Download - olive oil 13 05 10
GUIDELINES
for projects aiming to use pomace
for energy purposes
ENERGYFROM
POMACE
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Co-ordinated by
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EIDOS coop, Raffaella Bruzzone, Roberta Casapietra, Maria Fabianelli,
Belén Heredia Galán, Walter Geloso, Kostas Kostantinou, José La Cal Herrera,
Ninoslav Luk, Juan Antonio Miralles, Elena Romero Aranda, Sebastjan Rosa,
Pierpaolo Rossodivita, Irene Tsakiridou
Roberta Casapietra - ARE LIGURIA S.p.A.
ALG snc - Genova
ALG snc - Genova
Printed in April 2010
1
Table of contents
1
2
3
3.1
3.2
3.3
3.4
3.5
3.6
4
4.1
4.2
4.3
4.4
4.5
Aims
Guidelines structure
Process for the identification and evaluation
of the project
Introduction
Step 1 - Context Analysis
Step 2 - Current and forseen demand analysis
Step 3 - Technology analysis
Step 4 - Project Alternatives Identification
Step 5 - Analysis and evaluation of the project
alternatives
Technical sheets
Sheets concerning Step 1 - Context Analysis
Sheets concerning Step 2 - Current and foreesen
demnd analysis
Sheets concerning Step 3 - Tecnology Analysis
Sheets concerning Step 4 - Project alternative
identification
Sheets concerning Step 5 - Alternative analysis and
evaluation
3
5
6
6
7
11
12
13
14
26
26
30
31
33
34
2
Glossary
!
!
!
!
Pit: The olive stone.
Pomace or virgin pomace or olive
pomace or crude olive cake: The
residual paste after the olive oil
extraction. It is constituted from a
mixture of olive pit/stone, olive pulp
& skin, as well as olive oil plus the
water added in the olive mills. The
moisture content is about 35-70%
depending on the olive oil
production process.
Dried pomace: contains oil, pulp, with or without pits,
approx.10% humidity.
Exhausted pomace or depleted pomace or extracted pomace
or exhausted (deoiled) olive cake: normally produced by
pomace oil refineries, contains: pulp, with or without pits,
approx.10 % humidity (extracted with hexane).
Olive pit Dried pomace
Virgin pomace
This document defines guidelines for the evaluation of the feasibility conditions for
the realisation of an olive pomace-to-energy plant based on a local supply chain,
replacing the fossil fuels (mainly diesel oil and natural gas).1Olive pomace is an important resource in the European Union: each year in EU we
produce more that 7 million tons of olive pomace that can be used for energy
production instead of being disposed of as waste.
Particularly, the guidelines help in delineating the project characteristics in terms of
technological, economic and environmental aspects as well as in evaluating the
sustainability under the entrepreneurial profile.
These guidelines make reference both to consolidated methodologies, exploited at
an international level, and to the testing, carried out during the MORE Project,
through the elaboration of Business Plans in the partner regions (Liguria in Italy,
Province of Jaen in Spain, Istria in
Slovenia and Croatia, Crete in
Greece). These guidelines represent
an operating tool for non-specialised
people to identify, plan and evaluate
economically sustainable supply
chain initiatives to exploit pomace for
energy purposes. Particularly, they
can be useful for:
! Public Bodies willing to promote
and support in their territory the
development of ventures giving
potentially large scale advantages
for the community, both in terms of employment and product added value as well
as economic saving and environmental protection;
! Operators in the energy or agricultural-food sectors wanting to develop and/or
integrate their economic activities, seizing the opportunity offered by biomass
energy exploitation (e.g. Olive-millers to better manage their solid residues and
use them as a renewable energy source);
! New entrepreneurial entities wanting to start economic initiatives in the energy
sector.
1 Olive pomace is the raw material derived from olive oil production processes and it is a mixture of olive pits, olive pulp and the
water added in the olive mills. The moisture content is approximately 40-70% depending on the olive oil extraction process. The
amount of raw material depends on climate conditions, which determine the annual production period (8 to 9 months/year). The
average heating value of dry pomace (with stones, low moisture content) is 3500-4000 kcal/kg while for pits is 4000-4500
kcal/kg. 3
1. Aims
Olive leaves remover
4
1. Aims
In general there are two approaches to exploit pomace for energy at technological
level:
> Direct combustion at biomass burners for the production of space heating or hot
water. The simplest way to exploit pomace for energy production is by direct
combustion. Combustion type boilers give off their heat to radiators in exactly the
same way as e.g. a diesel-fired one. These boilers are mainly automatic; they are
equipped with a silo containing pomace (which can be dry or depleted pomace, pit or
pellet)
> Combustion in a biomass plant for the production of electricity and/or district heating
(CHP). Co-generation requires a more intensive and larger scale production plant
and a certain amount of fuel is needed to ensure the sustainability of the plant. You
can use dry or depleted pomace.
Generally speaking, in those areas where only virgin pomace is available, it will be
necessary to foresee also a treatment plant, in order to obtain dried pomace.
The potential of making pellets out of pomace is also a viable alternative.
Pit packaging machine
This document consists of two sections:
a)The first section (chapter 3) deals with the process used to identify, plan and
evaluate the economic and financial sustainability of the initiative concerning the
construction of a pomace plant for energy purposes. It goes step by step through
a logical path made of analysis, identification of solutions and final evaluation. The
methods used are also described in this part.
b) The second section (chapter 4) contains the technical sheets displaying the
contents and useful tools for the development of each step in which the process is
articulated.
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2. Guidelines structure
3.1 IntroductionThe proposed process consists of 5 steps, which respond to key for the decision
maker to take a rational choice:
1) How much pomace is available, where and when?
(context analysis);
2) Who could be interested in using pomace as fuel?
(demand analysis);
3) Which kind of plant?
(technology analysis);
4) What can be implemented in our territory?
(design of the alternatives);
5) Which is the best solution?
(alternatives analysis and evaluation).
CONTEXTANALYSIS
ALTERNATIVEIDENTIFICATION
CURRENT ANDFORESEEN DEMAND
ANALYSIS
TECHMOLOGYANALYSIS
ANALYSIS ANDEVALUATION OF THE
ALTERNATIVESINPUT
DECISIONMAKER
Fig. 1 The process steps6
3. Process for the identification and evaluation of the project
7
3. Process for the identification and evaluation of the project
3.2 Step 1 - Context Analysis
a) Reference scenario analysis
This step starts from the analysis of the pomace oil market at the European and
Worldwide levels, pointing out the economic revenue in terms of earning margins.
The historical analysis of pomace production is carried out and focused on this
product role changes in the last decades: from agricultural - food industry refinement
to waste disposal with an increasing cost, until a value recovery through an
innovative use in the energy field.
From a methodological standpoint, it is important to know and assess the supply and
demand factors of the energy sector, its regulatory provisions, level of technological
development, possible distribution channels and the trends underway.
A specific legal framework will be drafted with reference to the rules that place
restrictions on initiatives and policy analysis is important (e.g. promotion of
renewable energy quota) as much as knowledge of incentives for
biomass/renewable energy.
b) Analysis of pomace supply
The main characteristics of the target territory as well as olive oil/pomace production
need to be examined. More specifically, it is important to understand:
! the olive oil production level, with the aim to find the areas where the greatest olive
oil/pomace productions concentrate
! the current modes and costs for pomace
collection and disposal (f.e. land
spreading, pomace oil refinery,
depitting, etc.)
! the prices paid to the olive oil
mills for pomace (and/or only
pit) (where pomace has
still a value for
industrial purposes
eg.: pomace refineries).
In the areas (countries/regions)
where olive pomace is still
not evaluated in terms of price
8
and services and if service costs does not exist yet, it is necessary to evaluate and
calculate the possible service costs and potential financial value of pomace.
! the territory's main characteristics, in terms of development forecasts and/or
transformations in progress
! pomace production trend through an historical analysis of the olive oil production
cycles in the mills which might point out different yearly production due for example
to alternate olive trees bearings. In areas where olive growing is still in developing
phase it is necessary to estimate the trends of newly planted olive trees in order to
forecast the future scenario of potentially expected amounts of olive pomace
! the location of current olive oil (and then pomace) production according to
administrative subdivisions (eg.: province, municipalities or other geographical
delineation)
! pomace quantity presumably available and able to sustain the initiative. Linear
regression models can be used to make forecasts, or predict the future data for a
time series in order to test hypotheses or to model dependent relationships
! the geographical context (eg. environmental or morphological constraints capable
to affect olive production; termination of production life cycle of existing trees, etc.)
in order to validate forecasts.
Fig 2: Linear Regression
4
3
2
1
0
0,2 0,4 0,6 0,8 1,0
LINEARREGRESSION
3. Process for the identification and evaluation of the project
c) Opportunities and Threats Analysis
In order to identify the technical and management hypotheses concerning project
implementation, it is useful to detect the threats and opportunities characterising
pomace in the perspective of its exploitation in the energy market. The elements
resulting from this analysis shall be later used to better orient and define the business
model supporting the initiative.
As far as the analysis of opportunities and threats is concerned, it is necessary to
carefully examine the prescriptions in force concerning the use of pomace, since
often the different national laws, complying with the adopted classifications (residues
which can be re-used in the food industry or waste to dispose or conduct mandatory
treatment according to differentiated procedures) limit the ways of use. We normally
use the SWOT analysis methodology.
9
3. Process for the identification and evaluation of the project
Pit storage silo
Strengths (S) Weaknesses (W)
Opportunities
(O)
Threats
(T)
Internal Analysis
S-O Strategies:
Develop new methods able to exploit
the strengths of the company.
S-T Strategies:
Exploit strengths to mitigate threats.
W-O Strategies:
Eliminate weaknesses to enable
new opportunities.
W-T Strategies:
Determine actions to prevent
threats from worsening
weaknesses.
SWOT ANALYSIS
An
aly
sis
10
3. Process for the identification and evaluation of the project
Focus. SWOT ANALYSIS
it is a strategic planning tool used to assess the Strengths, Weaknesses,
Opportunities and Threats of a project or business venture when an organization or a
decision maker has to take a certain decision to achieve an objective.
The validity of a SWOT analysis is directly related to how complete preliminary
studies are.
The issue under assessment should be studied in detail in order to determine all the
parameters, relationships and synergies with other solutions.
For this reason it is necessary to build a broad information framework to support
decisions.
In particular, a SWOT analysis is expressed by:
! Strengths: attributes of the organization or company or project that are helpful to
achieve the objective;
! Weaknesses: attributes of the organization or company or project that are
considered harmful to achieve the objective;
! Opportunities: external conditions considered helpful to achieve the objective;
! Threats: represent the risks deriving from external conditions that could damage to
the performance of the company or project.
A typical example of a scheme for a SWOT analysis model is provided below:
Table 1
3.3 Step 2 - Current and foreseen demand analysis
In order to analyse the demand side and make suitable forecasts., it is advisable to:
! collect market data on a national/regional scale concerning use of pomace energy
or, in its absence, to obtain information concerning other kinds of similar biomass,
for example wood pellets or wood chips, in order to understand market trends and
the tendency towards alternative fuels consumption
! define potential customers on the territory related to the project, both in terms of
energy plants which can be adapted to use pomace as fuel and obsolete plants to
be replaced by new ones powered by pomace.
An analysis of the concentration of potential consumption is another useful method,
associated to the demand analysis, in order to determine, at geographical level, the
capacity to attract users on the local market (in terms of distances and transport
issues).
11
3. Process for the identification and evaluation of the project
Malaxer
3.4 Step 3 - Technology analysis
This step will help to delineate the scenario related to existing energy technologies,
pointing out the market trend of the different plant typologies (eg.: centralised or
autonomous boilers, air generators, industrial boilers, heat generators or public plants,
etc.) and to supply information about pomace fuelled energy plants existing in the
market (their technical characteristics, suppliers, costs, advantages and
disadvantages).
The choice of the right technology shall be based on:
! the size: each technology has its best application (in terms of costs and
performance) with specific biomass quantities - it therefore will be chosen also
according to biomass availability at local level
! demand size and demand timing: demand and supply have to match in terms of
quantities and timing - in case of limited supply, only a smaller plant will be
possible; in case of great supply, the demand will not be sufficient and probably
stocking will become necessary
! demand location: densely populated areas probably prevent the installation of
big plants, while rural areas, characterised by sparsely located houses, affect the
possibility to use the heat in a concentrated way;
! environmental aspects: small biomass plants (eg. domestic heat appliances)
have a proportionally higher environmental impact because (differently from
bigger plants) they are not equipped with sophisticated smokes filters and are
therefore only possible in non polluted areas and in limited number.
12
3. Process for the identification and evaluation of the project
3.5 Step 4 - Project Alternatives Identification
In this step all the possible combinations between potential final users of pomace for
energy (eg. families, companies with high or low energy consumption level, Public
Administration, etc), and the product (eg. virgin pomace, dried/depleted pomace,
pellet/pit, type of energy plant) will be identified and analysed. These combinations
lead to define one or more technical and management hypotheses for pomace
use/transformation.
If the local market shows inconsistent characteristics because of its immaturity, the
analysis can be focused, particularly, on the segment of the public bodies taking the
role of "bridgehead", favouring the beginning of market product absorption and
carrying out the function of livening up the market, able to activate on the territory an
economic pomace - energy production chain.
For each market segment chosen by the business strategy the benefits are analysed
and obtained using pomace as fuel as an alternative to the fossil ones which are
more commonly used.
It is then necessary to point out that operators of the market should know the
identified choices of the project, in order to express their satisfaction.
The project promoter shall, then, identify and use the most appropriate tools and
communication ways to efficiently reach the greatest number of stakeholders
potentially interested in the project. Olive growers, olive oil-millers, olive oil
companies, companies in the energy sector and Local Bodies are the target to
address the training/information actions concerning the identified project, which can
be carried out through mailing and e-mailing, seminars, brochures, advertisement in
specialised and non-specialised press.
A Cost-Benefit Analysis (CBA) was used with respect to applicable metho-
dology.
13
3. Process for the identification and evaluation of the project
Stone mill
3.6 Step 5 - Analysis and evaluation of the project alternatives
Each project alternative considered feasible or that, in any case, is considered of
significant interest, is analysed based on the factors set forth below:
a) Management model
At first it is necessary to identify the business model by defining the relation system
established between pomace use/transformation with the other stakeholders
composing the olive tree - pomace - energy supply chain.
b) Ownership Structure
The ownership structure of the pomace use/transformation supply chain is defined
according to the previously defined model, providing the possibility of constituting
public-private partnerships. For each of the stakeholders joining the ownership
structure a description defining also its tasks and target in the project field should be
supplied.
The choice of the stakeholders will depend on the innovative character of the
initiative and its return level (which will be evaluated later).
Then the juridical form to be assumed by the project is delineated (even as a function
of the participants nature - public, private, etc.).
c) Organisation features
It is necessary to define the organisation of a structure able to promote the pomace
use/transformation into energy in terms of company functions such as technical,
operating, management profiles, defining, at the same time, the activity to outsource.
The amount of staff is then determined as well as its roles and responsibilities.
14
3. Process for the identification and evaluation of the project
Stone mill
d) Technological characteristics
The chosen technological configuration should be described, together with the main
technical components and features (e.g.: production capacity, installed electrical
power, thermal power, processing temperature of the heat exchanger, etc.).
The technological features should be such as to guarantee production (of pomace
and/or energy) quantities coherent with the requirements of the target customers
and qualitative standards complying with the prescriptions of this sector.
e) Location and logistics
It is necessary to define the site of the facilities using/transforming pomace into
energy, identifying its geographic location and the surface area needed for
infrastructure (office space, sheds, other buildings) as well as operational space in
which it should be subdivided (eg.: stocking, transformation, pomace weighing,
general services).
The choice of the plant site is strongly related to logistics. Indeed, it is necessary to
define the pomace supply chain and distribution chain (dried pomace, pellets, pits)
with respect to the management model determined, describing the transportation
and stocking phases composing it, with particular reference to the amounts handled,
distances, timeframes and transfer costs for collection and distribution, from the
collection points in the territory, to customer locations and their distance from the
plant site as well as the optimal routes for reaching them.
For the purpose of methodology, current traffic flow analyses can be used as
reference based on documentation available or from bodies managing the road
network or highways.
Based on this data it is possible to develop simulations to determine itineraries and
transport flow for raw materials (wet pomace, dry/depleted pomace, pomace pellets
or pits), in consideration of the traffic flow according to time of day and season of the
year.
15
3. Process for the identification and evaluation of the project
Olive press (traditional system)
f) Economic-financial assessment
The assessment of the identified management solution is dealt with using two
different analysis profiles:
! The value analysis, aiming at verifying the capacity of the business venture to
sustain itself, both from the economic and financial points of view, repaying the
investment;
! The analysis of the breakeven point, aiming at identifying, as the minimum target,
the product quantities which must be necessarily put on the market to guarantee
covering the costs incurred for project implementation and operations.
In particular, the value is analyzed by making forecasts on operating cash flow
(OCF) generated by the initiative (see table below) and for a preset time span, i.e.,
normally the number of useful life years of the technology used. The obtained figures
are then discounted at a certain discount rate in order to adjust the values to the time
span.
Table 2
16
Operating Cash Flow
(amounts in €)
Description Total Year 1 Year 2 Year n
a) Net revenues
b) Direct cost of sales
c) Contribution margin (a-b)
d) Fixed costs
e) Operating income
f) Operating income tax
g) Amortization and depreciation
h) Cash-flow (a-b+c)
i) Investments
l) OCF (h-e)
m) Cumulative cash flow
3. Process for the identification and evaluation of the project
The discounting process makes it possible to calculate financial sustainability
indices for the initiative, which show, in particular, return on investment (IRR) and
economic value or wealth created (NPV) after completing the project.
The table below shows the calculation formulas for these two indicators and their
acceptable thresholds.
Table 3
The values used to calculate the OCF comprise investment costs necessary to
implement the project, revenues and operating costs. These items make up the
monetary quantification of the projects developed and analyzed above (see points
a,b,c,d,e).
The choice of the discount rate depends on whether the project is entirely funded with
public resources or if all or part of the funds are from private investment through capital
contributions from parties investing in the project by having recourse to bank loans.
In the first case the discount rate is between 5% and 6% according to prescriptions
from national governments or the European Union.
In the second case the calculation depends on the Weighted Average Cost of
Capital or WACC (see table below).
Table 4
Legend: OCF = Operating Cash Flow; D = Discount Rate; t = years
Indicator Acceptable ThresholdFormula
Net Present Value (NPV)
Internal Rate of Return (IRR)
S -t-1FOCF(t) x (1+D)
S -t-1FOCF(t) x (1+IRR) = 0
NPV > 0
IRR > D
17
Own capital
Banks
Soft loans
Total
WACC
3,000.00
5,000.00
2,000.00
10,000.00
Source
of financing
Amount
(a)
Weight
(b)
Weighted cost
(bxc)
Specific cost
(c)
3.00%
3.50%
0.60%
7.10%
30.00%
50.00%
20.00%
10.00%
7.00%
3.00%
3. Process for the identification and evaluation of the project
It should be mentioned that for bank loans and soft loans the cost of money,
expressed by the specific interest rate of reference, is an actual cost, while for the
cost of own capital the rate is an opportunity cost. Indeed, it is the rate of return
expected by private investors on their investment. Its estimation is not easy to
determine and there are various methods in the literature to calculate it. The most
recent theory (Market Risk Premium), supported by empirical studies, is geared
towards considering an opportunity cost between 9% and 10% for a private operator
where there is also public financing to support the initiative.
The breakeven point (BEP) analysis, also known as the Cost-Volume-Profit
analysis, is made by computing the following four variables: total sales
(quantity sold - Q) , revenues, variable costs (direct cost of sales) and fixed
costs (see figure below).
Figure 3
It should be noted how variable costs are only those closely related to realizing the
quantity of energy product to obtain, such as wet pomace to be transformed, transport
costs and labour costs for transforming wet pomace.
The volume of breakeven revenues, i.e., the amount of sales needed to cover
operating costs, is obtained by applying the following formula:
A : fixed costs1
A : contribution margin ratio = total contribution margin / total sales2
B = A /Aeven 1 218
QQ’
€
€’BEP
Revenue
Total Cost
Variable Cost
Fixed Cost
3. Process for the identification and evaluation of the project
The amount of product needed to reach the breakeven point is obtained by dividing
the breakeven sales by the unit sales price.
Lastly, it should be mentioned that if there are soft loans involved for the project it is
necessary to show the main effects on the financial results obtained and compare
the impact of using public funding with not using public funding.
g) Cost benefit analysis
A cost-benefit study is performed to assess if it is cost-effective for potential
customers to use pomace instead of fossil fuels, as well as its impact on the
environment In particular, for the cost-benefit study an assessment model based on
Differential Cash Flow (DCF) can be prepared, making it possible to compare
alternative situations for example, (see table 5): one where the potential customer
uses a fossil fuel boiler and one where the customer uses a pomace(pit)-burning
boiler.
19
3. Process for the identification and evaluation of the project
Auger conveying pit or pomace
Table 5
The variables considered over the time of useful life of the new technology, which is
assessed when introduced, are the boiler purchase cost and costs for maintenance
and fuel.
It should be mentioned that if the potential customer already has a fossil fuel boiler
then the value of the boiler, not yet adjusted for depreciation, is accounted for and
considered as an added cost.
The DCF indicates the amount of resources available or needed when using an
alternative solution, without considering demand or use of surplus.
The DCF can be discounted following the same method used in the financial
analysis, thus obtaining two indicators, NPV and IRR, which measure cost-
effectiveness while taking the time factor into consideration.
Total Year 1 Year 2 Year n
Differential Cash Flow
(amounts in €)
Description
a) Situation of boiler burning
pomace
(e.g., dry pomace)
a.1) Cost to purchase boiler
a.2) Yearly maintenance cost
a.3) Yearly fuel cost
a.4) Cash Flow situation pomace
( a.1÷a.3)
b) Situation of boiler burning XXX.
(fossil fuel)
b.1) Cost to purchase boiler
b.2) Yearly maintenance cost
b.3) Yearly fuel cost
b.4) Cash Flow situation of boiler
burning XXX. ( b.1÷b.3)
c) Differential cash flow
(b.4-a.4)
d) Cumulative differential
cash flow
S
S
20
3. Process for the identification and evaluation of the project
21
3. Process for the identification and evaluation of the project
FOCUS: environment
The environmental impact is assessed by quantifying prevented CO emissions. In 2
this paper the latter were calculated by considering the contributions with respect to
the following factors:
1. Transport from wet pomace collection centre to treatment centre (drying, depitting,
pelletizing facility or CHP plant);
2. Type of facility installed to treat pomace;
3. Transport from pomace treatment centre (drying, pelletizing or depitting facility - if
any) or from depleted pomace collection centres (pomace oil refinery) to end
user(s);
4. Heat generator at end user(s).
Concerning point 1):
i. The number of kilometres is calculated between the wet pomace collection cen-
tre and the treatment centre;
ii. The calculation is extended to n collection points;
iii. After defining total kilometres, this is associated to the amount of wet pomace to
transport;
Drying plant at a pomace refinery
in Crete (Greece)
22
3. Process for the identification and evaluation of the project
iv. Determine the most suitable type of vehicle for transport (size and load capa-
city), type of fuel (generally diesel) and then the number of trips or vehicles
necessary to transport the amount of pomace mentioned under point iii);
v. Considering the type of route, the average speed is estimated since CO emis-2
sions depend on the load amount, distance and time (speed).
Concerning point 2) there are 2 cases that should be distinguished:
2.1) Pomace drying unit.
i. The maximum electrical power absorbed by components from the grid is calculated;
ii. That electrical power is converted into energy used based on the days the unit is
in operation per year and the hours the unit is in operation per day; the related
Co emissions of the electrical power generated by fossil fuels are calculated;2
iii. An estimate is made on the equivalent amount of natural gas needed to produce
the heat requirements for drying the wet pomace.
2.2 ) Pelletizing unit
The steps listed above are repeated with the exception that it is necessary to indicate
the electrical power absorbed by special components for pelletizing units that
incorporate a section for drying wet pomace.
2.3) CHP plant
Once the CHP plant size is known, on the basis of the related thermal and electrical
power i twill be possible to calculate the quantity of methane equivalent needed to
produce the same power through 2 different plants (one thermal and one electrical). 2The CO quantity generated by the methane in he CHP plant (a saving in itself already)
must be decreased by the CO quantity generated by the electrical energy purchased 2
by the grid.
Concerning point 3), once again there are 2 cases:
3.1 Pelletizing unit:
i. The amount of pellets to be transported is estimated;
ii. Determine the most suitable type of vehicle for transport (size and load capacity),
type of fuel (gene-rally diesel) and then the number of trips or vehicles necessary
to transport the amount of pellets men-tioned under point i.);
23
3. Process for the identification and evaluation of the project
Historic olive press
iii. Considering the type of route, the average speed is estimated since CO emis-2
sions depend on the load amount, distance and time (speed).
3.2 Drying unit:
i. The number of kilometres is calculated between the wet pomace drying facility
and end user heat generators;
ii. The calculation is extended to n users;
iii. After defining total kilometres, this is associated to the amount of dry pomace to
transport;
iv. Determine the most suitable type of vehicle for transport (size and load capacity),
type of fuel (generally diesel) and then the number of trips or vehicles necessary
to transport the amount of pomace mentioned under point iii);
v. Considering the type of route, the average speed is estimated since CO emis-2
sions depend on the load amount, distance and time (speed).
Concerning point 4):
i. The pellet and/or dry pomace burning boiler is determined to satisfy the heating
needs of user(s);
ii. An assessment is made to determine the natural gas boiler able to guarantee the
heating amount calculated above; considering the higher average performance 3of this type of boiler compared to those burning non-fossil fuels, m of natural gas
necessary to provide the same primary heat energy is calculated;
iii. The CO emissions associated to burning natural gas (from point ii.) is calcu-2
lated; iv. This value is included in the equation to determine CO in terms of 2
emissions prevented.
Thus, the total balance is composed of four terms functionally related to the following
formula:
CO tot = A +A +A -A +A2 1 2 3 4 5
Where:
CO tot = emissioni di CO emissions [kg/year];2 2
A = CO related to transport of wet pomace from production units (olive oil mills/po-1 2
mace refineries) to the treatment facility (pelletizer/dried/CHP);
A = CO related to transport of dry pomace to end users (where A and A are absent);2 2 3 5
A = CO related to transport of pellets to end users (where A and A are absent);3 2 2 5
A = CO related to the equivalent natural gas boiler replaced with a pellet or dry poma-4 2
ce boiler;
A = CO elated to the thermal and electrical power generated by the CHP plant deduc-5 2
ted of the electricity needed by the plant components and derived by the grid.
24
3. Process for the identification and evaluation of the project
Storage silo feeding system
25
The positive effects from using pellet or pomace-burning boilers are further shown by
the considerable reduction in CO emissions where they replace boilers burning 2
diesel, which is a fuel that is much more polluting than natural gas, but still commonly
used at facilities, often large, especially for old buildings.The quantification is made
by following this procedure, in many parts the same as point 4 above:
i. The pellet and/or dry pomace burning boiler is determined to satisfy the heating
needs of user(s);
ii. An assessment is made to determine the diesel-fired boiler able to guarantee the
heating amount calculated above; considering the average performance of this
type of boiler, the number of litres of diesel needed to provide the same primary
heat energy is calculated;
iii. The CO emissions associated to burning diesel (from point ii.) is calculated.2
iv. This value is included in the equation to determine CO in terms of emissions 2
prevented.
3. Process for the identification and evaluation of the project
Auger conveying pit or pomace into the silo
4.1 Sheets concerning Step 1 Context Analysis
SCENARIO SURVEY Sheet
! Outline the history concerning pomace exploitation .
! Describe the current innovative biomass exploitation initiatives in reference
contexts (national, European, etc.) about which it is possible to find data and
information.
! Report examples concerning pomace use as alternative fuel (eg.: market
penetration, trend, availability level and business channels, current life cycle
phase, etc.).
! Supply information about pomace characteristics (eg.: chemical and physical
features, calorific power, polluted emissions, etc.) and compare with other fuels.
SUPPLY ANALYSIS Sheet
! Carry out the geographical identification and delimitation of the project reference
territory.
! Supply a description of the reference territory (eg.: extension, orography, agricultural
surfaces used for the olive growing, possible changes in progress in the agricultural
destination of use).
! Point out the olive production (in tons) measured in a particular period of time (about
at least a decade) in the reference territory, possibly divided by areas, as exemplified
in the table 6.
26
4. Technical sheets
Pellets
Table 6
! Point out annual pomace production (in tons) measured in a particular period of time
(about at least a decade) in the reference territory as exemplified in the table
displayed hereunder.
Table 7: Example
Pomace production in Liguria (values in 100 Kgs)
! Carry out the produced pomace estimate (in tons) in the reference territory and the
available quantity for energy purposes in % the production total, as exemplified in the
table 8. 27
4. Technical sheets
Average value
MIN value
MAX value
Period
from the year x
to the year x+n
Area 2 Area 3 Area 4 TotalArea 1
1990/91
1991/92
1992/93
1993/94
1994/95
1995/96
1996/97
1997/98
1998/99
1999/00
2000/01
2001/02
2002/03
2003/04
2004/05
average
%
Province
Genoa
Year
-
51,113
19,725
15,718
39,468
15,606
36,423
8,015
35,559
8,565
17,895
4,662
38,821
3,213
-
22,676
21.4
8,908
49,322
49,990
35,469
57,053
53,046
54,334
24,393
87,663
23,908
83,942
21,514
94,443
32,425
66,784
49,546
46.8
4,534
27,123
9,814
7,234
23,428 2
11,903
20,340
12,909
18,983
16,405
14,179
10,700
26,042
6,209
26,625
15,762
14.9
3,883
42,522
13,167
20,614
24,163 2
20,003
27,614
8,838
33,012
9,650
23,980
9,236
34,640
11,038
29,911
20,818
19.7
17,325
170,080
92,696
79,035
144,112
100,558
138,711
54,155
175,217
58,528
139,996
46,112
193,946
52,885
123,320
108,028
100.0
Province
Imperia
Province
La Spezia
Province
Savona
Total Liguria
Region
Table 8
! Make forecasts, or predict the future data points of a time series in order to test
hypotheses or to model dependent relationships by means of linear regression
models.
! Measure the average pomace disposal costs paid by the mills or, in some cases, the
selling price for the recovery of the "small core", a pomace component used for
energy purposes.
! Define the seasonal character of pomace production and the availability periods,
even as a function of the treatment time necessary (if needed).
! Identify the benefits for the local entities which can join a pomace-energy production
chain and for the other stakeholders of the initiative.
OPPORTUNITIES AND THREATS ANALYSIS Sheet
! Identify the existence of technical (eg.:
provisioning difficulties), technological
(eg.: some low component reliability),
business (eg.: weak tendency towards the
consumption of alternative fuels),
prescriptive (eg.: restriction on using
pomace as fuel), cultural (eg.: feeble
sensitivity to the environmental topics)
threats or of other nature related to the
innovative use of pomace as fuel and
listed in a table of comparison with the
opportunities identified hereunder, as
exemplified in the following table.
528
Estimated virgin pomace quantity which
is available in the energy market
Virgin pomace production in the area x
Estimated total pomace production % value
which is available in theenergy market
(Tons per year) (Tons per year)
4. Technical sheets
Storage silo
! Identify the existence of technical (eg.: easy provisioning), technological (eg.: high
reliability of some components) business (eg.: strong inclination to use alternative
fuels), prescriptive (eg.: limits very favourable to use pomace as fuel), cultural
opportunities or other nature related to the innovative use of pomace as energy
vector and which can be listed in a comparison table with the previously identified
threats, as exemplified in the following table.
Table 9:
Example
29
+ Normative changes
+ Unpredictable weather conditions
affecting annual production of
pomace.
+ ...
Opportunities
+ Technology for pomace exploitation is
mature and is already being imple-
mented in
+ some scale
+ Possibility to gain green certificates for
renewable energy
+ Savings deriving from avoided waste
disposal procedures
Threats
4. Technical sheets
30
4.2 Sheets concerning Step 2 Current and foreseen demand analysis
CURRENT AND PROSPECTIVE DEMAND ANALYSIS Sheet
! As concerns the territories where the product is greatly widespread (extra-regional,
national, European, etc.), define the annual quantities of pomace required by the energy
market in the last period (in tons), supplying also the relevant historic trend.
! If, in the reference territory there is already a pomace market for energy purposes,
supply the data concerning the annual quantities (in tons) required by the market in the
latest period and the relevant historic trend.
! Estimate the foreseen demand of pomace for energy purposes, even in terms of annual
mean percentage variation. To this concern it is possible to make reference to the
provisional trend, above all in lack of market data, of other biomass typologies.
! Remark the seasonal character of the energy product exploitation, if any, finding
business absorption peaks.
! find and enumerate the potential customer typology to refer the consumption of pomace
as fuel - Public or private bodies (domestic or industrial entities).
! detect or estimate the plant number (heat generators) owned by the Public Bodies as
potential users of pomace/pellets/pits and identify their localisation as well as the areas
where there is the greatest concentration. It is necessary to underline how Public Bodies
have a strategic role in the livening up of an alternative energy market in case that this is
not yet in the mature phase.
4. Technical sheets
Olive pit separator
531
4. Technical sheets
4.3 Sheet concerning Step 3 Technology Analysis
TECHNOLOGY ANALYSIS
Supply information about the innovativeness and the efficiency level achieved by the
technology to be used for the use/transformation of pomace.
! Describe the working process articulating it in steps. It is necessary, for this purpose,
to make use of a graph representing the functional scheme.
! Point out the technical characteristics of the plants (if needed) transforming pomace
in an energy product (e.g. dried pomace, depitting) -describing their dimensioning,
main components, production capacities in tons per hour, energy consumption, the
absorbed electric and calorific power, etc.- and of the plants (boiler, CHP,
gasification) needed to produce final energy out of the pomace.
+ For cogeneration plants, assess the best technology for combined electric and
thermal energy production (gas or steam motor cycles) starting from virgin pomace
(implementing any gasification processes) on the basis of the needed power and
involved distances. The latter aspect, even for simple small-medium size biomass
heating plants (500kW-2MW) is essential in order to assess financial burdens related
to installing a completely new district heating network or upgrading an existing one.
In case the choice falls onto a pelletizing plant the final pellet fuelled plant is not so key
to the technical-economical analysis because the related costs are born by final users
and depend on their personal evaluations which do not affect the overall economic
plan of the supply chain. In this case it is only necessary to describe the pelletizing
facility and the produced pellet (e.g., if compliant with UNI/TS 11263:2007 norms).
DRIER
+
32
4. Technical sheets
! For each plant in the chain it is necessary to:
+ Identify the average purchase cost, yearly average operating cost, yearly
maintenance cost, as well as the life-span (in years) of the technology for treating
the pomace (if needed).
+ Identify the primary manufacturers and distributors on the market of the involved
technology.
+ When choosing the technology it is important to take into consideration whether it
has been sufficiently tested on the market, ensuring its reliability and verifying
whether the provider/distributor is able to carry out timely on-site maintenance and
that users' manuals are available in the user's language.
+ Prior estimates should also be made on costs for spare parts and maintenance.
+ Once the technology is identified, taking into consideration the raw material
quantities available and the final users location, identify the nr of energy plants and
their articulation (concentrated or distributed).
+ Lastly, it is also necessary to take into consideration the fact that the seasonal
nature of olive pomace production, typical of some areas, means that transfor-
mation operations are concentrated in a certain period of the year Thus, affecting
the size of the pomace drying/pelletising/CHP facility.
Pit fuelled stove
4.4 Sheet concerning Step 4 Project alternative identification
IDENTIFICATION of PROJECT ALTERNATIVES Sheet
! A segmentation of the potential demand in the reference territory is needed,
subdividing:
+ The market by customer typologies (data collected in the "Current and foreseen
demand analysis" sheet of Step 2), according to their relevant characteristics such
as, for example, nature (public bodies, companies, families), consumption level
(high, medium and low energy consumption levels or a more technically defined
articulation), purchase purposes (final user or business intermediaries treating
energy products), etc.;
+ The product available (eg. dried/depleted pomace) or which can be obtained by
the processes of transformation in alternative fuel (eg.: dried pomace, pellet, pit),
according to their characteristics such as, for example, easiness of use, stocking,
energy output, etc. .
! Creation of a segmentation matrix to show the demand obtained from the
combinations generated by crossing product and market characteristics. To this
concern it is possible to use the following indicative table.
Table 10
Example: segmentation matrix in Liguria
Production procedure to process pomace
Drying Drying and pelletization
Customer typology
Households (that use biomass to produce thermal energy)
Companies which do not need much energy
(that use biomass to produce thermal energy)Companies which use a lot of energy
(that use biomass to produce thermal/electric energy) Commercial agents
Public Bodies(that use biomass to produce thermal/electric energy 33
4. Technical sheets
! Among the delineated segments, identify the targets, i.e. those who can be subjects
of a business strategy.
! The choice of the target segments defines one or more possible technical-
managerial solutions: for each of them identify the reason leading to the choice of
that segment/s.
! For each management solution, identify the benefits by customer typology and, as
second step, for the other stakeholders concerned by the chosen strategy, as
exemplified in the following table.
Table 11
Example
4.5 Sheets concerning Step 5 Alternatives analysis and evaluation
PRODUCTION CHAIN MODEL Sheet
! Complying with the chosen technical-management solution, identify and describe the
private market operators needed to create the pomace-energy production chain.
! Define the relationships among the different stakeholders composing that production
chains (these descriptions can be better supported with the contribution of a diagram).
OLIVE MILLPROCESSING CENTRE
OF POMACECUSTOMERS PUBLIC
ADMINISTRAT.
34
4. Technical sheets
MONEY MONEY
VIRGIN POMACE
DRIED POMACE
Target customers Energetic
vector
Benefits Further
benefits
! Reduction of energy costs! Improvement of public
image! Reduction of energy
costs
! Reduction of energy costs! Improvement of public
image! Expansion of market
opportunities (increase in sales)! Improvement of the
corporate image
! Improvement of environmental quality (less emission of pollutants in the atmosphere) ! Improvement in the balance
of payments due to a reduced dependence on hydro-carbons! Research incentive! Development in the energy
sector and in the technology connected to it! New jobs
Public Authorities (that use biomass to produce thermal/electrical energy)Private users (of biomass to produce thermal/electrical energy)Companies (users of biomass for the production of thermal/electrical energySales agents
! Dried pomace! Pomace pellets
! Pomace pellets
OWNERSHIP STRUCTURE Sheet
! Identify the possible stakeholders participating in the ownership of pomace
use/transformation structure (in its whole or for single production steps:
transformation, energy plant, district heating plant, …), supplying their description
and the reasons for their participation.
! Indicate the best legal form which the new structure shall take, considering the nature
of the participating subjects and, in any case, complying with the different national
relevant laws (company law). The possible presence of public entities in the
ownership structure shall be greatly desirable if the initiative shows a high level of
innovation and return. In the case of ownership composed by one or more public
entities it is possible to create a consortium company structure, Non-profit companies
(owned for example by municipalities) without excluding in any case the adoption of
more typically private legal forms (for ex.: Limited Liability Companies or Joint-stock
Companies), more frequently used in the case of the exclusive presence of private
market operators belonging, in the specific case, to the olive oil or energy sectors.
! Define the shareholding of each subject.
35
4. Technical sheets
Pomace fuelled stove
ORGANISATION CHARACTERISTICS Sheet
! Describe the organisation structure which can be taken by the new business
venture, identifying the different company functions in which the company activities
are articulated, defining those carried out internally and those charged to third
parties, to this concern and as an example, use the following table to determine, for
each function, the related responsibilities.
! Define the company staff by detailing the roles necessary to the project imple-
mentation. Describe, for each single role, the tasks and responsibilities covered in
the project.
! It can be useful to supply a picture of the organisation structure by using an orga-
nisation chart.
! Remark that the seasonal nature of olive pomace, where it occurs, implies that the
company staff remains unused for a period. This problem can be faced by
differentiating the range of energy products, the company structure, using different
technology for example, to produce pellets, wood chips, … Another solution could be
the outsourcing of whole organisation processes, meaning that personnel can be
supplied by companies which are simultaneously active in different initiatives. In the
Italian context, for example, this outsourcing opportunity can be identified in the social
cooperative field, particularly inclined to the supply of specialised work service with a
limited duration.
36
4. Technical sheets
Strategic managementMarketingProductionSupply chain logisticsDistribution logisticsAdministration.............
Functional area Person in charge
Table 12
Example
AREA AND LOGISTIC ASPECTS Sheets
! Describe the logistic chain necessary for the industrial PROCESS to function, by
schematically representing it in a graph.
! Describe the plants location, by explaining the choice.
! Supply information concerning the main transportation road infrastructures in the
project area and their use.
! By means of a map, define the location of the supply centres as well as of the
customers' energy plants, defining maximum distance affordable by the company in
terms of distance from the project location.
! Show the distances (in km) and the times (in minutes) existing from the project
location to the virgin pomace collection point.
! Point out the virgin pomace loading and transportation costs from the collection to
the treatment centres (if any).
! Show the distances (in km) and the time period (in minutes) existing from the project
location to the different customer locations.
! Point out the unloading and transportation costs of virgin pomace from the treatment
to the customers' locations.
! Estimate the area surface (in sqm) necessary for the pomace treatment activity.
! Subdivide the area in functional spaces (eg.: stocking, plant, weighing, general
services, etc.) detailing the surfaces (in sqm).
! Consider that the seasonal factor of olive pomace production (if it occurs), and so,
the availability of a high amount of the product at a certain time of the year,
necessarily entails a greater stocking capacity with respect to a production without
seasonal effects. It arises, therefore, the necessity to face greater investment and
management costs with respect to other energy production typologies.
! In case of pomace use in heating plants, CHP plants or in other energy plants,
assess the availability of areas/buildings where to
install the plants and stock the raw material and the
related costs.
37
4. Technical sheets
16 MW power plant fuelled with depleted pomace(Province of Jaen, Spain)
ECONOMIC-FINANCIAL EVALUATION Sheet / VALUE ANALYSIS
! Define the assessment model inputs: Revenues, Operating and Investment Costs,
the latter divided into direct and indirect costs, as well as the considered time period
for the assessment (Year 1 - Year n), time representing the technology life duration. -
For each input category, introduce in a suitable table the values relevant to the most
significant years.
! For each production step (pellet production or pomace drying or pomace burning in
heating plants, or CHP plants or gasification) it will be necessary to estimate the related
investment (on which it will be possible to calculate the depreciation) in these terms:
+ pomace treatment plant cost (comprising drying plant and possible pelletising plant,
or depitting plant, warehouse and stocking areas for pomace and pellet) - this cost
will not be considered if dried/depleted pomace is already available on the market
+ Energy production plant cost (boiler, CHP, gasifier) with its civil works (areas or
buildings necessary to host the plant and stock the fuel) - in case the plant is
meant to substitute a fossil fuel plant, the cost to be considered is the difference
between the biomass plant and the fossil fuel plant - in case the project only
foresees pelletising, this cost is not to be considered.
!
38
4. Technical sheets
Final olive separation
! Operating costs are determined on the basis of the parameters that are listed in the
following table
Table 13
Operating costs
DescriptionUsed parameters Values
a) Virgin pomace
b) Logistics
c) Direct work
d) Unforeseen costse) Electric powerf) Plant maintenance
(pomace transformation plant)f) Plant maintenance
(energy production plant)
g) Depreciations
h) Rent
i) Indirect work
l) General costs
b1) Transport
for virgin pomace purchase
b2) Transport for
energetic vector
distribution (eg.: dried pomace)
Unit cost to buy per kgVirgin pomace in kg
Virgin pomace in Tons.Loading and unloading cost per Tons.
Transport cost per Tons./km
Mid-distance for the suppliesMax distance for the supplies
Fuel (eg.: dried pomace) in Tons.Loading/unloading cost per Tons.Transportation cost per Tons./km
Mid-distance for the distributionMax distance for the distributionc)
Daily costs
Working days in a yearEmployed for the management of the plant
Percentage of the direct costsFix pricePeriod Year 1÷x: percentage plant cost
Period Years x+1÷n: percentage plant costPeriod Year 1÷x: percentage plant cost
Period Years x+1÷n: percentage plant cost
Plant cost / years of useful lifeFurnishing and tools: cost / years of useful life
Expenditure of construction: cost / years of useful life
Covered surface in square metresRent cost in square metres
Daily costsWorking days in a yearEmployed for the management of the plant
Period years 1÷x: fixed pricePeriod years x+1÷n: fixed price
39
4. Technical sheets
40
4. Technical sheets
Table 14
! If the chosen production process foresees the distribution of dried pomace, pellet or pit
on the market, in case there is no available market price, it is necessary to calculate
the price by means of the "direct cost" methodology which implies the definition of an
operating revenue objective able to sustain the venture. The price so determined has
to be competitive with other fuels already available on the local market.
Operating costs (values in €)Description Total Year 1 Year 2 Year n
a) Virgin pomace
b) Logistic costs (transport for the supply of virgin pomace and distribution of the energy vector)c) Cost of direct work
d) Unforeseen costse) Direct production costs ( a÷d)
f) Electrical energy
g) Drying Plant maintenanceh) Energy plant maintenancei) Depreciationsl) Rent
m) Indirect work costn) General costs
o) Indirect costs ( f÷m)
p) Total operating cost (e+n)(*)
S
S
(*) cost related to dried pomace or pit in case they are sold on the market; otherwise, cost of the heat or of the electricity produced
and sold on the market
Revenues (values in €)
Description Total Year 1 Year 2 Year n
a) Biomass vector in kg (eg.: dried pomace)
b) Selling price per kgc) Revenues (a*b)
Investment costs (values in €)
Description Total Year 1 Year 2 Year n
a) Transformation plantb) Furnishing and tools
c) Price of building
d) Total investment cost ( a÷c)S
Table 15
Table 16
! Calculate the operational revenue using the table displayed hereunder and describe
its trend in the considered time period, pointing out the values relevant to the
particularly significant years (eg.: beginning of a stability period, strong increases or
decreases). The Operating revenue represents result of the new venture mana-
gement.
Table 17
! Calculate the Operating Cash Flow using the following table. The Operating Cash
Flow enables to verify or not the capacity of the initiative to self-finance itself through
the management of its activities and remunerate the invested capital. The table
displays the values relevant to the particularly significant years for the management
trend.
Table 18
! Relatively to the exploitation of alternative fuels, identify the investment and
management costs concerning the different boiler typologies, in order to determine,
inserting them in a suitable table, the NPV and IRR sustainability indicators, to join to
the Differential Cash Flow so as to obtain a better possibility of comparison among
the analysed fuels.
Net Operating revenue (values in €)
Description Total Year 1 Year 2 Year n
a) Net revenueb) Direct production costs
(fuel or energy)c) Contribution margin (a-b)
d) Indirect costs
e) Net Operating revenue (c-d)
Operating Cash Flow (values in €)
Description Total Year 1 Year 2 Year n
a) Net Operating income
b) Taxes on net Operating income
c) Depreciationsd) Cash-Flow (a-b+c)
e) Fixed Investmentsf) Operating Cash Flow (d-e)g) Cumulative Operating Cash Flow
41
4. Technical sheets
42
4. Technical sheets
Table 19
! Through the Operating Cash Flow carry out a synthesis evaluation of the initiative
sustainability through the calculation of the 2 indicators, the NPV (Net Production
Value) and the IRR (Inner Return Rate), displayed in the table 20 and in which the
obtained values are compared with those which can be defined as acceptance
thresholds (5% or WACC). As concerns the accepted value relevant to the IRR, it is
possible to use two values according to the different possibility of financing the project
initiative. 5% is a conventional value generally used when the financing sources are
totally public, while the WACC, i.e. Weighted Average Cost of Capital, is adopted when
the financing sources derive from private capitals (such as the owner's capital and/or
financial markets loans).
Differential cash flowDescription Total Year 1 Year 2 Year n
a) XXX (fossil fuel type)
boiler situationa.1) Cost of buying the boilera.2) Annual maintenance cost
a.3) Annual fuel costa.4) XXX boiler situation cash flow.
( a.1÷a.3)
b) Boiler situation with fuel deriving from the pomace (eg.: dried pomace)
b,1) Cost of buying boilerb.2) Annual maintenance costb.3) Annual fuel cost
b.4) Dried pomace situation cash flow ( b.1÷b.3)
c) Differential cash flow (b.4-a.4)
d) Cumulated differential cash flow
S
S
Olive trees in Jaen (Spain)
Table 20
! Elaborate the initiative financial statement by using the table displayed hereunder. It
represents the origins and destinations of the financial resources necessary to the
realisation of the project initiative and its management during the considered time
period. Input in the table the values concerning the years significant for the
management trend.
Table 21
! Elaborate the provisional profit and loss account of the new business venture
complying with the following table.
Table 22
43
Financial statement (values in €)
Description Total Year 1 Year 2 Year n
a) Net cash flowb) Financial charges
c) Reimbursement loans
d) Reimbursement equitye) Total outflows/inflows (a-b-c-d)
f) Equityg) Long term debth) Short term loans
i) Total source of financing (f+g+h)l) trend of Bank account balance
Profit and loss account (Values in €)
Description Total Year 1 Year 2 Year n
a) Net revenueb) Direct production cost
(fuel or energy)c) Contribution margin (a-b)d) Fixed costs
e) Net Operating income (c-d)f) Interest expense
g) Income before taxes (e-f)
h) Tax expensei) Net income (g-h)
4. Technical sheets
Indicator for project feasibility Obtained value Accepted value
NPV
IRR
> 0
5% o WACC
44
4. Technical sheets
ECONOMIC-FINANCING ASSESSMENT Sheet
BALANCE POINT ANALYSIS
! Calculate the value concerning the sales and the break even point, as well as the
relevant safety margin concerning some significant operations in the assessed time
period, as shown in the following table.
Table 23
Example
ECONOMIC-FINANCING ASSESSMENT Sheet
EFFECTS OF THE PUBLIC FINANCING
! Detect the institutional measures for financing support which it is possible to refer to
at the moment of assessment, supplying a description of their characteristics.
! Determine the main effects produced by the identified public financing lines and
delineate a synthesis framework through the comparison table n° 24 in which the
solution using public financing is compared to the one without that support.
Description Year x Year y
Estimated salesBreak even point of salesEstimated quantity of product
Break even point of productSafety margin
Pit heated poolin Carzola (Spain)
260,550.00 €216,300.00 €
1,178,931.00 kg
978,733.00 kg20.00%
260,550.00 €236,250.00 €
1,178,931.00 kg1,069,004.00 kg
10.00%
Table 24
ECONOMIC-FINANCIAL ASSESSMENT Sheet
THE COSTS FOR THE CUSTOMER
! Point out the investment costs which must be faced by the customer to use the new
energy fuel. A table could display the pomace boiler average power and the related
purchase value.
Table 25
Example
Considered project variables
a) Sources of financing a.1) Equity a.2) Long term loans
a.3) Capital grants a.4) Short term loansb) WACC
c) Feasibility indicators c.1) NPV
c.2) IRR
d) Investment costse) economic results at normality year
e.1) Revenues e.2) Operating costs e.3) Operating income
e.4) Net cash flowf) Pomace unit price
f.1) Period: Year 1- Year x
f.2) Period: Year x+1 - Year n
Hypothesis
without public financing
Comparison
Difference %Hypothesis
with public financing
Customer
Boiler fuelled
by dried pomace
(kW)
New boilerpurchase cost
(€)
Public Bodies
500
600
700
200,000.00
240,000.00
280,000.00
45
4. Technical sheets
46
Focus on: Best practices
BIOMASA PUENTE GENIL, Puente Genil (Córdoba)
! The biomass plant (figure below) generates electricity from olive pomace (orujillo) in
Córdoba, the technology used is the vapour cycle.
! The electrical power is 9.7 MW that is produced by means of steam turbine.
! The consumption of biomass is 71,000 tons/year.
47
DISTRICT HEATING ARNASCO, LIGURIA, ARNASCO (ITALY)
! DISTRICT HEATING ARNASCO is a small district heating system running with olive
pit separated at source by the local cooperative olive mill.
! The district heating is made of a pit fuelled high temperature 69.8 kW boiler and a 60
meters pipeline. 3
! Quantity of nut used each year is 14.3 tons to heat up 700 m (Church and annexed
building).
! Total cost of plant: € 9,500.
48
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Via XX Settembre 41 - 16121 Genova, Italy
T. +39 010 548 8730 - Fax +39 010 570 0490
e-mail: [email protected]
1st km Thermis-Triadiou, Gold centre n.9
57001 thermi, Greece
T. +30 2 310463930
e-mail: [email protected]
C/ Paseo de la Estación 10, 7°A - 23003
Jaén, Espana
T. +34 953 294750
e-mail: [email protected]
Karla Huguesa 8 - 52440 - Porec, Croatia
T. +385 52 408 332
e-mail: [email protected]
Garibaldijeva 1 6000 Koper, Slovenia
T. +38 6 5 663 77 13
e-mail: [email protected]
Via Garibaldi, 4 - 1° piano - 16124 Genova, Italy
T. +39 010 270 4251/296 - Fax +39 010 270 4296
e-mail: [email protected]
MORE - Market of Olive Residues
for Energy - is funded by the EU
Programme “Intelligent Energy
for Europa” (IEE)
The main objective of "M.O.R.E." is to generate renewable energy using solid residues
(pomace) deriving from olive oil production process. The project involves 5 European
countries (the main world olive oil producers): Italy, Spain, Greece, Croatia and Slovenia, by
means of six different local organizations that make up the partnership. In Italy, two partners
are involved: the project leader - Liguria regional agency for energy, ARE Liguria - and the
regional association of the four Ligurian Chambers of Commerce - Unioncamere Liguria.
In Croatia the partner is IPTPO, the Institute for Agriculture and Tourism
In Greece the partner is the Regional Agency for Energy of Central Macedonia
In Slovenia the partner is the Science and Research Centre in Koper
In Spain the partner is AGENER, the Agency for Energy Management of Jean province.
Running from November 2007 to April 2010, the project MORE aimed to:
! Identify different methodologies to generate renewable energy using solid olive residues
and produce related guidelines;
! Involve public and private stakeholders to develop the local markets and create supply
chains;
! Carry out training and promotional activities;
! Define business plans for energy facilities running on olive solid residues;
! Deliver policy recommendations for local, national, EU governments.
Full documents on: www.moreintelligentenergy.eu
The IEE Project "M.O.R.E.: MARKET of OLIVE RESIDUES for ENERGY"