COGENERATION in BELIZE Diversifying the Sugar Cane Industry By Robert Tillett Chief Plant Engineer Belize Sugar Industries Limited

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COGENERATIONin BELIZEDiversifying the Sugar
Cane IndustryBy Robert TillettChief Plant
EngineerBelize Sugar Industries Limited
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Presentation Outline

• Contribution of the Sugar Industry to Belize
• World Leaders in Sugar
• Rationale for Cogeneration in Belize
• Brief Project Description
• Challenges and Benefits of the Cogeneration
  Project

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Key Characteristic of the Belize Sugar Cane
Industry

• Private Sector Led, Owned and Managed
• Only one sugar factory processing 1.25 M
  tons of cane
• Belize Sugar Industries, Limited is the
  Cane Processor
• 95 of cane is grown by independent cane
  farmers
• Belize Cane Farmers Association represent
  9000 Farmers
• Government regulates through the Sugar Act
  of 2001
• Belize is the Leader in the Caribbean
  Lowest cost producer and
  highest factory efficiency

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7000 tons cane per day 300 tons cane per
day 10000 tons PWS 110000 tons Commercial Sugar
BSI Factory
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CONTRIBUTION OF SUGAR SECTOR

• 10 yr Avg 1995 - 2004
• Numbers Employed 9672
• EMPLOYMENT
• As A Percentage of
• National Working 13.0
• Population
• As A Percentage of
• National Employment in 46.3
• Agriculture

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CONTRIBUTION OF SUGAR SECTOR

• 10 yr Avg 1995 - 2004
• ECONOMY
• Sugar Industry Revenue
• as of GDP 7.8
• Sugar Industry Revenue
• as of Total Agricultural
• Production 56.9

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CONTRIBUTION OF SUGAR SECTOR

• 10 yr Avg 1995 - 2004 FOREIGN EXCHANGE
• EARNINGS
• USD (Million) 42.1
• of Value of
• Domestically
• Produced Exports 26.7
• of Value of
• Agriculture Exports 33.6
• NB Average Foreign Exchange Earnings projected
  to be USD 44 Million in the next 5 yr period.

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Belize 0.12 Million Tons
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Belize 0.10 Million Tons
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Drivers for Change

• Evolution of International Competitive Market
• Industry Stakeholders Vehicle for Increased
  Economic and Financial Returns
• Constant Need to Effectively Manage Risk Facing
  the Business through Strategic Development

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Facilitators of Change

• Industry Structure
• Regulatory Framework Changes
• Power Market Liberalization
• Competitive Product Pricing

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• Towards Diversification -
  Cogeneration
• The Sugar Industry in Belize remains strong
  and viable, but is pursuing growth opportunities
• It has experienced Steady Cane Production but
  there is scope for increased field productivity
• However Need to Mitigate the Impact of
  External Shocks eg.
• Exposure to increased freight, transport and
  insurance cost
• Threats to Existing Markets

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• External Market Threats
• Successful WTO challenge to EU Regime by
  Australia, Brazil, and Thailand
• Loss in revenues due to EU price reductions of
  36 by July 1, 2009
• General Market Trend - reduce price but
  increase quality demand
• Previous Oversupply of Sugar to the World
  Market

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• Cogeneration will help address Belize Energy
  Sector Needs by
• Meeting Government National Security Interest to
  reduce reliance on imported energy supply
• Fulfilling Sector Policy of Promoting
  Renewable Energy Sources
• Provide much Needed additional Capacity
  and Energy to the National Grid
• Facilitate Displacement of Fossil Fuel
  based Energy and Import Substitution
• Prove the IPP Model and Regulatory
  Processes
• Reduce Foreign Exchange Demand especially
  long-term

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National Grids Generation Mix
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Projected Generation Mix with Cogeneration
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COGENERATION PROJECT OVERVIEW
Project is the initiative of BSI as Project
Promoter BSI has engaged Booker Tate as the
Project Developer Owned and Operated as a
Private Sector Commercial Operation by
Belize Cogeneration Energy Limited (BELCOGEN)
Supply approximately 20 of the National Energy
Demand by 2009 (15 years commercial PPA with
BEL) Generate Power and Steam to Supply Tower
Hill Factory (20 years power and steam agreement
with BSI) Commercial Operation Date December
2008 Financed by 55 Debt and 45 Equity
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Projected Allocation ofCapacity and Energy
Production

• Grid IPP BSI
  Total
• Capacity MW 13.5 2.5 9.0 25.0
• Energy Supply GWh 106 18 44 168
• Time Utilization 90
• Represent 20 of grid demand by 2009 and
  therefore must be efficient, reliable, stable
  base load and environmentally sound.

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Project DescriptionKey Project Technical
Parameters

• 1.25 M tons of cane
• 430,000 tons of bagasse to IPP
• 585,000 tons of process steam to BSI
• Two Boilers 90 t/hr, 900 psi (64 bar), 900
  deg F (480 deg C)
• 32.5MW Installed Capacity Cogeneration
  Power Plant, this includes
• Extracting Condensing Steam Turbine 15 MW
• Back Pressure Steam Turbine 12.5 MW
• Two Parallel HFO Generators each 2.5 MW

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• Cogeneration - Environmental Credentials
• Positive Environmental Impact and meets
  World Bank Environmental Standards
• Reduce Air pollution from stack emissions to
  below 100 mg/normal meter cube
• No Water Pollution from Cogeneration and
  provide additional power to BSI for Water
  Treatment
• Rigorous Environmental Monitoring in
  compliance with the Equator Principles
  comprising Environmental Compliance, Social
  Responsibility and Corporate Governance

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Challenges to Project Development

• Still Viewed by Many as a New Niche Sector
• Few Economies of Scale given most Plants in the
  20 50 MW Range
• Significant Capital Investment, Total Project
  Cost US 1.4 2.0 Million/MW
• Historically Renewable Energy Sources has not
  been competitive to Fossil Fuel Sources
• Security of Fuel Supply bagasse is largely
  location specific, while fossil fuel is a more
  unlimited commodity

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Challenges to Project Development

• Constraints on Finance Resources
• Regulatory Process and Framework for IPP model
• significant learning curve also having to compete
  with differing energy sources
• BELCOGEN is an Energy Sector Power Plant,
  Independent of Sugar Sector
• Change in Mindset
• Robust Contractual Framework which Penalizes
  Poor Performance
• Need Government Support and Political Will

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CARBON CREDITS

• Carbon market undeveloped but expanding rapidly
• Opportunity to Access Clean Development Mechanism
  (CDM) Funds
• Baseline Study to Quantify Carbon Credits and
  project design documents are presently being
  developed and funded by BELCOGEN
• Valuation yet to be confirmed

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BSI Achievables

• BSI must
• Be financially independent of BELCOGEN
• Convert in a Single Repair Season 50-60 Hz
• Be Steam and Power Efficient
• Process 1.25 million tons of cane
• Achieve 82 Overall Time Utilization
• Achieve 47 tons fiber per hour

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• Cogeneration will Strengthen the Sugar Cane
  Industry
• Provide for Value Added Income To BSI
• Provide opportunity for Sugar Industry
  Expansion to Increase Throughput and to Add
  Value
• Provide Steam Thermal Energy
• Provide Power Electrical Energy
• Provide Investment Opportunity, Security and
  Expansion of Market To Farmers
• Establish Project Development Credentials
  Amongst International Financiers for future
  Diversification Initiatives

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This has been a presentation of Cogeneration
in Belize By Robert TillettChief Plant
EngineerBelize Sugar Industries LimitedThanks
for Your Attention!!!