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Sugar mills can add 3,000mw power to grid
Monday, May 03, 2010
By Jawwad Rizvi
LAHORE
SOURCES in the sugar mill industry have claimed that over 3,000 mega watts of electricity could be produced by sugar mills by using high pressure boiler technology, The News has learnt.
A delegation of sugar mill industry would visit the United States to study power generation from high pressure boilers installed at sugar mills.
Industry sources told The News that sugar mills could produce over 3,000MW electricity by installing high pressure boilers which cost around Rs 1.5 billion per mill. Sugar mill industry was not in a position to make such a huge investment on its own as majority of mills were in the process of retiring existing loans and could not obtain more loans from banks, they said.
A former chairman of the Pakistan Sugar Mills Association (PSMA) claimed that former president Pervez Musharraf was also interested in tapping the power generation potential of sugar mill industry but then finance minister Shaukat Aziz became a hurdle and the project was shelved. He said that Benazir Bhuttos government during its first tenure made power purchase agreement with Ashraf Sugar Mill and Shakarganj Sugar mill (4MW each), and Fatima Sugar Mill (1 MW). At that time these mills had installed low pressure boilers at their mills and started selling extra electricity to the government during the sugarcane crushing season. He said that industry since mid 1990s had repeatedly asked the government to exploit the power generation potential of sugar mill industry.
Currently, Shakarganj Sugar Mills is producing around 7 to 12 MW electricity by using begasse and ethanol, Liyyah Sugar Mills 10 to 12 MW. The JDW was producing around 40 mega watt from high pressure boiler technology it had already installed.
Industry sources have said the PSMA had sought Rs 11 per unit for electricity but the government was offering Rs 9 per unit. They said sugar mills could provide electricity to whole districts.
A sugar miller pointed out that the federal government could install these plants through WAPDA or public private partnership or on Build Operate and Transfer (BOT) basis.
If the government chose to install these plants through the WAPDA, these could be run by begasse during crushing season and later on coal or gas. If the government was interested in pursuing public private partnership option, the government or electricity company could set up power houses and install high pressure boilers. Sugar mills can provide begasse to the electricity company free of cost and it will supply electricity to the mill free. After the crushing season the plant could be operated on gas or coal. This model was successfully working in Australia, where electricity companies get free begasse from sugar mills and in off season the plants were run on woodchip.
Under the BOT option, manufactures of high pressure technology equipment could be invited and asked to install plants and run them for a certain period of time. The plants could later handed over to the mills or any other party.
A veteran sugar miller told The News that the government could make a great breakthrough by arranging technology transfer. He said that the government could enter into joint venture with a manufacturer and Heavy Mechanical Complex Taxila.
He said Dawood Engineering was already working on it and foreign exchange could also be saved if it was transferred to local firms.
He said the government could make a sovereign agreement with the US or other high pressure technology manufacturing countries for import of machinery at zero mark-up rate thereby reducing installation cost. He said government-to-government agreement will reduce the cost of export finance.
Monday, May 03, 2010
By Jawwad Rizvi
LAHORE
SOURCES in the sugar mill industry have claimed that over 3,000 mega watts of electricity could be produced by sugar mills by using high pressure boiler technology, The News has learnt.
A delegation of sugar mill industry would visit the United States to study power generation from high pressure boilers installed at sugar mills.
Industry sources told The News that sugar mills could produce over 3,000MW electricity by installing high pressure boilers which cost around Rs 1.5 billion per mill. Sugar mill industry was not in a position to make such a huge investment on its own as majority of mills were in the process of retiring existing loans and could not obtain more loans from banks, they said.
A former chairman of the Pakistan Sugar Mills Association (PSMA) claimed that former president Pervez Musharraf was also interested in tapping the power generation potential of sugar mill industry but then finance minister Shaukat Aziz became a hurdle and the project was shelved. He said that Benazir Bhuttos government during its first tenure made power purchase agreement with Ashraf Sugar Mill and Shakarganj Sugar mill (4MW each), and Fatima Sugar Mill (1 MW). At that time these mills had installed low pressure boilers at their mills and started selling extra electricity to the government during the sugarcane crushing season. He said that industry since mid 1990s had repeatedly asked the government to exploit the power generation potential of sugar mill industry.
Currently, Shakarganj Sugar Mills is producing around 7 to 12 MW electricity by using begasse and ethanol, Liyyah Sugar Mills 10 to 12 MW. The JDW was producing around 40 mega watt from high pressure boiler technology it had already installed.
Industry sources have said the PSMA had sought Rs 11 per unit for electricity but the government was offering Rs 9 per unit. They said sugar mills could provide electricity to whole districts.
A sugar miller pointed out that the federal government could install these plants through WAPDA or public private partnership or on Build Operate and Transfer (BOT) basis.
If the government chose to install these plants through the WAPDA, these could be run by begasse during crushing season and later on coal or gas. If the government was interested in pursuing public private partnership option, the government or electricity company could set up power houses and install high pressure boilers. Sugar mills can provide begasse to the electricity company free of cost and it will supply electricity to the mill free. After the crushing season the plant could be operated on gas or coal. This model was successfully working in Australia, where electricity companies get free begasse from sugar mills and in off season the plants were run on woodchip.
Under the BOT option, manufactures of high pressure technology equipment could be invited and asked to install plants and run them for a certain period of time. The plants could later handed over to the mills or any other party.
A veteran sugar miller told The News that the government could make a great breakthrough by arranging technology transfer. He said that the government could enter into joint venture with a manufacturer and Heavy Mechanical Complex Taxila.
He said Dawood Engineering was already working on it and foreign exchange could also be saved if it was transferred to local firms.
He said the government could make a sovereign agreement with the US or other high pressure technology manufacturing countries for import of machinery at zero mark-up rate thereby reducing installation cost. He said government-to-government agreement will reduce the cost of export finance.
