Our model stops people from burning waste, generate electricity and better quality of life. It is proven, scalable, profitable, and low risk
Summary. Our small-scale biomass power plant solves the problem of smog emissions in Thailand, which is caused by burning crops. Our plant utilizes local crop residuals that would otherwise be treated as waste, producing electricity to rural area with poor electricity supply. Our business provides economic sustainability to local communities. Our patented technology and its business model have been proved by operating the pilot plant in Thailand.
Problem. Remote communities in Southeast Asia suffer from poverty, electrical-supply shortages, smog emissions and forest fires. In these regions, sustainable businesses that employ business models of community engagement will be best positioned to achieve high financial returns, and positive environmental/economic benefits in target locations.
Our Plant. Our small-scale biomass power plants can tackle the issues above by setting up plant operations throughout the region. Our first plant was patented and built in Chiang Rai, Thailand in 2009. This pilot proved that our model profitable and embraced by the local population because of its social benefits to communities.
Expansion. Having demonstrated that our biomass plants can bring about a meaningful impact to the region, we are now looking to expand. We plan to build a 500kW plant (i.e., capacity to supply energy to 750 households) in Mae Hong Son province, Thailand; which has enough agricultural crops for our plant to operate and offers the highest government incentives. The amount required in financing is US $1.4 million. The associated IRR of this investment is approximately 25% over 3 years.
Risk Assessment. Our proposition is low risk due to our 10-year contract in place with the government. Our small-scale biomass plant is differentiated by its electricity generating scale which fits local communities. Our patented technology made us possible to provide this community-size plant. We are currently the only player in this market segment.
Fig1: the pilot plant in Chiang Rai
Grassroots neighborhood organizations
What actions do you propose?
We propose the Community Power Plant Model, which spreads small biomass power plants (up to 1 MW) across agricultural areas in Thailand and internationally. The plant implements gasification technology, which is optimized for small-scale deployment to produce electricity from crop residues, such as corncob. The plant’s closed system, non-boiler operation and patented filtering technology are safe for the environment. Implementation of this model will improve the supply of electricity to agricultural areas that suffer from poor infrastructure. In addition, local farmers can sell crop residue to our plant, motivating them to avoid burning waste.
Current competitors focus on large-scale plants that raise raw material management and local acceptance issues because communities do not want a big power plant and boiler next to near their homes. Therefore we offer small-size plants. One of our core strengths is our patented, proven filtering technology; which is a vital part to prevent damage caused by tar. This is the point that other competitors have not been able to develop.
We also established a MOU with the University of Agriculture, Thailand to deal with the unstable supply of agricultural crops. The university will monitor and forecast supply levels of feedstock, and undertake the plantation plan of giant king grass, which is the secondary feedstock, to hedge the risk of feedstock shortage.
Fig2: The pilot plant in Chiang Rai
Fig3: Gasification system in the pilot plant
Fig4: Corncob and wastewood as feedstocks
Fig5: Business Model
Who will take these actions?
We will establish a company in early 2014 to commercialize the biomass power plant and encourage deployment of the community biomass power plant model.
Our team has a range of professional experience and is well-balanced. Two have strong engineering backgrounds, and will be utilized for implementation of plants and further R&D. One member has strong connections with governments in Southeast Asia. International business development experiences of a member are useful for developing partnership with government and local community and for further expansion in different countries. One has strong financial background to ensure our endeavors achieve high IRRs. Another’s grassroots marketing experiences will provide leadership in the development of strong relationships with local communities and to attract additional communities in new markets. In addition, our diversified nationalities and background are beneficial to expand our business all over the world.
We also need to secure support from the government, such as financial support for further R&D, and favorable legislation to accelerate the success of this project.
Where will these actions be taken?
We aim bring electricity to places where there is poor power. As the initial target, we aim to build small plants in remote agricultural areas in Southeast Asia. Within potential locations, Mae Hong Son province in Thailand is our first priority, because 1) it is the most critical area encountering smog problems, 2) has the poorest electricity stability now relying on diesel generator, 3) has rich resources of biomass, and 4) offers the highest government incentives. Addition to Mae Hong Son province, additional target markets for expansion include Cambodia, Myanmar, Laos, Indonesia or Australia.
How much will emissions be reduced or sequestered vs. business as usual levels?
In the case of the pilot plant that launched in Chiang Rai province, Thailand, the Pollution Control Department surveyed the air quality in the surrounding area and estimated emissions caused by the burning of agricultural waste. It was determined that key pollutants (CO, NOx, SOx, PM10, and VOCs) were reduced by 280% in 2010 after the implementation of our pilot plant. However, the carbon footprint and further assessment have not yet been conducted.
What are other key benefits?
In addition to emission reductions, other benefits include:
1) Energy security: The country can solve its energy supply crisis without encountering resistance or protests from the community or NGOs. Additionally, local communities will have access to renewable energy.
2) Additional income from sales of crop residues and employment: Local farmers can get additional income opportunities by selling crop residues which is used to be just burned. In addition, our automated operation at power plant makes us possible to hire unfamiliar people for energy industry. This leads us to hire local farmers as employees
Overall, our community power plant model will help improve the quality of life of local communities in Thailand and reduce social discrepancy in the region.
What are the proposal’s costs?
The total investment cost is $1.4 million for a 500kWh plant in Mae Hong Son, Thailand. This amount will be financed by 25% Equity and 75% Debt. The projected IRR for the investors is expected to be 25%, with full repayment for investors’ funds within 2017.
Q1 of 2014: Initiate the application and licensing process for Thai government to implement Mae Hong Son plant.
Q3 of 2014: Start the construction of Plant.
Q2 of 2015: Begin Plant operation.
2017: Repayment to investors.
2018: Spread the plant to other areas.
Kongbuamai, N and Remmen, A 2012, ' BIOMASS TO ENERGY IN THAILAND: AN INSTITUTIONAL PERSPECTIVE ON THE CHALLENGE OF VERY SMALL PROJECTS IN CHIANG RAI', paper presented at the 1st Mae Fah Luang University International Conference 2012, Chiang Rai, Thailand, 29 - 30 November 2012, viewed 12 July 2013, < http://mfuic2012.mfu.ac.th/electronic_proceeding/Documents/00_PDF/O-SC-D/O-SC-D-009.pdf>.
Assanee, N and Boonwan, C 2011, ' State of The Art of Biomass Gasification Power Plants in Thailand', paper presented at the 9th Eco-Energy and Materials Science and Engineering Symposium, Chiang Rai, Thailand, 25 - 27 May 2011, viewed 12 July 2013, < http://www.sciencedirect.com/science?_ob=MiamiImageURL&_cid=277910&_user=10&_pii=S1876610211017851&_check=y&_origin=article&_zone=toolbar&_coverDate=31-Dec-2011&view=c&originContentFamily=serial&wchp=dGLbVlt-zSkWz&md5=c1d8723ee4912869bbb05a22704ed343&pid=1-s2.0-S1876610211017851-main.pdf>.
Kumar, S. and Salam, A 2010. The status of Biomass Gasification in Thailand and Cambodia. Bangkok: Energy Environment Partnership (EEP), Mekong Region . viewed 12 July 2013,<http://www.eepmekong.org/_downloads/Biomass_Gasification_report_final-submitted.pdf?>