Bio-SNG - CNG Services

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Net cost of Bio-SNG after assumed RHI (£/MWh)BIO-SNG FEASIBILITY STUDY – ESTABLISHMENT OF A REGIONAL PROJECT6.3.2 Impact of capital Cost, Opex, Fuel price, RHI and heat sales40.035.0SRFSenstivity Analysis for large facilityWoodchip30.025.020.015.010.05.00.0Figure 6.8Base Capex +30% Opex +30% Fuel +£1.5/GJ Fuel -£1.5/GJ RHI £50Sensitivity analysis for large scale facility fuelled by SRF and woodchip.Capital cost: As shown in Figure 6.8, an increase in capital cost of 30% would be significant for bothfacilities, although as a proportion of the base case Bio-SNG price has a proportionately higher impact forSRF. However, an SRF facility might still provide an acceptable outturn bio-SNG cost, whereas awoodchip fuelled facility would not be feasible at the gas prices considered.Operational cost: this is a less sensitive variable than capital cost, but clearly must be managed.Fuel: For woodchip, +/-£1.5/GJ represents a fluctuation of +/-£19/te or +/-30% around a base case of£65/te. This variation has a significant impact on the outturn Bio-SNG cost. An increase of this levelwould provide a Bio-SNG cost significantly beyond the gas prices considered . For SRF +/-£1.5/GJrepresents a more significant fluctuation of +/-£27/te or +/-100% around a base case gatefee of -£27/te.Whilst this is a sensitive variable, the bio-SNG cost could be viable even in the stress case.RHI: The RHI is a very sensitive variable. Increasing this to £50/MWh would enable projects based onboth feedstock types to attain a competitive outturn Bio-SNG cost on the assumption set indicated, andshould provide sufficient project returns to attract investment for an SRF or SRF-Biomass blend facility.56
BIO-SNG FEASIBILITY STUDY – ESTABLISHMENT OF A REGIONAL PROJECTImpact of heat sales. The sale of heat can provide a cost reduction for the Bio-SNG. Depending on thelevel of RHI assumed for the heat offtake) £16-25/MWth), the biogenic content of the feedstock and thedisplaced heat cost (assumed here to be £20/MWh), for the large scale facility, the impact on thelevelised cost of heat sales range between £0.16-0.23/MWth of Bio-SNG for each MWth of heatdelivered. The recoverable heat potentially available from the large scale facility could be significant,depending on the grade of heat required, but in the case of low grade could be over 50MWth, so thelimiting factor is more likely to be the offtake requirement. For an offtake of 10MWth, this indicates thebio-SNG cost could be reduced by ~£2/MWth.6.3.3 Comparison with an SRF fuelled electricity projectBy way of comparison, an analysis has been drawn up for a small, 50MWth project configured to produceelectricity via gas engines, with an SRF feedstock.For this case, the estimated net output is 13MWe corresponding to a net conversion efficiency of 26%.The capital cost can be reduced as there is no requirement for the water gas shift, the gas processingdoes not need to be undertaken to the same level of contaminant removal and there is a small saving forgenerators compared with the assumed cost for methanation. The total capital cost is assumed to be£70Million. The same operational costs are assumed. The availability is assumed to be somewhat higherat 7600hrs. The build time is assumed to be 24months due to the simpler gas processing and packagedgenerators which allow for offsite production line manufacture, compressing the build out time.Using DECCs 2010 figures for wholesale electricity, consistent with the wholesale gas price of 59p/thermassumed for the Bio-SNG analysis, (£60/MWh) and 2 ROCS (£50/ROC) and 60% biogenic fraction, thepre-tax project return, assuming no leverage is 10% (real). Without carrying the additional costsassociated with pressurised, oxygen blown gasification (not required for reciprocating engine powergeneration only) this return could be further increased. By comparison the Bio-SNG project gives aproject return of
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