23 Oct 2012

Eco Power Plant: nature-friendly business model that works

Located amidst the woods in the west of Poland, a wooden pellet manufacturer, Eco Power Plant, is building a new production facility and a cogeneration heat and power unit.

When launched in 2013, wooden and straw pellet, or biofuel mix, manufacturing, otherwise known as a generous emitter of greenhouse gases and dust, will sport new—and unique in Poland—environment-friendly technologies. Putting out some 50,000 tonnes of high-quality pellets a year, the NIB-financed plant will also produce and consume about 14.4 MW/h of green renewable energy.

The innovative manufacturing technology applied in the new plant will allow pellets to be produced from mixed raw material: timber, wood waste and straw.

“The area within a 100-kilometre radius from here guarantees supplies of raw material three times our demand. In practice it means lower costs and a smaller environmental footprint,” says Damian Bernaciak, CEO of Eco Power Plant.

The environmental innovations at the plant will help it keep CO2 emissions 14 tonnes a year lower than if it used traditional manufacturing technologies based on fossil fuels. Dust emissions are four times lower than the maximum defined in national law on environment protection.

Another innovation is Eco Power Plant’s cogeneration heat and power (CHP) unit for raw material drying and powering the production process. The unit will be fuelled with lower quality wood waste.

“To increase the productivity of the unit, we have introduced two circles based on thermoil and silicon oil in addition to the more traditional water-based circle. This increases the efficiency of cogeneration performance to more than 85% of the used fuel,” Mr Bernaciak explains.

The CHP unit’s capacity will allow the production of 1.9 MW/h of electricity and about 10 MW/h of heat. As a result, energy will account for 10% of Eco Power Plant’s costs, compared to 40% which a pellet producer of the same type would bear without the innovation.

The total investment in Eco Power Plant exceeds EUR 17 million. According to Mr Bernaciak, this is double as much as one would invest in a similar pellet mill based on traditional technologies. What makes Eco Power Plant invest so much more?

“Income prospects. The idea of a CHP instead of a more traditional boiler came during the construction phase. The innovative CHP technology and 20% more wood waste as fuel will result in high-efficiency cogeneration,” says Mr Bernaciak.

The current rules award Eco Power Plant with tradable green—for producing renewable energy—and red—for high-efficiency cogeneration—certificates, which may provide additional income for the company.

The capacity of the CHP unit will not be enough to cover the plant’s own demand, 2.5 MW/h, and the company will still have to buy the difference from the networks. But it can “sell” the certificates with substantial profit: for each produced megawatt-hour at the cost of some 350 Polish zloty per MW/h, the certificates will return about 500 zloty per MW/h.

“This is a very good business incentive for investing in environment-friendly technologies. We hope to cover the investment into the CHP unit in four to five years,” says Mr Bernaciak.

As for Eco Power Plant’s core business, producing biofuel mix, the future seems favourable. Used in both industry and households, biofuel mix is cleaner and more user-friendly than, for instance, firewood. The market demand has been on a steep upward trend for some years now inPolandand the neighbouring countries, where the company has already landed a number of sales contracts.

The investment has been co-financed from the NIB lending facility placed with Poland’s state-owned Bank Ochrony Srodowiska. The loan to Eco Power Plant, EUR 4.5 million, is by far the largest of the ten loans granted within the programme. The other ones finance smaller projects for improving sewage treatment and energy efficiency of public buildings in rural municipalities in the western and south-eastern parts of Poland.

FlickrPhoto set on Eco Power Plant, Poland
Photographer: Dimitrijs Alehins/NIB
Free for download, credit the photographer.

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