Jamaica Biofuels Report - Ministry of Energy

CogenerationPower production capacity (MW) 7.4Surplus power (MW) 3.1Boiler pressure (bar) 67Bagasse (tonnes) 131,000Power export (MWh/yr) 26,000Days/yr 350Table 1: Pilot Project Cost and Operating CharacteristicsProduct PricesAs indicated earlier, the upgrade could yield an internal rate of return (blended debt andequity) of 16 percent per year, assuming prices and revenues shown in Table 2 (below).“Internal rate of return” in this discussion refers to the financial performance of theincremental investment in ethanol production, and not the profitability of the mill as a whole.Variations in either the ethanol price or the value of sugar that would not be produced willcause significant changes in the predicted IRR. For example, at the current sugar price ofUS$0.37 per lb. (approximately $800 per tonne), ethanol is clearly uneconomical (See Figure 2.)On the other hand, as the graph in Figure 3 illustrates, sugar prices have been well belowUS$0.20 per lb. ($440 per tonne) for almost all of the past 30 years, and recent increases, dueat least in part to weather in India and Australia, may be temporary, as they were in 1980.Product Revenue Price Amount/yrEthanol $0.50/liter $16,875,000Foregone sugar revenue @ 37,000 tonnes/yr $480/tonne $(17,760,000)Foregone molasses revenue @3,700 tonnes/yr $60/tonne $(222,000)Exported electricity $150/MWh $3,900,000Total Net Revenue $2,793,000Table 2: Price and Revenue Assumptions94