business plan - the client - turkey-japan.com · page 16 : feasibility study page 17 : vendors...

Adres: Eğitim Mh. Kasap İsmail Sk. No: 14 / 38 Kadıköy - İSTANBUL Tel: ( 216 ) 348 33 60 Faks: ( 216 ) 348 33 26 e-mail: [email protected]

www.dizelenerji.com

DiZEL ENERJi SİSTEMLERİ SAN. TİC. LTD. ŞTİ.

BUSINESS PLAN

OF

TEKİRDAĞ ENERGY PRODUCTION AND WASTE MANAGEMENT PROJECT

OCTOBER 2010 – Dizel Enerji Ltd. Şti. – İstanbul


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CONTENTS: Page 3 : The Project Page 4 : Current Status Pages 5 & 6 : Alternative Ways Of Energy Supply Page 7 : Economical Aspects Alternative Ways Of Energy Supply Page 8 : Demand & Capacity Page 9 : Electric Consumption Page 10 : Steam Consumption Page 11 : The Proposal Page 12 : What Is I.P.P. Page 13 : Technical Advantages Page 14 : Economical Advantages Page 15 : Job Schedule Page 16 : Feasibility Study Page 17 : Vendors & Investment Costs Page 18 : Cost Details Page 19 : Cash Flow 0 : Excess Capacity Utilisation Page 21 : Guarantee Page 22 : Sub-contractors List Page 23 : Waste Management Project Page 24 : Waste List Page 25 : Process Page 26 : Savings Page 27 : Expected Income For Dizel Enerji Page 28 : Power Production


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The Project: The client has 2 factories in Tekirdağ district, side by side. One of them is producing margarine and the other one is ice cream and confectionary. Their head office is in Istanbul. The factories have their independent managements. The energy procurement is managed by the factory managements. The factory managements have had serious administrial problems with the previous supplier. The factory managements have decided to end the Energy Procurement Contract on August 2011, and the head office has approved the decision. The Factory management have started to plan the construction of; - The power transmission line connected to the national power network, - A new Steam Generation Plant, 20 tonnes/hour ( which they do not have, presently ) They have also studied the feasibility of constructing a co-generation plant, but due to their company policy the proposal has been rejected. DİZEL Enerji has made a proposal to the management to give energy supply and waste management services. The proposal has 2 projects, Energy Production and Waste Management where the second helps to increase system efficiency and the economy.


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Current Status: The client’s Tekirdağ factories are purchasing energy ( power and heat ) thru a private power transmission line from Modern Enerji Power Plant accross the factories. The management has decided to finish the purchasing contract on August 2011. They have no power tranmission line connected to the national power grid and they do not have any steam boilers. Even though they can construct a power connection to the national grid quickly, they do not want to be served from the national grid due to below listed technical difficulties;

1- Quality of the national grid power is not good enough due to fluctuations in voltage and frequency will adversely effect the performance and the life of the sensitive equipment operating in the factories,

2- Possible power cuts will adversely effect the production and the cost of the products, - Steam Boiler Plant investment will be necessary and will take at least 8 – 12 months

with cost around 1.000.000 USD.


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Alternative Ways Of Energy ( Power and Heat ) Supply: Power ( Electricity ) can be supplied in 2 ways;

1- Independent Power Production, IPP can be achieved by constructing an individual power plant.

2- Thru National Grid can be achieved by constructing an power transmission line. Independent Power Production, IPP can provide safe, secured, high quality, and economical power.

- The power is Safe, since the power generating capacity is chosen more than potential peak demand,

- The power is Secured, since power supply will not be effected by power cuts. Additionally, the national grid will be senkronised to the power plant as a stand by power supply,

- The power is High Quality, since the voltage and frequency is fixed and free from fluctuations,

- The power is Economical, since the power plant efficiency is higher, so that the cost of power is lower.

IPP Model Power Production is known as an effective, safe and economical way of power consumption, worldwide. Power ( Steam ) can be supplied in 2 ways;

1- Independent Power Production, IPP can be achieved by constructing an individual Steam Boiler House.

2- Thru A Power Plant Steam Distribution System can be achieved if a nearby power plant exists.

Independent Power Production, IPP can provide safe, high quality and economical steam.

- The Power is Safe, since the power generating capacity was chosen more than potantial Peak Demand,

- The Power is High Quality, since the steam pressure and temperature will be fixed and free from fluctuations,

- The Power is Economical, since the power plant efficiency is higher, so that the cost of power is lower.

IPP Model Power Production is known as an effective, safe and economical way of power consumption, worldwide.


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In practice, due to the regulations, the only way of having clean, safe, secured, and economical power supply is to have a power plant. It is not allowed to have a direct power tranmission line from a power plant to any client. The power producers have to use only national power grid which has certain risks. The only way to have an individual power plant is which Dizel Enerji proposes as IPP Model.


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Economical Aspects Of The Alternative Ways Of Energy ( Power and Heat ) Supply:

1- Independent Power Production By The Client Investment: It is the most economical alternative but the client’s management does not want to invest.

2- Independent Power Production, By Dizel Enerji Investment: It is the second in economy. It is the safest and the most reliable way of power supply.

3- Thru National Grid: It is more expensive and risky way. 4- Thru The Existing Contract: It is more expensive than Dizel Enerji alternative and

the serious problems in the contract eliminates it. The existing contract will be ended by August 2011, due to administrial problems and high cost so that the comparison is made between the existing contract and Dizel Enerji proposal. The existing contract:

- Electricity: 55.000.000 kWh/year x 0,20 TL/kWh = 11.000.000 TL/year, - Steam: 110.000 tonnes/year x 37,50 TL/tonnes = 4.125.000 TL/year,

------------------------------------------------------------------------------ Total: 15.125.000 TL/year

Dizel Enerji Proposal:

- Electricity: 55.000.000 kWh/year x 0,152 TL/kWh = 8.360.000 TL/year, - Steam: 110.000 tonnes/year x 35,50 TL/tonnes = 3.905.000 TL/year,

------------------------------------------------------------------------------- Total: 12.265.000 TL/year

The proposed saving: 2.860.000 TL/year

The client’s savings for 10 years: 28.600.000 TL


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Demand and Capacity: The client has 2 factories which consumes 110.000.000 kWh power, yearly. The client’s Tekirdağ factories consume 55.000.000 kWh power and 110.000 tonnes steam. The peak demands are 13.0000 kWh in power and 20 tonnes/hour in steam. The capacity for the power plant was selected as 15 MW to cover 2 years increase in demand.


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Electric Consumption:

0

2

4

6

8

10

12

14

Margarine

Confectionary

Total


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Steam Consumption:

02468

1012141618

Steam ( Tonnes )

Steam ( Tonnes )


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The Proposal: We proposed the client to construct a power plant to provide them;

- High quality ( without having any fluctuation ) electrical power, - Extremely secured ( The National Grid will be synchronized ) electrical power, - The extra savings in their energy expenses.

The steam, hot water and cold water services will be provided the same in the scope of our proposal. Our proposal also covers the full services for their waste management. The capacity is 15 MWe since the peak load is 13.000 kWh. Their power consumption is increasing nearly 8 %, yearly. They consume avg. 20 tonnes/hour steam, therefore we plan to utilise 2 units of 7.500 kWe gas turbine generator sets, 20 tonnes/hour steam generator, 2 groups of absorbtion chillers and a boiler. All of the proposals are ready; the complition times are acceptable. The Factory will allocate a space ( 2.500 sqrm ) for our power plant. The natural gas line connection is also ready. The power plant will be utilising only natural gas as fuel. The waste heat will be recovered and utilised in getting;

- Steam, up to 30 tonnes/hour, without needing extra fuel, - Hot water up to 45 tonnes/hour, without needing extra fuel, - Cold water, 2.500 kW.

The power plant will be operated on tri-generation technology.


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What Is IPP Model? IPP Model is the way of energy sales thru individual power plants built on clients’ premises which are financed and owned by the contractors. The power plants are designed and operated according to the clients’ demands. The plants produce and supply power and heat forms of energy with a lower cost than usual. Dizel Enerji Proposal offers;

- 55.000.000 to 120.000.000 kWh/year power, - 110.000 to 240.000 tonnes/year steam.

Dizel Enerji Proposal offers additionally; - 20.000.000 to 30.000.000 kWh/year chilled water, - 30.000.000 to 45.000.000 kWh/year hot water. Dizel Enerji proposal has a capacity to meet the future demand increases which are planned by the client’s management. IPP Model Power Production is known as an effective, safe and economical way of power consumption, worldwide. In practice, due to the regulations, the only way of having clean, safe, secured, and economical power supply is to have a power plant. It is not allowed to have a direct power tranmission line from a power plant to any client, except IPP Model. The power producers have to use only national power grid which has certain risks. The only way is to have individual power plant which Dizel Enerji proposes as an IPP Model.


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Technical Advantages: If the client intends to purchase the power ( electricity ) thru the national grid, they will be facing below listed problems;

1. Power interruption which means loss of production and money, 2. The power coming thru the national grid is not clean due to fluctuation in voltage

and frequency which seriously effects the existing equipment performance and life. 3. Even if they could purchase the power ( not clean or secured ) they will have to

construct the Steam Generation Plant which is against the Company Policy. Also there is no chance to purchase the steam, around.

We proposed the client to construct a power plant to provide them;

- High quality ( without having any fluctuation ) electrical power, - Extremely secured ( The National Grid will be synchronized ) electrical power, - The extra savings in their energy expenses.

The steam, hot water and cold water services will be provided the same in the scope of our proposal.


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Economical Advantages: Dizel Enerji proposal will supply the client below listed financial gains, without investing;

1- Direct saving from energy expenses: 2.585.000 TL/year, 2- Indirect saving thru energy optimisation: Energy optimisation will be managed with

the co-operation of the client’s engineers, 3- Direct saving from waste removal expenses: 468.750 TL/year.


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Job Schedule – 2011

Item Job Jan Feb Mar Apr May Jun Jul Aug

1 Engineering 2 Procurement 3 Permissions and Licences 4 Electrical Works 5 Mechanical Works 6 HRSG Package Erection 7 GTG Sets Erection 8 Absorbtion Chiller Erection 9 Commissioning and Tests 10 Start Up and Operation 11 Building Works


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Feasibility Study: Investment Cost: 10.000.000 USD. The Data:

- The contract will be signed till the end of 2010, - The project will be started at the beginning of 2011, - The job will be completed in 6 – 8 months and power production will be started on

June – July, - Purchasing guarantee is 10 years.

- Incomes: 12.265.000 TL/year, - Expenses: 9.000.000 TL/year, - Profit: 3.265.000 TL/year.

Calculated profit for 10 years: 3.265.000 TL/year x 10 year = 32.650.000 TL. Investment: 15.000.000 TL, Pay back time: 4,60 year Note: The pay back time will be lowered to 3,7 year if the income from waste management, 765.840 TL/year, is included.


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Vendors & Investment Costs

Vendor USD/Set USD 1 2 sets of Taurus 70 GTG TBM/AREX 3.250.000 6.500.000 2 2 sets of Transformer ABB / SIEMENS 100.000 200.000 3 1 set of HRSG Boiler DEMİR Machinary 300.000 300.000 4 1 set of BROAD Abs. Chiller BROAD 500.000 500.000 5 1 set of Mechanical works DİZEL Enerji 500.000 500.000 6 1 set of Electrical works DİZEL Enerji 1.000.000 1.000.000 7 Engineering Services OZAN Engineering 75.000 75.000 8 Permissions and Licences MTB Consulting 125.000 125.000 9 Construction works DİZEL Enerji 500.000 500.000 10 Administrative works DİZEL Enerji 300.000 300.000 TOTAL INVESTMENT 10.000.000


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Cost Details: - Naturalgas price ise: 0,50 TL/Sm3 ( 0,333 USD(Sm3 ), - Electricity selling price is: 0,152 TL/kWh ( 0,101 USD/kWh ), - Steam selling price is: 35,50 TL/ton ( 23,67 USD/ton ) The cost of energy ( power and heat ): The demand is to supply;

- Power: 55.000.000 kWh/year, - Steam: 110.000 tonnes/year.

The power plant will have gas turbine driven power generators, having 35 % electrical efficiency. HRSG, Heat Recovery Steam Generation Package will be able to produce 110.000 tonnes/year steam without supplimental firing. The naturalgas needed for the demanded power is:

- The heat needed: 55.000.000 kWh/year / 0,35 = 157.142.857 kW/year, - NG needed: 157.142.857 kW/yer / 9,6 kW/Sm3 = 16.369.048 Sm3/year, - The cost of NG: 16.369.048 Sm3/year x 0,50 TL/Sm3 = 8.184.524 TL/year

The unit fuel cost for 1 kWh power and 2 kg steam is: 0,149 TL/unit 8.184.524 TL/55.000.000 unit = 0,149 TL/unit Operation and maintenance cost is not included.


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Cash Flow: The power demand is:

- 55.000.000 kWh power, - 110.000 tonnes steam

The unit prices are:

- 0,152 TL/kWh, - 35,50 TL/ton

Income: 55.000.000 kWh x 0,152 TL/kWh = 8.360.000 TL, 110.000 tonnes x 35,50 TL/ton = 3.905.000 TL, ---------------------------------------------------------- Total income: 12.265.000 TL/year Fuel Cost: 8.184.524 TL/year Gross Profit: 4.080.476 TL/year 10 year projection:

- Income: 122.650.000 TL, - Cost: 81.845.240 TL, - Gr. Profit: 40.804.760 TL


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Excess Capacity Utilisation: The power plant will have production capacity of;

- 125.000.000 kWh/year power, - 250.000 tonnes/year steam.

The client’s demand is;

- 55.000.000 kWh/year power, - 110.000 tonnes/year steam.

The excess capacity is:

- 70.000.000 kWh power, - 140.000 tonnes/year steam.

There is no restriction to sell the power to other potential clients. The client is consuming another 55.000.000 kWh/year power on their different job sites. Dizel Enerji proposal has an alternative price for the second group of factories. The alternative price is lowered to 0,148 TL/kWh from 0,152 TL/kWh which promisses extra 440.000 TL/year saving for the client. Dizel Enerji has to find ways of utilisation for excess steam. The Waste Management Project is the first effective way of it. The other ways are under study, such as drying ( gasification ) organical wastes from Leather Industries Organised District, next to the client.


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Guarantee: The client is offering 10 years or more guaranteed Purchasing Agreement. The client will be buying ( guaranteed min. ) 55.000.000 kWh electricity, 110.000 tonnes of steam, hot water and cold water every year. Every year approximately 8% increase sholud be expected.


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Sub-contractors List: DİZEL Enerji has an engineering team and several sub-contractor/manufacturers in co-operation. We plan to design and specify the main equipment, then procure; - Gas turbine generator sets ( Solar, AEG, Siemens, Kawasaki, etc. ), - Steam and hot water boilers ( Demir Makina - İstanbul ), - Transformers ( ABB, Best ), - Absorbtion chillers ( Broad, York, Trane ). We aim to keep the investment cost as low as possible. DİZEL Enerji will operate the power plant, too. The maintenance will be sub-contracted to the equipment manufacturers.


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The Waste Management Project: The client’s Tekirdağ factories produce below listed amount and types of wastes. They collect, clasify, store and deliver to several waste incineration plants. The client is paying considerable amount of incineration fee in addition to the other expenses. The client’s factories are producing below listed wastes:

- 10.000 kg/year Contaminated Ni Catalist, - 1.000 tonnes/year Filter Sludge, - 400 tonnes/year Contaminated Bristol sands, - 3.000 tonnes/year Acid Oil, - 350 tonnes/year Organic Wastes, - 350 tonnes/year Tank Bottom Sludge, - In considerable amount organic, metallic, plastic, wood and paper wastes.

Presently the client is;

- Collecting, sorting and properly storing the waste, - Transporting and paying for incineration.

DİZEL Enerji has offered to;

- do all the job, - provide 30% min saving, - utilise the waste in converting to energy ( Carbon Credit ) and industrial re-cycling.

Power Production Out Of Waste Project will be done within the Power Plant Project, as an extension.


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Waste List: The client’s Tekirdağ factories are producing below listed wastes:

- 10.000 kg/year Contaminated Ni Catalist, - 1.000 tonnes/year Filter Sludge, - 400 tonnes/year Contaminated Bristol sands, - 3.000 tonnes/year Acid Oil, - 350 tonnes/year Organic Wastes, - 350 tonnes/year Tank Bottom Sludge, - In considerable amount organic, metallic, plastic, wood and paper waste.


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The Waste Management Project / Process: Dizel Enerji is planning to manage the waste and use it for energy production. The brief process information is given below: Filter Sludge: 1.000 tonnes/year slugde has only 40 % dry organic material, the rest is water. 600 tonnes of water will be evaporated by the waste heat coming from the power plant and 400 tonnes/year organic material will be sold to cement factories. On the second phase of the project, organic material will be used as fuel for energy production, built for gasification purpose. Contaminated Bristol Sand: 400 tonnes/year sand will be washed by chemicals to recover the oil. The oil will be mixed with the acid oil and used for energy production. 220 tonnes of oil will be recovered from 400 tonnes of sand. The sand, 180 tonnes/year will be sold to cement factories. Acid Oil: 3.000 tonnes/year Acid oil will be used as diesel engine fuel for energy production. Tank Bottom Sludge: 350 tonnes/year contains 18% vegetable oil. 63 tonnes of oil will be recovered from 350 tonnes of sludge and will be added to acid oil. The rest is organic waste which will be used as raw material either in bio-gas or gasification. Organic Waste: 350 tonnes/year will be used as raw material either in bio-gas or gasification. Contaminated Ni Catalist: 10.000 kg/year contains 85 % vegetable oil. 8,5 tonnes of oil will be recovered from 10 tonnes of catalist. The catalist, 1.500 kg/year will be sold to nickel buyers. Organic, metallic, plastic, wood and paper waste will be sorted and sold.


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The Savings Thru Waste Management Project: The current cost of the waste management for the client: The client’s factory management is assigning a team of workers for collecting, sorting and properly storing the waste, paying for transportation and incineration. Presently, the correct expenses are not yet being provided, so that the estimated values were used in below calculations. Filter Sludge removal: 1.000 tonnes/year; removal cost is 500 TL/ton. The Cost: 1.000 tonnes/year x 500 TL/ton = 500.000 TL/year. Contaminated Bristol Sand: 400 tonnes/year; removal cost is 500 TL/ton. The Cost: 400 tonnes/year x 500 TL/ton = 200.000 TL/year. Acid Oil: 3.000 tonnes/year acid oil is sold at a price of 800 TL/ton. The Income: 3.000 tonnes/year x 800 TL/ton = 2.400.000 TL/year. The difference: 2.400.000 TL/year x 10% = 240.000 TL/year. Tank Bottom Sludge: 350 tonnes/year; removal cost is 500 TL/ton. The Cost: 350 tonnes/year x 500 TL/ton = 175.000 TL/year. Organic Wastes: 350 tonnes/year; removal cost is 250 TL/ton. The Cost: 350 tonnes/year x 250 TL/ton = 87.500 TL/year. Contaminated Ni Catalist: 10.000 kg/year is sold. Dizel Enerji has offered the same price, so that no extra income is expected. Organic, metallic, plastic, wood and paper waste will be sorted and sold. Dizel Enerji has offered the same price, so that no extra income is expected. The cost of the team: 600.000 TL/year, The removal expenses: 962.500 TL/year, --------------------------------------------------- Total cost for waste management: 1.562.500 TL Dizel Enerji has offered min 30 % savings which is 468.750 TL/year, minimum.


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The Waste Management Project / Expected Income For Dizel Enerji: Filter Sludge: 400 tonnes/year; the organic material price is 100 TL/ton. Removal fee from the client: 500.000 TL/year x 70 % = 350.000 TL/year, Organic material sales: 400 tonnes/year x 100 TL/ton = 40.000 TL/year, ---------------------------------------------------------------------------------------- Total Income: 390.000 TL/year Contaminated Bristol Sand: 400 tonnes/year; sand price is 100 TL/ton, recovered oil price is 880 TL/ton Removal fee from the client: 200.000 TL/year x 70 % = 140.000 TL/year, Recovered oil value: 240 tonnes/year x 880 TL/ton = 211.200 TL/year, Recovered sand value: 180 tonnes/year x 100 TL/ton = 18.000 TL/year, ---------------------------------------------------------------------------------------- Total Income: 369.200 TL/year Tank Bottom Sludge: 350 tonnes/year; the organic material price is 100 TL/ton, recovered oil price is 880 TL/ton Removal fee from the client: 175.000 TL/year x 70 % = 122.500 TL/year, Recovered oil value: 63 tonnes/year x 880 TL/ton = 55.440 TL/year, Rec. organic mat. value: 287 tonnes/year x 100 TL/ton = 28.700 TL/year, ---------------------------------------------------------------------------------------- Total Income: 206.640 TL/year Organic Waste: 350 tonnes/year; the value not yet calculated. Contaminated Ni Catalist: 10.000 kg/year; the value not yet calculated Organic, metallic, plastic, wood and paper waste; the value not yet calculated. The expenses for the team: 200.000 TL/year, The waste manegement income: 965.8400 TL/year, --------------------------------------------------------------- Total cost for waste management: 765.840 TL Dizel Enerji will be gaining 765.840 TL/year and extra income will be supplied thru;

- the income from other items, - power production thru all kinds of mentioned wastes.


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Power Production Thru Waste: The client’s Tekirdağ factories are producing below listed wastes. Dizel Enerji plans to utilise the mentioned waste in energy production. The planned way of energy production: Filter Sludge: 400 tonnes/year organic material will be used for charging the gasification unit. The produced syngas will be used as gas fuel. Contaminated Bristol Sand: 240 tonnes/year oil recovered and will be used as liquid fuel. Acid Oil: 3.000 tonnes/year acid oil will be used as liquid fuel. Tank Bottom Sludge: 63 tonnes/year oil will be used as liquid fuel. 287 tonnes/year organic material will be used for charging the gasification unit. Produced syngas will be used as gas fuel. Organic Wastes: 350 tonnes/year organic material will be used for charging the gasification unit. Produced syngas will be used as gas fuel. Contaminated Ni Catalist: 8.500 kg/year oil will be used as liquid fuel. The total amount of liquid fuel ( vegetable oil ) is 3.313,5 tonnes/year and estimated amount of gaseous fuel is 625.000 Sm3/year. Calculated energy production will be approximately 20.000.000 kWh power and 25.000.000 kW heat. According to the regulations, the government pays 0,14 Euro/kWh (0,30 TL/kWh) which is equal to 6.000.000 TL/year.

business plan - the client - turkey-japan.com · page 16 : feasibility study page 17 : vendors...

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