STUDY ON AGRO-BIOMASS POTENTIALS AND LOGISTICS FOR SUPPLYING HEAT ONLY PRODUCTION SENTA AND/OR COMBINED HEAT AND POWER PRODUCTION IN SENTA

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1 STUDY ON AGRO-BIOMASS POTENTIALS AND LOGISTICS FOR SUPPLYING HEAT ONLY PRODUCTION SENTA AND/OR COMBINED HEAT AND POWER PRODUCTION IN SENTA Photos by Foragrobio cc doo 2016 GIZ DKTI Prepared for: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH DKTI- Development of a Sustainable Bioenergy Market in Serbia Bože Jankovića Beograd Prepared by: Vojislav Milijić, Foragrobio cc doo Sumska 9-III/1, Subotica July, 2016

2 Table of Contents List of tables List of figures List of charts List of abbreviations Table of Contents 1. Executive summary Definition of tasks Methodology Status Quo Analysis Background Municipality of Senta Senta District Heating System Biomass potentials and realistic biomass supply of Municipality of Senta Specification of relevant biomass types Agro-Biomass: Harvesting Residues Wood Biomass: Harvesting and Wood Industry Residues Biomass demand for two types of biomass plants Combined Heat and Power Plant Heat Only Production Plant Biomass supply and logistics Biomass market situation in Senta supply area Identification of potential supplies Technical requirements and machinery for sustainable biomass supply Supply chain management (contracting, delivery, quality control) Biomass storage, preparation and take-in systems and ash disposal Biomass storage Straw handling and preparation for combustion Ash handling Legal aspects related to biomass utilization Financial analysis and economic indicators of biomass supply Investment costs Operational costs Incomes Economic indicators (NPV, irr, BCR, Sensitivity) Financing options for biomass suppliers Stakeholders analysis Conclusions Literature and Sources Annexes Annex I: List of interviewed persons List of Tables T-1: Basic information about Senta municipality... 9 T-2: Basic info on Senta DH system... 9 T-3: Relevant types of biomass fuels T-4: Share of agricultural land in potential supply zones T-5: Most important crops T-6: Annual quantities of agricultural harvesting residues in Senta supply zones T-7: Forest area, wood production and annual quantities of wood harvesting residues T-8: Basic data in case of CHP scenario in Senta T-9: Basic data in case of Heat only production scenario in Senta T-10: Straw prices in Vojvodina T-11: Straw suppliers in Vojvodina T-12: Basic straw supply calculation Page 2 of 51

3 T-13: Number of bailers T-14: Straw mobilization machinery and equipment prices T-15: Straw price correction factors T-16: Period of straw collection and storing T-17: Quantities and timing of straw delivery and consumption T-18: Nutrient content of different ash types from straw combustion T-19: Regulation related to straw and chicken litter combustion T-20: Investment costs for supply Senta CHP/HoB options T-21: Operational costs T-22: Incomes T-23: Costs, incomes, balance, irr and BCR for CHP and HoB Options T-24: Straw Supply SWOT for CHP and HoB Options in Senta List of Figures F-1: Position of Senta... 8 F-2: Senta DH system F-3: Biomass supply zones F-4: Straw bales F-5: Gathered straw prepared for baling F-6: Straw baler in operation F-7: Straw bales F-4: Agro-biomass logistic concept F-8: Straw gathering F-9: Balling of Corn Stalk F-10: Corn Stalk bale F-11: Self-loading bale trailer F-12: Telehandler manipulating with straw bales F-13: Telehandler unloading the straw cargo F-14: Open field straw storages F-15: Potential locations for CHP or HoB and storage space F-16: Available land in Senta industrial zone F-17: Road and available land in Senta industrial zone F-18: Main Electric station in Senta industrial zone F-19: Connection point to DH system inside Sugar Plant F-20: Straw divider, push feeder and combustion grate manufactured by WEISS A/S Denmark F-21: Straw combustion flow F-22: Ash storage; example picture from Denmark List of Charts C-1: Land structure in Senta supply zones C-2: Sensitivity analysis for CHP and HoB supply Page 3 of 51

4 List of abbreviations BMZ German Federal Ministry for Economic Cooperation and Development CHP Combined Heat and Power DH District Heating DKTI Deutsche Klima Technologie Initiative EU European Union EUR, Euro HoB Heat Only Boiler HP Horse Power GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH) GIZ-DKTI Program for the Development of a sustainable Bioenergy Market in Serbia ha hectare kw Kilowatt kwh Kilowatt Hour m³ cubic meter m 2 square meter MW Megawatt MWh Megawatt hour PE Public Enterprise PPP Public-private partnership Ton, t metric ton Page 4 of 51

5 1. Executive summary Within 50km radius from Senta there is over 490,000ha of agricultural land. All agricultural land in the area is managed by private companies or farmers. Land ownership structure and land size classes, along with terrain features, provide favourable basic preconditions for feasible supply organization and cost efficient biomass mobilization. Total amount of harvesting residues from agriculture, which can be considered as realistically collectable is over 480,000tons. Wood biomass potentials are very limited sine this region of Serbia has the lowest forest share and total collectable forest residues in defined area are below 1,000tons. Options of using communal wood residues or wood processing residues are not feasible due to very low availability, thus development of biomass solutions based on agricultural harvesting residues is the only feasible option. Biomass demand is analyzed in two scenarios: development of Combined Heat and Power Plant (CHP) and development of Heat only boiler producing only heat energy. Biomass demand in case of CHP is calculated at 38,000tons, while maximal demand for heat only production plant in Senta is 7,500tons per year. Both in case of CHP or heat only production demand can be covered by utilizing harvesting residues in 25km radius from Senta. Main demand drivers on agro biomass market in the region derive from: compost producers, chicken and cattle farmers, agro pellet and briquette factories and farmers and companies producing energy from harvesting residues. After mobilization of harvesting residues, straw suppliers are finally selling the straw at the price range of 38 to 42 EUR per ton, delivered to a buyers destination in 50km range from straw mobilization point. It can be expected that future organization of heat production and delivery or combined heat and power production will be in the frame of private public partnership between private investor in production side and the municipality in heat delivery side. It can be expected that private partner is responsible for supplying necessary fuels. There are several options: private partner can organize straw mobilization alone, having contracts of straw takeover on the field and delivering straw to the plant; or private partner or municipality directly can make contracts for straw delivery on site with existing or new companies specialized for straw mobilization. Main challenge in straw supply is in the fact that harvesting residues are collected in short period of the year and need to be stored until consumed this means that one or several storages need to have enough space to provide storing of annual biomass demand. Thus storing agricultural biomass straw in bales requires plenty of space. Total investment in machinery and equipment for straw supply in case of CHP is 2,000,000EUR, while in the case of HoB it is 600,000EUR. Total annual operational costs related to organize straw delivery in case of CHP are 1,152,000EUR, while in case of HoB total annual operational costs are 231,000EUR. In case of unit price for straw delivered to a combustion site of 40EUR/ton, total annual incomes in case of straw delivery to CHP are 1,520,000EUR, while in case of HoB total annual incomes are 300,000EUR. Benefit cost ratio in case of supply to CHP is 1.11, while internal rate of return is 11.92%. Investment with calculating replacement of the machinery in every 5 years, should be repaid in 10years. In case of HoB Benefit cost ratio is 1.03 and internal rate of return is only 2.09%. The investment can be completely repaid in 20years - this way the price of straw for HoB supply have to be higher than 40EUR per ton. Supply of straw based CHP or HoB production are technically and financially feasible in Senta. However, there are differences in supply profitability and organization, mainly related to the quantities of harvesting residues to be processed, stored and supplied. Major financial differences of analysed models lie in the level of the investments needed for efficient organization of straw mobilization and quantities of straw to be supplied, which can amortize and justify necessary investments in machinery and the equipment. Stakeholders analysis has shown that municipality officials and existing straw suppliers are interested for development of CHP or HoB. On the other hand, local agricultural advisory service is against removal of harvesting residues from field, while farmers are willing to sell the straw at fair prices. Page 5 of 51

6 2. Definition of tasks Study on Agro-Biomass is developed as activity of the project: Development of Sustainable Bioenergy Market in Serbia implemented jointly by KfW and GIZ and funded by German Federal Ministry for Economic Cooperation and Development (BMZ). Objective of Consultants assignments in completion of the Report consisted of determination of: 1. Biomass potentials and realistic biomass supply of Municipality of Senta o Specification of relevant biomass types o Agricultural residues (solid types like straw from different crops, corn-cobs, husks, etc.) o Wood based biomass (residues from forestry, industrial sector) o Municipal waste (wood cuttings, construction wood) 2. Biomass demand for two types of biomass plants: o CHP o Heating plant (Heat only) 3. Biomass supply and logistics: o Biomass market situation in North Backa county o Identification of potential supplies (specialized agro biomass mobilization companies, major crop producing companies, cooperatives and farmers, etc..) and their potentials and propensity for supply in terms of quantity, quality and other properties o Technical requirements and machinery in use respectively necessary for sustainable biomass supply o Supply chain management (contracting, delivery, quality control) 4. Different biomass preparation and take-in systems and ash disposal o Biomass storage o Types of straw and other biomass shredder systems including fuel-mix preparation o Types of take-in systems of different biomass-types (from storage after preparation into combustion chamber) o Ash handling 5. Legal aspects related to biomass utilization 6. Financial analysis and economic indicators of biomass supply organization and financing options: o Investments in machinery, equipment, storage, quality control o Operational costs o Economic indicators (NPV, irr, BCR, Sensitivity) o Financing options for biomass suppliers 7. Capacity building of Senta agricultural advisory service for data preparation o Briefing on the methodology for specification of different biomass types o Determination of technical potentials and realistic biomass supply o Overview on technology and machinery used in biomass harvest and logistic chains o Determination and structure of information needed for potential biomass supply for City of Senta district heating system Envisaged result of the Study is that Agro-biomass potential and logistics study for Senta has been successfully develop, containing essential information and data for potential investors. Study was prepared by Foragrobio CC doo 1 and submitted in July Page 6 of 51

7 3. Methodology Methodology implemented in the preparation of the report consisted of following steps: - Analysis of related literature, regulations and other sources related agro and wood biomass, equipment, logistics and municipality in question; - Development of semi-structured interview questionnaires and checklists for information provision; - Identification of relevant stakeholders to be interviewed and scheduling interviews; - Meeting and/or face to face interviews with relevant stakeholders; - On site analysis of potential locations for CHP/DH plant and biomass storages. - Design of biomass supply concept including investment and operational costs assessment; - Financial analysis including economic indicators; - Comparative analysis of CHP and DH solutions in terms of biomass supply; - Reporting. Literature and sources review was focused on obtaining information about municipality of Senta and DH system situation and development. In addition, Serbian regulation related to agriculture, land use, waste, forestry, wood industry, environment, transportation, construction and local administration was also analyzed for definition of adequate biomass supply solutions. Statistics about agricultural and wood production were also analyzed for determination of biomass potentials. Open semi structured interview questionnaire and information checklist were developed for provision of relevant information and additional data from representatives of the municipality, sugar plant, potential biomass suppliers and other relevant stakeholders. Meetings and face to face interviews were carried out in the period of 1 st of June to 24 th of June 2016, along with onsite analysis of possible biomass storages locations. Biomass availability was calculated based on agricultural and wood production statistics for Senta and surrounding municipalities for different types of biomass fuels, based on crop/yield or product/yield ratio. Agro biomass supply concept was designed based on the literature review, local conditions, stakeholders inputs, logistic preconditions and available best practice examples. Investment and operational costs assessment was also based on review of relevant sources and information provided by interviewed stakeholders, construction standards and equipment distributers. Financial analysis, based on defined investment and operational costs, included application of methods for calculation of net present value, internal rate of return, benefit-cost ratio, period for return of investments and sensitivity analysis. Stakeholders analysis was performed, based on attitudes of different stakeholders relevant for agricultural biomass supply chain organization and management. Finally, comparative SWOT analysis of DH and CHP solutions was performed according to defined biomass demand, availability, logistic aspects, financial and economic indicators and stakeholders analysis. Report was prepared and submitted to GIZ DKTI comments on 1 st of July Report was reviewed and revised version was submitted to GIZ DKTI on 12 th of July Page 7 of 51

8 4. Status Quo Analysis Background Chapter bellow provides basic background information about Senta Municipality and its district heating supply system Municipality of Senta Map of Senta Municipality presenting its position in Serbia, along with municipal boarders and major roads is presented in a figures bellow. F-1: Position of Senta Map data 2016 Google Municipality of Senta is situated in Norther most part of Serbia Vojvodina province, Northern Banat County. Senta borders municipalities of Kanjiza, Coka and Ada in Northern Banat County and municipalities of Backa Topola and Subotica in Northern Backa county. Basic information on Senta municipality are presented in table below. Page 8 of 51

9 Info/Municipality Senta Area km No of settlements 1 urban+ 4 rural Urban population 18,704 Rural population 4,612 Total population 2 23,316 T-1: Basic information about Senta municipality Around 23,000 inhabitants live in municipality of Senta, from which almost 19,000lives in the town of Senta. Other inhabitants live in villages of: Gornji Breg, Bogaras, Tornjos and Kevi. Majority of Municipality population (79%) is Hungarian, followed by Serbs (10%) and others. Senta is among 20 most developed municipalities in Serbia. Most developed economic activities are industry, agriculture and trade. Industrial companies in Senta include sugar factory (TeTo Senta), tobacco factory (JTI), yeast factory (Altech), automotive components (Tisza Automotive), industrial equipment factory (Rasco-Tamp), metal processing factory (Mecafor), shoes factory (FAS shoes), grain processing factory (Zitopromet) and others. Rich in high quality arable land, farmers from Senta are significant producers of industrial crops, vegetables, grains and cattle Senta District Heating System District heating systems of Senta was developed and operated by Senta Sugar Factory TE-TO A.D. Basic information on district heating system is presented in a table below. Info/Municipality DH operator DH distribution Heat production capacity(mw)/ Total number of consumers Heat production/heat delivery T-2: Basic info on Senta DH system Senta Senta Sugar Factory Public Company Elgas 25MW steam boilers on natural gas 413 individual houses 1,705 apartments 259 offices 2013/ ,818.70/20,559.55MWh 2014/ ,830.55/18,691.70MWh 2015/2016 (until January) 15,460.20/11,253.51MWh Senta district heating system was developed from 1979 to It consists of 29km of pipeline network with 53 substations. Total number of consumers, including individual houses, apartments and office space exceeds 2,000. Heat is produced in steam boilers with total capacity if 25MW inside Sugar Factory. In average around 25,000MWh of heat energy was annually produced and up to 20,000MWh was delivered to the customers by Sugar Plant. Heat was produced from natural gas, which is also used in Sugar Plant industrial process. Until season , Senta Sugar plant was selling the heat to the heat consumers, via Public Company Elgas. In addition, until April 2016, even a pipeline network was owned by the Sugar Plant. Having in mind that Sugar Plant was privatized in 2002, and that heat production was never a core business of the plant, district heating system was not regularly maintained with only urgent repairs, which resulted in significant heat losses in distribution. In April Municipality of Senta signed the contract with Senta Sugar Plant to take over the ownership of the network. In the middle of heating season, Sugar Plant announced it will no longer sell the heat anymore, since it is not profitable. In addition, major shareholder of Senta Sugar Plant, the Italian company Finanziaria Saccarifera Italo-Iberica S.p.A sold their shares of the plant to Serbian company Sunoko, owned by MK Group. However, the sale of Senta Sugar Plant to Sunoko, was not yet approved by Serbian Anti-Trust commission, considering that Sunoko already owns and operates 3 out of 6 sugar factories in Serbia. In the meantime, Senta Sugar plant is financially blocked in the legal vacuum emerged in take-over process. 2 According to 2011 Census - Page 9 of 51

10 Map data 2016 Google F-2: Senta DH system In 2013 Municipality of Senta and Dutch-Belgium Company Windvision Biomass Operations signed a Cooperation Protocol for construction on agro biomass based CHP, with total production capacities of 4.9MWe/8.4MWth. Heat delivery to Senta DH system was also the part of the project. However, apart from buying a land plot inside the industrial zone, the private company haven t done further steps in CHP development. Therefore, the status of the heat delivery in Senta remained pledged to the Senta Sugar Plant operations. Having in mind situation with the Sugar plant Senta municipality decided to develop or participate in the development of district heating solution independent from the Sugar plant, alone or in public private partnership. Page 10 of 51

11 5. Biomass potentials and realistic biomass supply of Municipality of Senta Realistic biomass potentials where analyzed in regard to different types of biomass based fuels which can be utilized in heat and/or heat and power production for Senta. Biomass potentials were determined for immediate zone in radius of 25km from Senta, and extended zone with radius of 50km from Senta. Immediate zone for supply encompass biomass resources of municipalities Senta, Kanjiza and Ada on the right bank of Tisza river and municipalities Novi Knezevac and Coka on the left bank of Tisza river. Also small part of the resources of Kikinda and Novi Becej municipality can be included in this zone. However, due fact that there are only 2 bridges over Tisza between Kanjiza and Novi Knezevac and Senta and Coka, where biomass can be transported, to certain extent, increases transport distances of immediate zone outer parts. Immediate zone medium transport distance to Senta is calculated at 12.5km, with 25km as maximum. Considering road curves and bridges, we can use 15km as medium and 35km as maximum. Extra zone for supply apart from municipalities Senta, Kanjiza and Ada, included Subotica, Backa Topola, Mali Idjos, Srbobran and Becej on the left bank of Tisza and municipalities Novi Knezevac, Coka, Kikinda and Novi Becej on the right bank of Tisza river. Apart from mentioned bridges between Senta and Coka and Kanjiza and Novi Knezevac, there is bridge between Novi Becej and Becej which can be used for biomass transport. Extra zone medium transport distance is 25km with 50km as maximum. Considering road curves and bridges, we can use 35km as medium and 70km as maximum distance. Availability of different biomass types was calculated based on available and official statistical data 34 on five or four 5 year average production of different agricultural crops and wood. Following the findings of different studies 6 and attitudes expressed in different debates, the discussion how much of the available agricultural residues are sustainable available the opinions are quite controversial. On one hand there are attitudes that agricultural residues should be ploughed in order to increase the quantity of humus in the soil and consequently the soil fertility. On the other hand, livestock farmers partially are using the straw as bedding material thus producing the manure which is applied on the field. Also, straw with a high calorific value is still burned on the fields in Vojvodina without further use. Furthermore, the use and yields of straw are depending on the varieties, the climate and soil conditions as well as on the applied harvesting technologies and experience of the farmers. Of course also the market price of straw is a major decisive factor. In context with the above mentioned arguments the share of 30% to over 60% of the total estimated biomass quantities can be sustainable considered to be taken from the agricultural land without jeopardizing the soil quality. In order to follow a conservative approach and taking under consideration, that minor experience of straw supply for biomass plants exists in Vojvodina, the percentage of 30% as realistic sustainable agrobiomass potential is considered in this study to be on the safe side. 3 Regions and Municipalities in Serbia 2011, 2012, 2013, 2014 and Serbian Statistical Office kabiblioteka2/pretraga.aspx?pubtype=1 4 Agricultural Census for Serbia. Serbian Statistical Office Data about crop production for every municipality in Serbia for wheat, corn and industrial crops are published in publication Regions and Municipalities in Serbia until In publication from 2015, data about crop production were not published. 6 Kaltschmitt, Hartmann, Hofbauer. EnergieausBiomasse.Springer, 2009; Prof. Dr. Dusan Gvozdenac Study report: Development of Biomass Market in Vojvodina, University of Novi Sad, Faculty of Technical Sciences, Provincial Centre for Energy Efficiency, Novi Sad, 2010; Faculty of technical Sciences. Martinov, M., Viskovic, M., Bojic, S., Dumnic, B., Golub, M., Krstic, J. Study report: Study of Spatial Placement of Public Storage for Agriculture Biomass in Vojvodina. Provincial Secretary for Energy and Mineral Resources of Vojvodina; Faculty of technical Sciences. Martinov, M., Viskovic, Djatkov, Dj, Golub, M., Krstic, J. Study on Collecting, Storing and Processing of Corn Stalk as Energy Source and Biofuel Raw Material in Vojvodina. Provincial Secretary for Energy and Mineral Resources of Vojvodina; Page 11 of 51

12 F-3: Biomass supply zones Considering scarcity of forests in this part of Serbia and forest cover of up to 5% in assessed municipalities, and very high demand for poplar wood which is dominant and hardwood firewood, which is very seldom, only amounts of forest residues are calculated as potentially available. Usual share of forest residues in gross harvests in such forest stands varies between 8 and 15%, however not all quantities are collectable, therefore conservative share of 5% of residues in total harvest as collectable is applied Specification of relevant biomass types Table below presents basic types and features of biomass fuels which can be mobilized in proximity of Senta and used for combustion in heat and/or electricity production. Category Fuel Product/ Residue ratio Agro-biomass: Harvesting residues Wood biomass: Harvesting residues Wood industry processing residues Water content when collected % Heating value MJ/kg Ash content % Ash melting point C o Wheat Straw 1: % Soybean straw 1: % ,000 Corn Stalk 1: % ,000 Sunflower harvesting residues 1: % Forest residues 8-15% 35-45% ,400 Landscape management residues Fruit crate production residues Not applicable 35-45% , % 20-30% ,400 Sawmill residues 30-50% 20-30% ,400 T-3: Relevant types of biomass fuels Detailed analysis of biomass potential for each of the specified potential biomass fuel sources is presented in following sub chapters. Page 12 of 51

13 5.2. Agro-Biomass: Harvesting Residues Potentials for utilization of harvesting residues from agriculture are determined by production of most important crops in defined supply zones. Furthermore, potentials for mobilization of harvesting residues are determined by land structure and terrain features. Flat terrain and rich soils consisting of chernozem and black swamp land close to the river basins are one of the basic factors determining existing high productivity of agricultural land in Northern part of Vojvodina. Basic data on agricultural land share in defined supply zones is determined in table below. Municipalities Area ha Agicultural land ha Share of agricultural land in total land area % Total arable land area ha Share of arable land in total agricultural land % Senta 29,300 26,743 91% 20,990 78% Kanjiza 40,700 34,560 85% 30,052 87% Ada 22,700 20,072 88% 19,531 97% Coka 32,100 29,046 90% 21,768 75% Novi Knezevac 30,500 26,855 88% 21,085 79% Zone 1 155, ,276 88% 113,425 83% Subotica 100,700 88,427 88% 75,519 85% Backa Topola 59,600 54,670 92% 49,378 90% Mali Idjos 18,100 16,980 94% 15,372 91% Becej 48,700 43,856 90% 40,183 92% Srbobran 28,400 27,476 97% 27, % Novi Becej 60,900 53,538 88% 50,271 94% Kikinda 78,200 70,693 90% 64,876 92% Zone 2 394, ,523 90% 323,076 91% Zone , ,799 89% 436,501 89% T-4: Share of agricultural land in potential supply zones Over 88% of the whole land area in zone 1 or 137,000ha is agricultural land, while another 354,500ha of agricultural land exist in defined zone 2. In total, Senta municipality and other municipalities within 50km radius from Senta have over 490,000ha of agricultural land, which is 89% of total land area of municipalities in questions. In addition, over 113,000ha in zone 1 and 323,000ha in zone 2 are arable land, which is over 83% in zone 1 or 91% in zone 2. In both zones over 430,000ha of agricultural land is arable. Land size structure is presented in chart below. Most of the land 190,000ha or 43% in both zones is owned by landowners who poses over 100ha. Also, around 75,000ha or 17% is owned by landowners who poses over 50ha. Only 15% of the land is owned by farmers who poses less than 10ha. While general trend is in enlargement of large properties and land plots consolidation, it can be expected that land size classes structure will be changed in future leaning to even more land plots owned by large landowners. Most of the land is private, while state owned land is leased to private farmers and companies. All agricultural land in the area is managed by private companies or farmers. Land ownership structure and land size classes, along with terrain features, provide basic precondition for feasible supply organization and cost efficient biomass mobilization. Page 13 of 51

14 Bellow 1ha 1-2ha 2-5ha 5-10ha 10-20ha 20-30ha 30-50ha 50-10ha over 100ha zone 2 zone 1 ha 1% 2% 5% 7% 43% 9% 6% 9% 17% Bellow 1ha 1-2ha 2-5ha 5-10ha 10-20ha 20-30ha 30-50ha 50-10ha over 100ha C-1: Land structure in Senta supply zones Most important crops grown in defined supplied zones are presented in table below. Municipalities Wheat Corn Sunflower Soya Sugar bit Production tons Area ha Production tons Area ha Production tons Area ha Production tons Area ha Production tons Senta 16,407 3,989 35,589 8,270 7,926 3,591 1, ,328 1,746 Kanjiza 14,228 3,518 56,005 12,597 2,775 1, , Ada 11,383 2,611 61,237 11,694 2,639 1,105 1, ,119 2 Coka 13,138 3,088 31,711 7,368 6,023 2,905 1, , Novi Knezevac 22,478 5,127 35,271 8,520 6,812 2, , Zone 1 77,634 18, ,812 48,449 26,175 11,658 4,734 1, ,587 3,429 Subotica 58,799 12, ,714 44,123 18,107 7,226 1, ,642 1,622 Backa Topola 52,375 10, ,390 25,632 13,626 5,059 4,101 1,640 74,612 1,563 Mali Idjos 13,245 2,756 45,527 8,755 3,058 1,311 1, , Becej 39,423 7,943 82,106 13,172 11,133 4,103 16,858 6, ,646 2,711 Srbobran 15,161 2,892 62,229 9,853 1, ,338 11,735 98,646 1,963 Novi Becej 28,563 6,557 84,400 17,961 13,043 6,142 1, ,579 1,076 Kikinda 45,563 9, ,109 26,272 33,967 13,542 3,697 1,479 72,654 1,562 Zone 2 253,130 52, , ,768 93,962 37,784 59,181 23, ,621 11,156 Zone ,763 70,934 1,013, , ,137 49,441 63,916 31, ,208 14,585 T-5: Most important crops Most of the land in both zones is used for crop production, respectively corn. Average production of corn in both zones combined exceeds 1M tons per year. Area ha Page 14 of 51

15 Corn is followed by wheat (over 300,000tons) and sunflower (over 100,000tons). Soya and sugar bit also have significant shares, especially sugar bit, considering its productivity. However, share of soya in zone 1 is not so important. A contrary share of sugar bit in both zone 1 and 2 is important, considering the fact that Senta sugar plant was most productive sugar plant in Serbia and needed a strong raw material base. Over 660,000tons of sugar bit is an annual average production in both supply zones. Rape seed becomes more and more important and expectations from agricultural advisory service is that its share in crop structure will rise. However, due to its low significance right now this crop is not taken into considerations. Average annual quantities of most important harvesting residues in Senta supply zones, are presented in table below. Calculation was based on production level, grain straw ratio according to literature sources and conservative approach in definition of share of residues realistic for mobilization thus supply. Municipalities Share realistic for supply Wheat harvesting residues - straw Grain: straw ratio tons/year Corn harvesting residues- stalk Grain: straw ratio tons/yea r Sunflower harvesting residues straw and heads Grain: straw ratio tons/year Soya harvesting residues - straw Grain: straw ratio tons/year Total harvesting residues tons/year Senta 30% 1:1 4,922 1:1 10,677 1:2 4,756 1: ,624 Kanjiza 30% 1:1 4,268 1:1 16,802 1:2 1,665 1: ,776 Ada 30% 1:1 3,415 1:1 18,371 1:2 1,583 1: ,639 Coka 30% 1:1 3,941 1:1 9,513 1:2 3,614 1: ,266 Novi Knezevac 30% 1:1 6,743 1:1 10,581 1:2 4,087 1: ,486 Zone 1 30% 1:1 23,290 1:1 65,944 1:2 15,705 1: ,791 Subotica 30% 1:1 17,640 1:1 71,014 1:2 10,864 1: ,824 Backa Topola 30% 1:1 15,713 1:1 45,717 1:2 8,176 1: ,343 Mali Idjos 30% 1:1 3,974 1:1 13,658 1:2 1,835 1: ,806 Becej 30% 1:1 11,827 1:1 24,632 1:2 6,680 1:0.6 3,034 46,172 Srbobran 30% 1:1 4,548 1:1 18,669 1: :0.6 5,281 29,115 Novi Becej 30% 1:1 8,569 1:1 25,320 1:2 7,826 1: ,003 Kikinda 30% 1:1 13,669 1:1 39,033 1:2 20,380 1: ,747 Zone 2 30% 1:1 75,939 1:1 238,042 1:2 56,377 1:0.6 10, ,011 Zone % 1:1 99,229 1:1 303,986 1:2 72,082 1:0.6 11, ,801 T-6: Annual quantities of agricultural harvesting residues in Senta supply zones Total amount of harvesting residues, which can be considered as realistically collectable is over 480,000tons in both defined supply zones. In immediate zone defined in a 25km radius around Senta, total amount of harvesting residues of wheat, corn, sunflower and soya is 106,000tons, with dominant share of corn residues and significant shares of what and sunflower. In second zone, defined in 50km radius around Senta, additional 380,000tons of residues of same crops can be considered as realistically collectable. Agroindustry processing residues are not taken into consideration for several reasons. Most important processing of agricultural products in Senta area are sugar production, grain mills and animal food production. All the residues in sugar production sugar beet noodles are processed and pelletized into animal food. In addition, there are no significant experiences worldwide in terms of sugar beet residues combustion, only on ethanol or biogas productions. Grain mills and animal food producers do not have significant amounts of resides which can be used for combustion. On the other hand, sunflower and soya processors already use their residues for energy production inside factories premises Wood Biomass: Harvesting and Wood Industry Residues Wood biomass potentials are determined by forest rea features and wood production. However, this region of Serbia has the lowest forest share in total area, from below 1% to 4% depending of the municipality in questions. Page 15 of 51

16 Only productive forests are in fact poplar plantations located on the banks of the river Tisza aimed for wood production. Also, there are combined conifer and hardwood plantations on sand soils or wood buffers on agricultural land aimed in erosion prevention. There are almost no natural forests. Almost all of the forests are state owned and managed by Public Enterprise Vojvodinasume, while there is a small portion on natural or planted willow and poplar forests in flooding zones on the river banks, managed by Public Company Vode Vojvodine. Table below presents detailed data about forest area and wood production. Total forest area in both defined zones is 7,000ha or 1% of the total land area. Annual average wood production is around 30,000cbm and most of the production is in municipalities Novi Becej, Kanjiza, Subotica and Becej. Municipality Forest area ha Forest cover share % Average wood production cbm/year Forest resides cbm/year Forest residues Tons/year at 35% wc Senta 96 0% Kanjiza 1,024 3% 6, Ada 229 1% 1, Coka 430 1% Novi Knezevac 813 3% 1, Zone 1 2,592 2% 10, Subotica 3,728 4% 7, Backa Topola 33 0% Mali Idjos 4 0% Becej 377 1% 4, Srbobran 1 0% Novi Becej 598 1% 9, Kikinda 0 0% Zone 2 4,741 1% 21,579 1, Zone 1+2 7,333 1% 32,192 1, T-7: Forest area, wood production and annual quantities of wood harvesting residues Conservative calculation of forest residues quantities based on 5% of total harvested wood as collectable forest residues, resulted in below 1,000tons of forest residues at 35% water content per year in both defined supply zones. In addition, some parts of these residues are already collected by local population as low quality firewood. Considering very low quantities on rather large area, mobilization which requires organization of supply chain and involvement of different machinery cannot be considered as feasible nor recommended. Another possible source of harvesting residues are communal wood residues deriving from management of parks within town of Senta. However, in the interviews with Senta municipality representatives it is determined that this resource in fact do not really exist. There is one larger park in Senta, with old trees, but trees are not harvested and branches are not cut regularly, therefore one side there are no data which can be used for calculation potential, and on the other side this potential cannot be higher than few tons of wood per year. Considering scarcity of wood in the area, wood industry is not developed. In defined supply zones, there are only several identified wood processors: Viza Prom Kanjiza, Peres Wood Industry Hajdukovo and some smaller fruit crates producers in the vicinity of Kanjiza. All wood processors process poplar wood, producing fruit crates, wooden packaging or boards. While Peres Wood Industry reduced significantly its activities, due to the issues with poplar logs supply, Viza Prom Kanjiza is annually processing above 10,000cbm of wood into packaging, boards and plywood. The company already utilizes its residues for heat energy production inside the factory or sells the residues as firewood. Page 16 of 51

17 6. Biomass demand for two types of biomass plants Biomass demand is analyzed in two scenarios: development of Combined Heat and Power Plant (CHP), producing electricity and selling it to electrical grid as a privileged electricity producer from renewable energy, and also producing heat energy to be delivered to the City District heating system; and development of Heat only boiler producing only heat energy. Considering that abundance of agricultural harvesting residues and scarcity of wood based biomass, and also the fact that major residues from processing of agricultural products are already utilized, combustion of agricultural harvesting residues will be a subject of further analysis in this Study. Two basic scenarios will determine biomass demand which is directly affecting feasibility of the project including fuel choice and contracting possibilities and logistic concept including mobilization and storage capacities Combined Heat and Power Plant Different types of technologies can be used for electricity production out of biomass. Biomass can be combusted and heat energy transferred into electricity in steam or oil turbines, or biomass can be gasified and heat energy can be transferred into electricity in gas turbines. There are different types of combustion methods from cigarette burning to fluidized bed. Also, considering that gasification is developed and reliable for wood biomass or agro pellets and not yet developed for bailed straw, in further analysis of biomass demand we have used scenario of developing a CHP based on fluidized bed technology and steam turbines. In addition, this is a conservative approach which considers maximum biomass demand, compared to other technologies. Use of gas boilers to cover peak loads and biomass boilers for based load is recommended in the Supervisory Report on this Study 7. Table below presents CHP capacities and biomass demand, calculated in the Supervisory Report on this Study. Capacity Mwhte 8 MWth Capacity Mwhel 3.89 Mwel Biomass demand 34,440 Tons Biomass demand plus 10% contingency 38,000 Tons T-8: Basic data in case of CHP scenario in Senta Thermal capacity of CHP is calculated at 8MWth, while electricity production capacity is calculated at 3.89MWel. total annual biomass demand is calculated in 34,440tons, when 10% contingency is calculated total required amount of agricultural biomass is 38,000tons per year. Calculated biomass demand in case of agro biomass CHP development in Senta represents 36% of the realistically available harvesting residues from corn, wheat, sunflower and soya in immediate zone of supply in diameter of 25km from Senta, or 8% of realistically available harvesting residues of mentioned crops in diameter of 50km from Senta. This demand can be covered by using 58% of realistically available (30% of theoretically available) corn harvesting residues in 25km diameter from Senta or 13% of realistically available corn harvesting residues in 50km diameter from Senta. It can be concluded that 3.8MWel/8MWth CHP demand can be covered by utilizing harvesting residues of corn alone, or corn and wheat and/or sunflower and/or soya residues only from immediate zone of supply in 25km radius from Senta. In case of necessity, there are significant amounts of residues to be added up from 50km supply radius Heat Only Production Plant Heat only production plant requires development of a heat only boiler. Basic data for heat only production plant scenario, calculated in Supervisory Report on this Study are presented in a table below Wieser, Hermann Supervisory Report on Agro-Biomass Potential and Logistics Study for Supplying DHC Senta and/or CHP Senta. GIZ DKTI Page 17 of 51

18 Capacity Mwhte 8 MWth Biomass demand 6,858 Tons Biomass demand plus 10% contingency 7,500 Tons T-9: Basic data in case of Heat only production scenario in Senta With same consideration as in CHP scenario related to energy value of biomass, maximal demand for 8MW heat only production plant in Senta is 6,858tons per year, when 10% contingency is calculated, total demand in case of HoB is 7,500tons per year. Calculated biomass demand in case of agro biomass Heat only production development in Senta represents 7% of the realistically available harvesting residues from corn, wheat, sunflower and soya in immediate zone of supply in diameter of 25km from Senta, or 2% of realistically available harvesting residues of mentioned crops in diameter of 50km from Senta. This demand can be covered by using 11% of realistically available (30% of theoretically available) corn harvesting residues in 25km diameter from Senta or 2% of realistically available corn harvesting residues in 50km diameter from Senta. Such demand can also be covered by using 32% of realistically available wheat harvesting residues alone in 25km diameter radius from Senta, or 8% of realistically available wheat harvesting residues alone in 50km diameter radius from Senta. In addition, heat only production demand can be covered by utilizing sunflower harvesting residues alone in both supply zones (48% of zone 1 or 10% of zone 2). It can be concluded that 8MW heat only production demand can be covered by utilizing harvesting residues of corn, wheat and sunflower alone or combined together with soya from immediate zone of supply in 25km radius from Senta. Page 18 of 51

19 7. Biomass supply and logistics Financial analysis presents overview of envisaged investment and operational costs and incomes along with calculation of basic financial indicators for cluster supply Biomass market situation in Senta supply area Agro biomass market in Vojvodina is in development. Still harvesting residues, especially corn stalk is underutilized. Main demand drivers derive from: compost producers, chicken and cattle farmers, agro pellet and briquette factories and farmers and companies producing energy from harvesting residues. Compost producers and chicken and cattle farms use wheat straw, while pellet factories prefer soya straw, but also use wheat and occasionally corn straw as well. Demand from compost producers and chicken farms is constant, while cattle farms demand can be expected to decrease due to general decrease of milk and meat production affected by current market situation. Both straw pellet and briquette production is in decrease, due to the general pellet market crisis and inability to export and slow development of domestic pellet market. Nevertheless, there is only one agro pellet producer in vicinity of Senta company EMS Pellet, with annual production capacity of 8,000tons of pellet. Total annual demand for wheat, soya and corn straw is around 10,000tons. Other closest agro pellet producers are in Zrenjanin (Victoria Starch) or Zabalj (TMD). Affected by market crisis, the largest agro pellet factory in Serbia BPI Doroslovo, have bankrupted in the beginning of this year. There is a number of small scale farmers or residents who produce heat energy by combusting different types of harvesting residues. Also there are some companies producing energy for their own production process. Those companies are also using soya, wheat and occasionally corn straw. The largest company using harvesting residues mostly soya straw harvesting and processing residues is Soya Protein in Becej, which combusts around 15,000tons of agro biomass per year. Table below presents straw prices on different parities in Serbia. Product-parity Price Straw on field EUR/ha Straw on field EUR/ton 6-8 Straw loaded on truck EUR/ton Straw transported to sellers storage up to 50km EUR/ton Straw transported to sellers storage over 100km EUR/ton 50 T-10: Straw prices in Vojvodina Straw suppliers are usually buying straw on field from agricultural companies or farmers. Straw price is usually determined based on the area ranging from 14 to 28 EUR per hectare. Price depends very much on the straw yield, and having in mind usual straw yield of around 3-4 tons per hectare price of straw on field ranges from 6 to 8 EUR per ton. Some agricultural companies are selling straw on field per ton with same price range of around 6 to 8 EUR per ton. After mobilization of harvesting residues, straw suppliers are finally selling the straw at the price range of 38 to 42 EUR per ton, delivered to a buyers destination in 50km range from straw mobilization point. Some suppliers are also selling straw at 25 to 29 EUR per ton loaded into a buyers truck. There are examples of occasional straw delivery to the buyers located over 150 km away from straw mobilization point, at the price of 50 EUR per ton. The water content of the delivered straw ranges from 12 to 18%. Page 19 of 51

20 It is important to note that wheat and soya straw are usually utilized, while corn straw is utilized and traded only seldom. Some sources 8 suggest that corn straw price for big bales, when all mobilization costs are calculated, should range between 30-35EUR per ton at 25% water content loaded into a transport vehicle or between 43-47EUR per ton delivered to a buyers location. Considering abundance of corn harvesting residues and also low transport distances of up to 35km for supply of wheat and sunflower straw, for further calculation we will use the average price of 40EUR per ton, delivered to a buyers location Identification of potential supplies There are several specialized companies and farmers (presented in table below) oriented in harvesting residues collection, baling and supplying straw buyers. Those companies and farmers were interviewed for the purpose of this or previous elaborated by the consultant. Those companies are fully equipped with all straw gathering, baling, manipulation and transport capacities. Their realized annual production varies from 2,000 to over 10,000 tons of straw per year. Some of those companies also have land which they use as straw open storages. Most of the straw supplying companies are active in Northern Backa, Western Backa, Southern Backa, Nothern Banat and Central Banat counties. Straw supplier Victoria logistics Betacorn doo Biomove doo Mediland doo Vasa Poljanski Sreckov Dragan Bun Petar T-11: Straw suppliers in Vojvodina Location Novi Sad Sombor Novi Sad Sombor Vrsac Novi Sad Ada Major crop producers in Senta, Kanjiza, Ada, Coka and Novi Knezevac are medium and large scale individual farmers. Most prominent farmers in Senta municipality are members of Senta Farmers Association Gazdakor. There are no significant cooperatives in the region except in Becej (OZZ Becej and ZZ Tisza). Most significant agricultural companies in 25km radius of Senta are: Poljoprivreda Senta, owned by Meat Industry Matijevic, operating 540ha of owned land and additional 2,400ha of state owned land; Ribar doo, Novi Knezevac, owned by Meat Industry Matijevic operating 530ha of fisheries and land for crop production; and Poljoprivreda Novo Selo AD, Orom, owning over 1,000ha used for crop production. In 50km radius of supply, there are plenty large scale agricultural companies owning and processing from 1,000-5,000ha of agricultural land including: Ravnica - Bajmok, Galad - Kikinda, Jedinstvo Kikinda, owned by Meat Industry Matijevic; Topola, Kikinda, owned by Delta Agrar; Vojvodina-Novo Milosevo, owned by MK Group; PIK Moravica-Backa Topola; Panonija and Pobeda Backa Topola, owned by IM Topola; Doza Derdj Backa Topola and others. Most of the mentioned companies produce crops, while several operate pig or cow farms. Nevertheless, none of them have processing of agricultural products which requires significant amounts of energy that can be produced out of biomass. Therefore, their propensity for straw supply or straw sale can be expected, depending on the prices. 8 Faculty of technical Sciences. Martinov, M., Viskovic, Djatkov, Dj, Golub, M., Krstic, J. Study on Collecting, Storing and Processing of Corn Stalk as Energy Source and Biofuel Raw Material in Vojvodina. Provincial Secretary for Energy and Mineral Resources of Vojvodina. Page 20 of 51

21 Pictures below present straw baling operations organized by Poljoprivreda, Senta in July Photos by Foragrobio cc doo 2016 GIZ DKTI F-4: Straw bales Photos by Foragrobio cc doo 2016 GIZ DKTI F-5: Gathered straw prepared for baling Page 21 of 51

22 Photos by Foragrobio cc doo 2016 GIZ DKTI F-6: Straw baler in operation Photos by Foragrobio cc doo 2016 GIZ DKTI F-7: Straw bales 7.3. Technical requirements and machinery for sustainable biomass supply Agro biomass mobilization consists of following phases: - Crop harvesting; - Straw gathering and baling; - bale loading and transport. Page 22 of 51

23 Following machinery is used in agro biomass mobilization: Harvesters for harvesting crops; Straw collectors for straw gathering and balers for bailing; Self-loading trailers or telescopic handlers for loading and manipulations; Tractors or trucks with adequate trailers for transport. One of the basic principles in harvesting residues mobilization is to perform baling right after the harvesting if water content level of residues is below 20%. Baling of residues with higher water content depending on storage conditions can increase microbes activities and chemical oxidation inside plant tissue and lead to increase of temperature leading to possible self-ignition of bales. Therefore, if water content of residues is higher than 20%, baling should be performed after drying period on the field. In case of corn harvesting residues, water content significantly varies depending on weather conditions in September and October. Figure bellow shows logistic concept of agro biomass mobilization. F-4: Agro-biomass logistic concept In order to increase efficiency of balers, straw gathering is performed with mechanical gatherers. After gathering, harvesting residues are baled into square bales, which depending on balers, can weight from 450 to 550 kg. Usual dimensions of large square bales are 1.2 m x 1 m x 2.4 m with density of kg/m 3. Loading and first phase of transport of the bales from the field can be performed with self-loading trailers or telescopic handlers. Self-loading trailers load and group bales and carry them to temporary storage which is in the vicinity of the field on the road accessible by trucks. Finally, straw bales are transported by tractors or trucks with adequate trailers for bale transport. All activities in biomass mobilization and storage should be in line with fire protection regulations and special attention should be paid to Regulation on specific measures of fire protection in agriculture 9 which specifies adequate preparation of machinery involved in biomass mobilization activities. Pictures below present different phases of agro biomass mobilization. 9 Regulation on Specific Measures on Fire Protection in Agriculture, Official Gazette of The Republic of Serbia No.27/84. Page 23 of 51

24 Photo by H. Wieser 2016 GIZ DKTI F-8: Straw gathering Photo by H. Wieser 2016 GIZ DKTI F-9: Balling of Corn Stalk Page 24 of 51

25 Photo by H. Wieser 2016 GIZ DKTI F-10: Corn Stalk bale F-11: Self-loading bale trailer Page 25 of 51

26 F-12: Telehandler manipulating with straw bales F-13: Telehandler unloading the straw cargo Basic goal of following analysis is to determine necessary capacities for mobilization of required quantities of biomass. Also this analysis will elaborate data on machinery procurement costs. Page 26 of 51

27 Capacity requirements for baling and transport of harvest residues are assessed depending on quantities of biomass to be mobilized for CHP production or heat only production. Determined biomass demand for CHP is 38,000tons per year, while determined biomass demand for heat only production is 7,500tons per year. Harvest periods for sunflower, soya and corn are not overlapping but go one after another. On the other hand, harvesting period for wheat comes one month earlier. This mean that biomass mobilization period can start in July after wheat harvest and finish in October, after corn harvest. Structure and quantity of harvesting residues along with land area needed for collection is presented in table below. Share of different harvesting residues is defined based on their availability in 25km supply radius from Senta and considering that wheat and soy straw already have the market. High pressurized baler for square bales, can produce bales weighting from kg. For basic calculation it is adopted that average bale weight will be 500kg. Gathering, baling and bale transport should be realized in short period of time, depending on time of harvest. Speed of the process is affected by time conditions, since they affect water content of straw. Harvesting residues should be baled if straw water content is below 20%, and in favorable weather conditions water content can be below 15%. If water content of straw is low, baling should be performed right after harvest, a contrary some time is required for straw drying. For straw collecting machinery HP tractors can be used, while for balers tractors have to be stronger than 220HP. Choice of machinery should be optimized based on distance of bale transport. High pressurized balers (CASE, Massey Ferguson, New Holland, John Deer etc.) in optimal working regime when straw is collected can bale 25tons of straw per hour or 60bales. Option/Crop Wheat Sunflower Soya Corn Total CHP tons 9,500 5, ,040 38,000 Heat only tons 1,875 1, ,750 7,500 Share of diffent types of harvesting residues Option/Crop Wheat Sunflower Soya Corn Total CHP 25% 15% 2% 58% 100% Heat only 25% 20% 5% 50% 100% Option/Crop Wheat Sunflower Soya Corn Total Mobilization time July August August - September September Sept. - October July October Residues yield t/ha Needed crop area Option/Crop Wheat Sunflower Soya Corn Total CHP ha 3,167 1, ,510 11,083 Heat only ha ,313 Needed number of bales - minimum weight 400kg Option/Crop Wheat Sunflower Soya Corn Total CHP 19,000 11,400 1,520 44,080 76,000 Heat only 3,750 3, ,500 15,000 T-12: Basic straw supply calculation On 10hour working day such baler can bale 250tons of straw or 500bales from 100ha. Number of days for straw collecting, baling and bale transport should be around 20-30days per year in periods depending on available harvesting residues. Optimal number of balers for CHP option to be engaged is 5, while for HoB option is 1. With increase of biomass demand, number of required tractors and operational machinery also increases. Page 27 of 51

28 Option Tons/year Bales/year Ha/year Number of balers CHP 38,000 76,000 11, Number of days HoB 7,500 15,000 2, T-13: Number of bailers Since dynamics of straw collecting is highly dependent on organization and machinery choice, if productive machinery is utilized or additional machinery is included, number of balers can be adapted correspondingly. If 6meter header harvesters are utilized in harvesting of all crops, distance form lines will be 6meter. In order to provide optimal conditions for baler (in average yield of 3-4tons per ha, excluding soya) it is necessary to collect straw with straw collectors. Number of straw collectors should be equal to number of balers. Tractors working in bale collecting with self-loading trailers should be utilized for straw gathering as well. Depending on the yield of straw and harvesting method, on one hectare it is possible to produce 5 to 15 bales weighing 500kg. Depending on number of bales self-loading trailers can be used for bale delivery to central field loading point, in which telehandlers load it to transport trailers. In case of large number of bales and poor weather conditions, transport trailers can be loaded directly on the field. For manipulation it is necessary to procure 2 telehandlers and 2 self-loading trailers. One telehandler can be used for loading on field and second for unloading. Transport trailers and tractors can be used for bale delivery to CHP or HoB considering the distance, alternatively bales can be transported by trucks. Table below presents market prices of straw mobilization machinery and equipment. Machinery&equipment Market price (EUR) Tractor 220 KS 110, ,000 Baler 90, ,000 Straw collector 40,000-80,000 Tractor for straw collector 140 HP 40,000 80,000 Telehandler 70,000 90,000 Self-loading trailers 40,000 50,000 Tractor for self-loading trailers 140 HP 40,000 80,000 Trucks for bale transport 50, ,000 Trailers for bale transport (for trucks) 15,000 T-14: Straw mobilization machinery and equipment prices Detailed financial calculations are presented in Chapter 10 of the Study Supply chain management (contracting, delivery, quality control) Senta Municipality does not own nor manage agricultural land therefore it cannot be expected that it will participate in supply chain organization. In addition, Municipality do not have experience in heat production and district heating management, therefore it can be expected that future organization of heat production and delivery or combined heat and power production will be in the frame of private public partnership between private investor in production side and the municipality in heat delivery side. In such organizational scheme it can be expected that private partner is responsible for supplying necessary fuels. In this case there are several options: - private partner can organize straw mobilization alone, having contracts of straw takeover on the field and delivering straw to the plant; - or private partner or municipality directly can make contracts for straw delivery on site with existing or new companies specialized for straw mobilization. Both options are feasible depending on the private partner propensity to invest and be involved in the local supply chain. By investing in straw mobilization organization, private partner can secure stabile supply and lower and stable prices. Page 28 of 51

29 Also, private partner will be in position to manage the quality of straw by being involved in whole supply chain. On the other hand, apart from investment in the machinery and equipment, such organization requires investments in straw storage space as well. In such organization private partner can secure straw takeover on field with annual or long term contracts. Starting price of straw on field should be calculated at the rate of 12-24EUR/ha or 6-8EUR per ton. In case of contracting supply in terms of straw delivery at the heat only/chp site with existing or new companies specialized for straw mobilization, the risk of price escalation can emerge. On the other hand, private partner does not need to invest in machinery and equipment and extend his activities out of the core business. Starting price of straw delivered to CHP/heat only site should be calculated at rate of 38-42EUR/ton for 15-20% water content for straw in big bales (1 x 1.2 x 2.4 meters). Straw delivery can be contracted annually or long term. Nevertheless, usual request of financial institutions for investment loans in biomass energy production process is to have a long term biomass supply contract, covering at least the period of contracted energy sale (10-12years). In case of long term contracting of straw, following formula can be used for price change determination. PVn = PVn-1 x In In = IS x 25% + IC x 25% + IT x 25% + IB x 25% PVn = New Price (RSD or EUR/ton) PVn-1 = Old Price (RSD or EUR/ton) In = Price change index IS = Salary index IC = Fuel price index IT = Transport cost index IB = Fertilizaer cost index Contracted quantities need to be guaranteed, meaning that contract should be backed by sellers provision of bank guaranty or a bill. Value of bank guaranty or a bill should be at least 10% of contracted wood chips quantities. Failure to fulfil delivery of contracted quantities needs to be subjected to penalties. Formula below can be suggested for calculation of penalties for non-delivery of contracted quantities: P = (Pfoss Pwc)x Q P = Penalty Pfoss = Unit price of fossil fuel counterpart Pwc = Unit price of straw Q = quantities of contracted yet undelivered straw. Safeguard mechanism should also be installed for sellers in order to secure timely payment from the buyer. Buyer should provide a bank guaranty or a bill for at least of 10% of contracted quantities. Buyer also needs to be subjected to penalties in case of not taking over contracted quantities. Formula below can be suggested for calculation of buyers penalties for not taking over contracted quantities: P = 0.5 x (Qcon-Qdel) P=Penalty Qcon=contracted quantities Qdel= actually delivered quantities Delivery schedule, based on contracted quantities, should be determined based on buyers storage capacities, and possibility of sellers to accept the obligation of storing the straw and organizing just in time delivery, or delivery on monthly basis. This needs to be indicated in the contract. Penalties can be linked with failure to fulfil monthly supply according to the contract. Except penalties, contract cancelation with supplier can also be included if significantly fails to deliver contracted quantities for two months in a row. Page 29 of 51

30 Quality of straw to be combusted depends significantly of technical features of installed boilers. Measurement procedures and quality control should be determined by the contract, along with units used for straw measurement. We suggest utilization of tons as a unit for straw measurement. Application of this unit does requires an investment on truck scales needed for weight measurement, Control of water content can be efficiently organized with application of probe based water content portable measuring devices 10. Every shipment of straw can be controlled by probe insertion to a straw bale at every corner of the trailer used for transport. Average of measured water content values should be determined and used for price evaluation. Additional quality control should include ash content and presence of dirt or foreign particles inside straw bales. For non-compliance with contracted quality reclamations and reduction in terms of straw volumes to be paid should be applied. As mentioned contracted price of straw should be indicated in EUR or RSD per ton at 15-20% water content, therefore price should be linked to an average water content of every straw bales shipment. For reduction or increase of price we suggest method presented in a table below. Water content % Corection factor Below T-15: Straw price correction factors Correction factors should be applied on contracted price to determine actual price of straw for every individual shipment and also to motivate suppliers to supply dryer straw with higher energy content Page 30 of 51

31 8. Biomass storage, preparation and take-in systems and ash disposal After mobilization, biomass needs to be stored and prepared for combustion. After the combustion ash needs to be removed and disposed Biomass storage Main challenge is in the fact that harvesting residues are collected in short period of the year and need to be stored until consumed this means that one or several storages need to have enough space to provide storing of annual biomass demand. Thus storing agricultural biomass straw in bales requires plenty of space. Table below presents biomass mobilization and storage period for soya, wheat and corn harvesting residues. Moth/ Biomass Wheat Corn Soya Sunflower Storage Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec T-16: Period of straw collection and storing Delivery time with quantities and time of consumption is presented in the table below in case of CHP and HoB. Month/info Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Combined Heat and Power Production Straw supply tons Consumption tons Tractor/tractor loads per day Number of trucks/tractors ,500 3,500 11,000 15, ,000 3,167 3,167 3,167 3,167 3,167 3,167 3,167 3,167 3,167 3,167 3,167 3,167 38, ,100 1, , Heat only Production Month/info Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Straw supply tons ,000 1,000 2,000 2, ,500 Consumption tons 1,250 1,250 1, ,250 1,250 7,500 Tractor/tractor loads per day Number of trucks/tractors T-17: Quantities and timing of straw delivery and consumption According to calculated delivery timing and consumption, maximum storage space is required in October when 25,500tons of straw should be stored determining maximal storage capacities for CHP or 7,000tons of straw in case of HoB. Rule Book on Special Fire Prevention Measures in Agriculture defines that straw can be kept in open field storage at least 100 meters away from electrical lines, power stations, other storages, flammable materials, objects with open fire and similar objects with increased risk of fire. Straw should be stacked in maximum 20 x 6meter piles, with 20meter distance in between or 50x8 meters piles with 50meter distance in between. Page 31 of 51

32 Photo by H. Wieser 2016 GIZ DKTI F-14: Open field straw storages Maximum height of pile is 8meter. In case of 50x8meters piles, one pile can consist of 1,100bales storing total quantity of 550tons of straw. In order to store required amount of straw for CHP in such organization 47piles would be needed, and considering regulations in terms of distances in between piles, it would take around 34ha of land to store everything in one place. In case of 20x6meters pile for CHP it would need 23ha, to store 153piles. In case of HoB, using the same calculation principles 10ha would be needed in 50x8meter piles organization or 9ha in case of 20x6meter piles. There is one possible location in Senta industrial zone, which can be used for CHP or HoB development and construction (F-15, F-16, F-17, F-18). It is in proximity of the Senta port on Tisza river and connections to the district heating network. Currently there is a consolidated land consisting of several plots owned by the Municipality in industrial zone. Total area of this plots is around 15ha. The sale price of this land is 7EUR per m 2, however using this land for biomass storage may not be cost efficient. Additionally, next to the land for sale, there is a 6.5ha plot, owned by Windvision, a company who started with biomass based CHP development four years ago, but haven t continued with this activities, therefore this plots may also be available. One way to organize a cost effective storing of such quantities of biomass is on fields on edges of agricultural land or on lower quality agricultural land which is owned or used by straw suppliers. There are some alternative land plots, owned by the state, which can be used for such purposes. One location is one km south of the industrial zone. This land was formerly used for hemp processing factory, but now is managed by PE Vode Vojvodine and it is not utilized. Area of this land is around 15ha. Second potential location is low quality state agricultural land. Municipality which organized public bids for lease of state owned land, have the issue of leasing this plot, since it can be only used as pasture. Approximate area is also around 15ha. CHP or DH operator, can consider options of leasing mentioned plots for biomass storing purposes under conditions and prices much more favourable than prices of land in the industrial zone. Storing of straw inside CHP or HoB facilities, should be organized only for quantities needed for two weeks consumption in winter time. This can be organized in closed or open storages. Page 32 of 51

33 F-15: Potential locations for CHP or HoB and storage space Map data 2016 Google In case of open storage according to Rule Book on Special Fire Prevention Measures in Agriculture, in order to store 1,000tons of straw, needed for 2weeks consumption in peak month for both CHP or HoB it would take 2.16ha to 2.64ha, depending on piles dimension. In order to organize storing most efficiently, a closed storage plan, equipped with fired prevention equipment should be designed and approved by the Ministry of interior affairs Fire Department. Page 33 of 51

34 Photos by Foragrobio cc doo 2016 GIZ DKTI F-16: Available land in Senta industrial zone Photos by Foragrobio cc doo 2016 GIZ DKTI F-17: Road and available land in Senta industrial zone Page 34 of 51

35 Photos by Foragrobio cc doo 2016 GIZ DKTI F-18: Main Electric station in Senta industrial zone Photos by Foragrobio cc doo 2016 GIZ DKTI F-19: Connection point to DH system inside Sugar Plant Page 35 of 51

36 8.2. Straw handling and preparation for combustion Fuel handling of the straw bales can be carried out using an automatic crane system operating inside the fuel storage (crane span= 12m and crane run way= 42m). The crane provides automatic feeding of bales to the bale conveyor. Unloading of the trucks arriving with the bales is done manually by an operator using a forklift truck to position the bales inside the storage. Humidity control of the bales arriving is also done manually by the same operator working in the fuel storage area. This system has been used successfully in district heating plants in Denmark. F-20: Straw divider, push feeder and combustion grate manufactured by WEISS A/S Denmark The straw bales are transported from the fuel storage to the boiler area by means of a single bale conveyor to the straw fuel feeding system located near the boiler. The straw fuel feeding system provides continuous feeding by means of shredding the straw and feeding it into the boiler through a cooled chute. The feeding line consists of a string remover, a straw shredder, a rotary gate valve for preventing back fire and a cooled screw feeder. The straw-divider loosens the press layers without actually cutting but by an efficient loosening and dividing of the straw. This ensures an even and continuous feeding of the boiler in which way a constant combustion with the optimum efficiency is obtained. The straw divider includes string cutter. The straw bale string cutter provides a maintenance-free operation and does not require manpower. The push feeder is used for transporting the loose straw from the straw divider and feeding it into the combustion grate. The combustion of the straw takes place on a moving grate which has four combustion zones with admission of primary air, and the combustion chamber is designed to achieve the most efficient combustion possible. The moving grate is prepared for installation of a mechanical ash removal system. The figure below shows the straw combustion flow in a straw boiler plants using proven technology. The main components of the straw biomass plant that need to be adapted for a specific project consist of: Automatic crane-operated straw storage Straw divider Straw in-pusher Moving grate Page 36 of 51

37 Boiler Primary and secondary air fans Ash redler for bottom ash transport to ash containers Bag filter system Flue gas system with sound damper and stack F-21: Straw combustion flow 8.3. Ash handling The bottom ash from the combustion grate is falling into a wet ash conveyor system. The ash from the bag filter is collected under the filter and transported in a screw conveyor to the bottom ash system, where the two ash fractions are mixed. Finally, the mixed ashes go into a container and can be directly taken over by the farmers for re-distribution on the field or can be interims stored in a storage building. Photo by H. Wieser 2016 GIZ DKTI F-22: Ash storage; example picture from Denmark Page 37 of 51