Building a Sustainable Biomass Business in Papua New Guinea

Transcription

1 Building a Sustainable Biomass Business in Papua New Guinea Michael Henson Chief Operating Officer Aligned Energy Project Director PNG Biomass IRENA Martinique 22 to 24 June 2015

2 Papua New Guinea Eastern Half of the island of New Guinea 461,690km 2 largest country in the Pacific Region Official population 7.5 million, actual population possibly close to 10 million Middle Income Country with gross national per capita income of USD2,386 Over 850 indigenous languages

3 Papua New Guinea Resource Rich 7% of world s biodiversity 14% of world s tuna stocks Copper, Cobalt, Nickel, Silver, Natural Gas, Petroleum account for 70% export earnings 2.6% of the world s gold production History of strong economic growth (mean annual growth in GDP 5.9% in ten years to 2013) USD60 billion mine and oil revenues between 1975 and 2013 Development Poor Ranked 156 out of 187 on the Human Development Index (HDI) 25% of children unable to attend school 75% population dependent on subsistence agriculture 40% of population living on below USD1.25 per day Maternal mortality 733 out of 100,000 Infant mortality 63 out of 1,000

4 Papua New Guinea Electrical Generation and Infrastructure 7% of population have access to grid electricity 582MW generation capacity (PNG Power 300MW) PNG Power - State Owned Enterprise 3 Grids Port Moresby / Ramu / Gazelle Peninsula 16 Regional Centered (Diesel Generation) Mix of hydro and thermal generation Technology Installed Capacity (MW) Capacity Hydro % Diesel % Gas Fired % Geo Thermal %

5 Ramu Grid

6 Establish a 30MW net (15MW+15MW) biomass power station to energize the Ramu Grid close to Lae Establishment of 18,000ha of dedicated fuel plantations. Provide base load power to the industrial port town of Lae Non subsidized competitively prized power PNG Biomass - Project

7 Project Area

8 PNG Biomass - Partners Incorporated in PNG in It operates PNG s currently producing oil and gas fields and has a 29% interest in the PNG LNG Project. One of Oil Search s core objectives is to leave a positive legacy in all areas in which it operates. Throughout 85 years of operation, Oil Search has maintained a strong commitment to sustainable and ethical business practices. A long term approach to sustainable development and an ability to contribute positively and creatively to the growth and development of communities where they operate. Aligned Energy Limited develops sustainable biomass energy projects by integrating biomass production, water and nutrient management and energy conversion in cost effective and environmentally beneficial way. The company was formed by experienced international energy, biomass and project management personnel to provide competitive renewable energy solutions in carefully targeted regions and with appropriately matched technology and methods of biomass production.

9 PNG Biomass Key Components for Success Market Team Technology Community Sustainability IFC Performance Standards Forest Stewardship Council Round Table of Sustainable Biofules Infrastructure Land Fuel

10 Lae is the most important port and industrial city in PNG Unreliable and insufficient supply of electrical power Many customers forced off grid (>15MW in city) Current generation portfolio diesel and hydro 25 Year PPA, coupled with Implementation Agreement that includes State Backed Guarantee Markets

11 Power Plant design simple and robust (vibrating grate) Working with experienced biomass engineers and manufacturers (EPC/O&M) Focus on fuel handling (fuel yard, chipping, boiler feed in) Power Plant to be Commissioned in 2019 Technology

12 Highlands Highway runs through project plantation area Ramu Grid (132kv) transmission line Erap Switching Station with spare bay, adjacent to proposed IPP site Majority of fuel cost is harvesting and transport Infrastructure

13 IPP to be fueled on woody biomass Initially biomass from rain tree (exotic weed) Later from sustainably managed dedicated biomass plantations 18,000ha of tree plantations to be established Fuel

14 Fuel Eucalyptus pellita and Acacia crassicarpa current preferred species Both species native to PNG and both proven plantation species Managed on a 4 to 8 year rotation Mean productivity estimated to be between 9 and 14 BDMT/ha/annum Oldest trees currently 3 years

15 Wamanga Sanga Pama Yanuf Watz ua ( Block 01) Watz ua ( Block 02) Watz ua ( Block 03) Watz ua ( Block 04) Watz ua ( Block 07) Mayamsariang Nzang a Zumutz Ungaiwa Zufu ng Atsuaf Ragitamu t Zirir MUSUAM NUARINGAN Chiching Bam pun Ngarumuntua Siginbuain YAMUNGYAMUNG GANANGSUMPU Ngarumpur BUARUFMARAN Kilometers Wauf Ngarumuar Agu Zif Zifisang Cattle Ranch Mem pangapes Land Zib Land Clear Water Land Zib Land Clear Water Land GOR Land Mo to Lan d Gor 2 Land Koya Land Ngar o Basab Pisuguarup Ululenan Land Ululenan 2 Ongka Land Ngarumogish Lesonowante Charoseson Land Yasinaron Lan d Ngar oburub Nstupuru ng Land Ngapou r Boasas Yadzu Land Bampu Rom pon Parag Land Dampe Land Ngaroraf Land Orogavi Mempangn aron Block 2 & 3 Furif Land Gotogeran Mo mem Ngarogayan Ganef L and Trukai L and Ag Research Station Image: Mu num F arm Land Targeting flat underutilized grasslands in Markham Valley Soil structure and ph present some minor challenges Mix of communal and state land Currently agreements on 21,200ha of communal land with 105 groups Watarais Markham Valley Land Areas Proposed Power Station Site Transmission Line Highway Roads Drainage Disputed Land Boundary Land with Agreements Nadzab Date: 13/03/2015 Lae Coordinate System: WGS 1984 UTM Zone 55S

16 Project committed to principles of Free Prior Informed Consent (FPIC) Encourage Active Community Participation in Project through: Land Rental / Royalty Direct Employment Business Creation / Land Owner Companies Development Projects Training / Scholarships Community Support

17 Active Community Participation Zoned Land Use Gardens and Food Crops, located closest to communities to maintain cultivation for the basic needs of the communities. (banana, coconut, cash crops) Agroforestry Zone: A shared zone of intercropped biomass plantations and other crops, such as: cassava, peanuts, cacao, melons and essential oil crops (sandalwood and Eucalypts). Firebreaks, inter-row and other areas will be made available for planting. Biomass Plantations: intensively managed biomass plantations: opportunities for honey, firewood, sawlog and veneer logs in addition to biomass for IPP. Plus cropping in fire breaks (peanuts, maize). If plantations are certified with FSC all products harvested from them are also certified (i.e. certified honey) [high value]

18 Independent Economic Analysis Parameter Destination of fuel payments Construction phase benefits to PNG economy Operating phase benefits to PNG economy Landowner and community benefits: Direct payments Including multiplier impacts Local employment boost Power price cost savings for Customers (Over 10 years) compared to diesel / PPL general supply tariff Operations phase employment impacts: Direct National (including multiplier impact) CO 2 mitigation - per year over project life (25 years) Diesel/HFO consumption avoided over project life International Sustainability certification Engagement of marginalised groups Benefit (first 30 MW) Biomass - most fuel costs go into the PNG economy HFO/Diesel - most fuel costs go offshore K 120+ Million K 67 million per year Including health, education, roads, power: K 6 million per year K 24 million per year 850 FTE jobs K 900 million 480 Direct FTE positions created in the Markham 4,750 FTE positions created (mostly in Morobe and Lae) 190,000 tonnes 4,750,000 tonnes 10+ million Barrels Government and Stakeholder Reputation Benefits JV has already engaged women, youth and landowners for employment and participation, and has a high positive media profile Source: Economics Consulting Services

19 Aligned Energy - small multi-disciplinary international team Oil Search s team bring experience in government and community affairs in Papua New Guinea Motivated and experienced local project team Team

20 PNG Biomass is creating an economically, socially and environmentally sustainable renewable energy project in Papua New Guinea. The project is in agreement with PNG Policies on energy self sufficiency and community involvement in energy generation. As well as being aligned with PNG s 2050 Vision and Medium Term Development Plan. Summary

21 Thank you Michael Henson Project Director PNG Biomass For more information: