Site Assessment and Pre-feasibility Study for a biomass-based plant of at least 3MWe in Dominican Republic

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1 TERMS OF REFERENCE STIMULATING INDUSTRIAL COMPETITIVENESS THROUGH BIOMASS-BASED, GRID- CONNECTED ELECTRICITY Site Assessment and Pre-feasibility Study for a biomass-based plant of at least 3MWe in Dominican Republic 1 BACKGROUND INFORMATION The energy sector in the Dominican Republic relies heavily on fossil fuels and is characterized by high energy costs for industrial end-users. Rising oil prices and increased energy demand have led to steady price increases, which are rendering industrial free zones (IFZs) less competitive. These IFZs are now actively looking into opportunities for energy self-supply based on investing in small power plants primarily for electricity generation. In light of this, the United Nations Industrial Development Organization (UNIDO), a specialized Agency of the United Nations, is implementing the project Stimulating industrial competitiveness through biomass-based, grid-connected electricity generation, endorsed in December 2013 by the Global Environment Facility (GEF) under its Climate Change Focal Area. The overall objective of the project is to promote the implementation of decentralized, biomass-based energy production in industrial free zones in the Dominican Republic with the aim of reducing GHG emissions, while contributing to their competitiveness. The project has three substantive components: Policy support for decentralized, biomass-based energy generation Demonstration of proven biomass technology for electricity generation Supportive activities for training, promotion and dissemination 2 PROJECT CONTEXT During the Project Preparation Grant (PPG) phase, studies concluded that the most feasible option for a biomass-based plant would be a basic conventional steam cycle (Rankine) system of an envisaged 3 MWe based on acacia mangium, and located next to or within the grounds of the Santiago Industrial Free Zone (also known as Zona Franca Industrial Lic. Victor M. Espaillat Mera ). However, due to an expansion in the Free Zone since those studies were carried out, energy consumption has changed and other new developments (such as the establishment of a briquette factory in the vicinity) have taken place. Therefore, it has been deemed necessary to undertake a new pre-feasibility study that revises the

2 underlying assumptions from the previous study and evaluates optional sites, as well as analyses a modular approach and combination with solar energy. Prior studies in the context of this project include a biomass availability study and a pre-feasibility study, which will be made available for consultation. 3 AIM OF THE CONTRACT The aim of the contract is to provide advisory services in the field of renewable energy generation, specifically biomass-based electricity generation. The Contractor will adequately address the technical, economic and financial, institutional and managerial, environmental, and socio-cultural (specifically gender-relevant) aspects related to the installation and operation of a plant to generate heat and electricity, primarily based on biomass, for the Zona Franca de Santiago in the Dominican Republic. Besides identifying the most adequate technology for the plant, the most appropriate location(s) shall be determined. 3.1 General information for technology selection for the biomass plant Biomass Availability: Type: Previous studies (carried out in 2012) determined the following biomass availability near Santiago de Los Caballeros: Biomass Fresh acacia mangium* Dry rice husks and freshly cut rice stalks Urban organic waste (from Santiago) Tobacco industry waste/by-product Coffee pulp and chaff Wood industry waste Waste from banana plantations Sugarcane bagasse Wood from natural dry forest Wood from forestry plantations High Medium Low Potential The species mentioned are merely indicative. A national biomass availability study of existing data sources is currently underway, which can be used to support the determination of possible sites for the biomass plant. Nevertheless, the Contractor should verify the validity of the data and perform research of their own in order to suggest the best site(s) based on current and validated data. *The selection of biomass must take into account GEF guidance, which states that the introduction or use of potentially invasive, non-indigenous species cannot be supported.

3 Volume: Sufficient biomass to supply the needs of at least a 3 MWe plant (taking into account that this is a pilot project to be replicated). The option for modular up-scaling should also be considered, as well as the combination with solar energy generation. Availability: The supply of the selected biomass should be managed sustainably and must be guaranteed year round. The type of certification must be considered, as well as the possibility of upgrading to comply with international standards Grid Connection On-site generation for self-consumption should be considered when evaluating the site within the free zone grounds and grid interconnection should be assumed for all other site evaluations. For all cases, relevant fees, permits, regulations and the necessary timeframe for the connection process must be taken into account Waste management Generated emissions, ashes, byproducts, water treatment (cooling) and other waste disposals must be taken into account considering all relevant (national and international) regulations and standards Other considerations Besides the harnessing of heat generation from biomass, the possibility of tri-generation (based on the assessed need for cooling) must be evaluated when analyzing on-site generation. Furthermore, the combination of a biomass-powered plant with solar energy is to be considered. For this reason, at least the following two, overall scenarios for energy generation must be considered: 1) Biomass plant 2) Biomass and solar hybrid plant 3.2 Information for site selection for the biomass plant: Location Three proposed sites must be assessed: 1. On-Site: Within the boundaries of the free zone, evaluating the use of residual heat for cooling and industrial processes. 2. Km 100: Waste heat utilization from briquette production in Bonao. 3. Nagua: Generation using biomass generated from a coconut plantation. i. The Contractor should suggest at least one additional site based on own research and assessments.

4 Water supply Distance from biomass ii. The Contractor must recommend the best and second best option, based primarily on financial considerations (profitability and return of investment), but also considering other criteria such as environmental and social sustainability, potential for up-scaling, long-term biomass security (availability), water supply, viable transportation infrastructure and future projections. Ensure uninterrupted water supply Within 100 Km of available biomass 3.3 Business model: Different business models and organizational structures must be considered. A framework that guarantees continuous biomass availability must be considered and different investment and association schemes should be analyzed. 4 SCOPE AND ACTIVITIES OF THE PROPOSED CONTRACTED SERVICES The table below outlines the scope of the works to be carried out under this contract: Tasks WORK PLAN. On the basis of the proposed time schedule outlined in the Terms of Reference, the Contractor will prepare a work plan for the study and include this in their offer, and report on the approach taken in the study. The work plan should set out the consultants approach to the following activities: fact finding/data collection/surveys; workshops, consultations and other means of ensuring local participation; identification of possible options for the proposed biomass-based energy plant; analysis of options; a briefing report summarising the analysis of the options; consultation meetings with decision makers to identify the preferred options ( best and second best ); preparation of the draft and final pre-feasibility study report; preparation of the TOR for a full feasibility study. FACT FINDING. DATA COLLECTION AND SURVEYS. Based on information provided by UNIDO and other relevant parties as well as the Contractor s own research, collect and analyze the data (e.g. biomass availability at the pre-selected sites as well as at least one additional site) necessary to carry out the assessment for the most appropriate site location and technology for the proposed plant. WORKSHOPS, CONSULTATION WITH RELEVANT STAKEHOLDERS TO ENSURE FULL PARTICIPATION. Carry out regular meetings with relevant stakeholders to assure that options considered are meeting the requirements of all parties involved. IDENTIFICATION OF POSSIBLE OPTIONS FOR THE PROPOSED PLANT. Based on the previous tasks carried out, identify the most suitable options for the proposed plant, taking into consideration technical, economic and financial, institutional (incl. regulatory) and managerial (incl. potential business models, logistical aspects), environmental, and socio-cultural (specifically gender-relevant) aspects. This range of options to be considered should include the following: - Combustion, gasification and use of waste heat from torrefaction - On-site co- and potentially tri-generation - Off-site generation (sites identified plus at least one additional one) - Modular / hybrid (with solar) approaches ANALYSIS OF DIFFERENT OPTIONS. The various options identified should be analyzed and such analyses should

5 include the technical evaluation of the following (unless previously eliminated with substantiated reasoning as one of the options): - Combustion, gasification and use of waste heat from torrefaction - On-site co- and potentially tri-generation - Off-site generation (sites identified plus at least one additional one) - Modular / hybrid (with solar) approaches BRIEFING REPORT. Report summarizing the previously conducted analyses of the various options is to be prepared. The report should also outline the time, costs and documents required for obtaining the necessary permits for the selected option. CONSULTATION ROUNDS WITH DECISION MAKERS TO IDENTIFY THE PREFERRED OPTION. Elaborate on the best and second best options of all analyzed in close consultation with key stakeholders, taking into consideration their views and possible concerns. PREPARATION OF THE DRAFT AND FINAL PRE-FEASIBILITY STUDY REPORT (IN SPANISH) AND EXECUTIVE SUMMARY (IN SPANISH AND ENGLISH). Full report to be prepared including the following sections: summary, background, analysis, assumptions, implementation, sustainability factors, conclusions and proposals as well as technical and administrative appendices. The report should meet the requirements of financing institutions for an initial assessment. PREPARATION OF TOR FOR THE FOLLOW-UP FEASIBILITY STUDY. Based on the results of the pre-feasibility study, terms of reference for a full feasibility study are to be prepared. PRESENTATION OF ALL FINDINGS. The findings of the pre-feasibility study and site recommendations are to be presented to UNIDO and relevant stakeholders including CNE, CNZFE, CZFIS, the Ministry of Environment and the Ministry of Energy, amongst others. 5 GENERAL TIME SCHEDULE The activities under this contract should be completed within a period of three (3) months from the date of signature of the Contract (foreseen period end-april end-july 2015). 6 PERSONNEL IN THE FIELD (PROFESSIONAL EXPERIENCE AND QUALIFICATIONS) The Contractor is expected to provide the services of a team that should ideally comprise the following competencies: Proven expertise and in-depth knowledge of sustainable energy and climate change policies and practices in the Latin America and the Caribbean context; Knowledge of the electricity industry in the Dominican Republic or the region: technical requirements, necessary permits and procedures for connection. Knowledge of renewable energy, particularly in the field of bio-energy (biomass) and ideally solar energy. Must have knowledge of the biomass market in the Dominican Republic or the region and the characteristics of available biomass. The staff assigned to the project must have previous experience and qualifications with biomass based conversion technologies (gasification, direct combustion) exceeding 7 years and ideally with innovative technologies such as torrefaction and gasification.

6 Track-record of participating in the engineering, execution, operation and/or maintenance aspects of at least 5 similar projects, and experience of biomass based systems of >1 MW. Experience with conducting prefeasibility studies will be important. Must have at least 5 years proven experience in renewable energy projects especially conducting economic and financial analysis and able to work at national, regional and international levels. Ideally 5 years of proven experience in environmental and social matters related to renewable energy generation in developing countries and preferably in the Latin America and the Caribbean region. Team members should hold advanced degrees in their respective areas of expertise (engineering, energy, environmental sciences, energy law, environmental policy, sustainable development, or other relevant fields). The CVS of the respective experts assigned to this project by the Contractor must be provided. 7 LANGUAGE REQUIREMENTS The working language for the purposes of this project is Spanish, thus an excellent command of Spanish is required of the proposed personnel. Alternatively, a Spanish language editor and/or interpreter may be provided as part of the team and at the expense of the Contractor in case that command of the Spanish language of the key experts is not adequate. All delivered documents must be of sufficient enough quality so that no further editing shall be required. The final report (2 paper copies and 1 digital copy) must be submitted in Spanish and an Executive summary in Spanish and English must also be provided. 8 DELIVERABLES AND SCHEDULE 2015 Activities Contracts Signed Work Plan delivered and approved Fact finding/data collection/surveys Workshops, consultations and other means of ensuring local participation Analysis of options

7 Briefing report Consultation meetings with decision makers to identify the preferred options Draft pre-feasibility study report Final pre-feasibility study report Draft TOR for a full feasibility study Final TOR for a full feasibility study Presentation of all deliverables to UNIDO and relevant stakeholders (incl. CNE, CNZFE, CZFIS, Ministry of Environment, Ministry of Energy)