – 3 July 2009

2. The feasibility of implementing gasification technology in the sugar industry; an Australian perspective • Gasification – initial interest • Drivers • Preliminary studies • Queensland Biomass Integrated Gasification program • Development of the business plan • Outcomes from the QBIG program • Subsequent work • Current directions • Pre-processing of bagasse (torrefaction) • Second generation biofuels

3. Early 1980s – Tests commissioned on catalytic gasification for methanol production (Battelle Labs, US) Renewable Energy (2000) Act Mandated 2% new renewable(9500 GWhe) capacity by 2010 continuing to 2020 $40 per MWh penalty for not meeting renewable power targets Preliminary SRI study on integrating gasification and factory operations (1998) Two-fold increase in power generation relative to conventional steam Precursor to Queensland Biomass Integrated Gasification project Australian milling industry and Sugar Research and Development Corporation Gasification – some preliminary studies

4. Preliminary study- impact of factory process steam (2 M tonne crop)

5. Preliminary study- impact of additional fuel on power generation efficiency

6. Preliminary study- year round power generation with additional fuel from trash(2 M tonne crop) Crushing season • Minimum bagasse consumed to meet process demands • Sufficient surplus bagasse/ trash stored to fully utilise gasifier and GT in off-season Off-season • All stored bagasse consumed

7. Preliminary study- whole of (Australian) industry export capacityCrop size 37 M tonnes

8. Preliminary study - site visits • Varnamo, Sweden • Sydkraft • 6MWe/ 9MWth • 22 bara, CFB • Maui island, Hawaii • IGT technology • 100 tons/ day • 21 bara, BFB • Burlington, US • Battelle technology • 200 tons/ day • 2 bara, indirect CFB • Morwell, Australia • HRL technology • 5 Mwe GT • 25 bara, CFB

9. Preliminary study – HRL IDGCC (brown coal) technology

10. Preliminary study – some conclusions • Approximately 100% increase in power export • Pressurised BIG/CC appropriate to Australian industry • Higher capital cost offset by greater efficiency for BIG/CC installations greater than 50 MWe • All mills would have a BIG/CC capacity > 50 MWe • For maximum efficiency potential • Process steam demand < 40% SOC; or • An additional 25% fibre • Pressurised feeding of bagasse is problematic • Low bulk density compared with other biomass • Bagasse ‘binds’ in screw feed systems • Large amount of additional fibre to fully utilise capacity in off-season • Additional 66% of existing bagasse supply • Approximately 350,000 tonnes storage for 2 M tonne factory

11. Development of the QBIG program • Project team • Formed prior to development of scoping study • Team members: • Power Industry - Stanwell Corporation Ltd • State Government – Office of Energy • R&D providers – SRI, University of Queensland • Scoping study/ business case • Critical assessment of conversion technologies • Evaluation of power export potential and GHG mitigation • Fully costed research plan • Study externally reviewed • Secured funding • A$ 5m • Power industry and State Government

12. Initiated in 2000 Ultimate aim of commercial demonstration of high pressure BIGCC Phase I – Strong focus on sugar industry specific feasibility issues Bagasse gasification kinetics Pressurised feeding Ash characterisation Fuel availability Financial viability Phase II - Demonstration Queensland Biomass Integrated Gasification program (QBIG)

13. QBIG – Gasification kinetics • Bench scale reactor • 900 °C • 25 bara • Entrained flow • Departure from TGA • Computational Fluid Dynamics (CFD) model • Implementation of char reactivity data • Assist Phase II design • Focus on char • Initial char yield • Subsequent char gasification rate

14. QBIG – Pressurised feeder • Bagasse particularly difficult to feed! • Continuous feeder developed • Tested to 25 barg • Minimal leakage with bagasse • Leakage problems with bagasse/ woodchip blend • Demonstrated at 75% of 15 MWth commercial demonstration scale • Design criteria: • High volume • Continuous • High pressure • Sealed

15. QBIG – fuel availability • Whole of cane biomass harvesting • Factory separation • QBIG separator: • Demonstrated at commercial scale (150 tch) • Low cane losses (< 1%) • High trash recovery (98%)

16. QBIG – Financial viability • Multiple scenarios - factory integration, fuel and operational • Conventional steam and IG/CC compared • Conversion of existing boiler to HRSG reduces capex for IGCC • Steam plant dominated by fuel costs, IG/CC by capital costs • Figures below based on 2000 – 2002 costs & revenues (very different now!)

17. Phase I Essentially complete Ash characterisation deferred to phase II Phase II Australian renewable energy target scheme inadequate Value of RECs lower than anticipated Initial projections of A$40 per MWh Actual value dropped to A$16 per MWh Bid at the time to increase 2% federal target to 5% rejected Escalating capital costs Decision by main stakeholders not to proceed QBIG – Outcomes

18. Major feasibility study Federal and Queensland state funded Sugar Industry Renewable Energy program Industry-wide staged introduction Technical and financial analysis Some findings include: Confirms QBIG economic study Optimum mix of conventional and IG/CC power would deliver 66% of the federal renewable target of 9500 GWh Capex 2.8 times conventional steam - a major impediment High cost of trash at A$15 - A$25 per tonne reduces IG/CC viability Lapse of federal governments renewable energy target in 2020 provides insufficient revenue certainty for emerging technology Integration of gasification in the Australian sugar industry

19. Mandated Renewable Energy Target Originally 9,500 GWh new capacity Extended to 45,000 GWh by 2020 Carbon Pollution Reduction scheme Implementation by 2010 Emissions reduction relative to 2000 Long-term target – 60% by 2050. Medium-term – 5% to25% by 2020. Current directions – what’s changed?

20. Current directions • Diversification - value adding to fibre • Current projects at QUT - fuel and chemicals • Flash pyrolysis for furfural production • Biorefinery demonstration plant • Ionic liquids for fractionation • Value adding to lignin • Hydrolysis of cellulose to C6 sugars – fermentation to ethanol • Direct liquefaction of bagasse • Hydrothermal liquefaction for bagasse fractionation • Phenolic compounds from lignin • Levulinic acid from cellulose • Torrefaction • Use of catalysts to reduce residence time • Impact of pre-processing on supply chain logistics and costs

21. Flexible – power, fuels, chemicals Efficient Power export increased by factor of 2.5 330 L ethanol per tonne dry fibre 140 L diesel per tonne dry fibre Issues Lack of commercial demonstration Economies of scale Material handling Transport Large scale storage Feeding Gasification technology

22. Coal-like energy density and handling properties Capitalises on decades of coal technology development Synergies with short and long term development horizons Conventional power generation (co-firing) Advanced cycle power generation (IG/CC, pressurised combustion) Coal to liquid fuel production (Fischer Tropsch hydrocarbons and alcohols) Emerging technologies (supercritical gasification, direct liquefaction, hydropyrolysis) Low technical and commercial risk Engineering challenge ‘reduced’ to development of a low pressure/ temperature pre-process Utilisation of significant existing coal R&D facilities Torrefaction as a pre-process - strategic advantage

23. 200° - 300°C Near atmospheric pressure Absence of air Residence time of 10 – 30 mins Volatilisation of hemicellulose component Feedstock thickness < 4cm Heating rate <50°C/min The torrefaction process off-gas 30 10 torrefied product dry biomass 70 100 Torrefaction 90 100 90 = 1.3 Energy densification = 1 x 70 Energy Mass

24. Typically 24 MJ/kg (HHV) Hydrophobic (maintains ~3% moisture) Stable in long term storage Friable 10% of the comminution energy required for untreated biomass Compatible with conventional coal milling equipment Readily pelletised 50% of energy required to pelletise raw biomass High residual lignin (bonding agent) Volatiles retained 50% to 60% volatiles retained Rapid combustion/ gasification A “smokeless” fuel Torrefied biomass

25. Supply chain study by Uslu (et al., 2008) Process efficiency Torrefied and then Pelletised Bagasse (TPB) - 94% Pelletised biomass - 84% Bio-oil (from flash pyrolysis) - 64% Cost of biofuel production using TPB 86% of cost using pelletised biomass 63% of cost using pyrolysis Comparison with other pre-processes

26. 1Kiel, J. (2007) IEA Bioenergy Task 32 workshop “Fuel storage, handling and preparation and system analysis for biomass combustion technologies”, Berlin Comparison of pelletised torrefied biomass (TOP) with pelletised and unprocessed biomass1

27. Preliminary financial evaluation Torrefaction plant Fischer Tropsch (FT) diesel Mill A Biomass to liquid fuel (BTL) plant Mill B 55 Year round operation Mill C 110 Maintenance season Mill D 165 Crushing season Mill E 220 km

28. Torrefaction - material inputs

29. Torrefaction - financial inputs

30. Storage & transport costs

31. Conversion efficiencies (energy basis) Biomass to syngas – 80% Syngas to FT diesel – 71% Capital cost based on Boerrigter (2006) Assumed same as CTL1 costs after pre-processing CTL estimated by inflating known GTL2 costs Additional reactor costs Additional oxygen enrichment Operating fixed percentage of capex Assume long term 50% excise discount or equivalent for renewable fuels Gasification and biofuel production 1CTL – “Coal to liquid fuels”; 2GTL – “Gas to liquid fuels”

32. Diesel production costs

33. TPB has lower transport costs than bagasse for distances greater than 100 km Break-even (15% IRR) oil price for diesel production 97 US$/ bbl without local TPB production and transport 76 US$/ bbl with local TPB production and transport Potential for further reduction in costs Accessing TPB from greater distances (i.e. > 200 km) TPB from biomass sources other than bagasse Co-firing in CTL plants (e.g. SASOL) Integration of advanced cycle power plants (IG/CC) Impact of pre-processing on gasification costs

34. In conclusion ... • Development of a good business case – worth doing well but can be a costly process • Ideally syndicate members should be identified prior to preparation of the business case • Peer review prior to issue • Robust financial analysis investigating key drivers • Look for highest value end product • Focus RD&D on sugar industry specific issues • Should be technically well differentiated from other/ previous projects • Minimise technical risk - look for opportunities to utilize proven/ commercial technology

35. Compagnie Sucrière du Sud and Queensland University of Technology for their sponsorship Jean Claude Autrey and Manoel Regis Leal for the invitation to attend this meeting Acknowledgements

36. Thank you