VIASPACE Inc. announced that the comprehensive, independent feasibility study conducted by Pelican SA of the 12 MW biomass power plant and co-located 834 hectare (2,060 acre) Giant King® Grass plantation project in Nicaragua has been completed. The feasibility study addresses the technical and economic issues of both the plantation and power plant, including connection to the Nicaraguan power grid.
The six month feasibility study is 147 pages long, plus major appendices. It is now being provided on a confidential basis to bankers and potential investors in the project. Energia Reino Verde (Green Kingdom Energy in English) is the special-purpose company formed to own and operate the Nicaragua power plant and plantation.
Summary and Conclusions of the Feasibility Study
The proposed integrated Energia Reino Verde 12 MW biomass power plant and co-located Giant King Grass (GKG) plantation is both feasible and bankable. In addition to GKG, the power plant will be fueled by rice husk as a secondary fuel and rice straw as a backup fuel.
This conclusion is based on an extensive review of the agriculture plan, fuel logistics, power plant technology, grid interconnection plan, construction costs and operations. Environmental, permitting and legal issues were also examined.
The main conclusions of the feasibility study are:
- Giant King Grass is suitable as the fuel. Rice husk is available at the site as an additional fuel, and rice straw is available at the site and nearby areas as an auxiliary backup fuel.
- The Giant King Grass plantation is very similar to a sugarcane plantation and will utilize best practices from the sugarcane industry.
- The Giant King Grass plantation will be located on the 4,200 hectare Miramontes plantation that is currently growing rice on 2,800 hectares. Irrigation from Lake Nicaragua is available as are plantation and power plant workers in the region.
- A major advantage is that the Giant King Grass plantation and power plant will be co-located and the average distance between the GKG fields and the power plant is 3 km, which considerably simplifies logistics and minimizes need for storage.
- Based on the experience of the sugarcane industry, a semi-mechanized approach to cutting and loading is recommended. In most of the world, these activities are done fully manually and this is certainly feasible in Nicaragua.
- The biomass power plant will be nearly identical to a bagasse co-generation power plant at a sugar mill, except that the boiler will be replaced with a boiler that can handle the proposed fuels that have specific corrosive properties related to chlorine content, and the propensity for slagging due to low melting temperature ash.
- The proposed boiler technology is well proven for corrosive fuel such as straws and grasses.
- The EPC contractor proposed by the Project developers is very experienced and has built many power plants throughout the world.
- The biomass power plant is located 9 km from a grid connection point, which is a reasonable expense for the proposed size of the project.
- Power plant operations are planned to be contracted to an experienced company.
- The costs and financial projections for the ERV project have been validated.
- The renewable low carbon electricity produced will be sold under a Power Purchase Agreement. The plant will produce reliable base electricity and would also be eligible for capacity contracting.
- Permitting activities are underway. The non-objection from the Ministry of the Environment has been issued. A Provisional Generation License request has been submitted to the Ministry of Energy and Mines.
- The project developers have built a strong support team for the project, including Agricorp, which is one of the largest and most respected companies in Nicaragua, with annual revenues exceeding $150 million, IC Power (2nd largest IPP in Nicaragua) and Pro Nicaragua, the government investment promotion agency.
VIASPACE CEO, Dr. Carl Kukkonen, stated, "We are pleased that the Pelican SA feasibility study has formally validated the technical and business case for our Energia Reino Verde power plant integrated with the Giant King® Grass plantation. We believe that we have all of the bases covered and the potential risks have been mitigated.
- we are growing our own Giant King® Grass and not depending on third parties for fuel
- irrigation from Lake Nicaragua will be used during the dry season
- rice husk and rice straw from the 7,000 acre Miramontes rice plantation and mill are available as backup fuel sources.
- AGRICORP, the VIASPACE partner and one of the largest companies in Nicaragua is extremely experienced in agriculture
- the power plant and plantation are co-located for simple and cost effective logistics
- the EPC contractor has worldwide experience
- the boiler technology is well proven
- the power plant operator is very experienced in Nicaragua
- the project rate of return is acceptable for financing
- Nicaraguan partners will be equity investors and have a vested interest in our success"
Kukkonen continued, "The Energia Reino Verde power plant project will produce 84GWh of saleable renewable and low carbon electricity per year for a project life of 25 years. This will be a flagship project and VIASPACE plans to replicate similar projects worldwide."
VIASPACE Chairman, Dr. Kevin Schewe, commented, "VIASPACE Inc. (VSPC) and investors and executives of Agricorp are the project developers and equal shareholders in Energia Reino Verde. Equity investors will also be shareholders. All future profits from Energia Reino Verde will accrue to VIASPACE proportional to VIASPACE's ownership. In addition, VIASPACE will receive Giant King Grass license revenues from Energia Reino Verde as the Giant King Grass is harvested to fuel the power plant during the 25 year project life. This is the preferred business model that VIASPACE seeks to develop with its renewable energy power plant partners."
Dr. Schewe concluded, "The Nicaraguan government policy is to move to 97% renewable energy and low carbon fuels before 2030. This project fits perfectly into their planning strategy as they are looking for reliable base load electricity and projects that can provide regulation and capacity services. Our Nicaraguan and Agricorp partners have shown tremendous leadership, initiative and diligence to move this renewable and carbon-neutral 12 MW power plant project forward and we feel very fortunate to be an integral component of such a strong team."