“Commercialization possibilities of Small scale biomass powerplant in Japan”

Abstract: After the great east earthquake in 2011, Japan has been under strong pressure for a restructuring of the energy supply structure. The Fukushima nuclear power plant accident, caused by an earthquake triggered giant tsunami, brought force to the shutdown of almost all nuclear plants in Japan and a national discussion on future energy structure arose. In 2012, a revised feed-in tariff was enforced, and Japanese energy policy has changed its direction to promote the introduction of renewables. Against the background, the aim of the thesis is to do a feasibility study of small-scale biomass power plant in Japan.Small scale biomass plants are expected to play an important role in the future expansion of distributed generation. It has been developed with its great advantages over other renewable resources for power generation such as high stability of power generation and high total energy conversion efficiency with CHP or tri-generation technology. In 2015, the Japanese government increased the purchase price of electricity from wood chip fueled small scale (< 2 000 kW) biomass power plants to 40JPY/kWh (0.29Euro) to promote implementation of small scale biomass plant.In this study, three electricity generating technologies were chosen as promising options: Steam cycle, ORC (Organic Rankine Cycle) and gasification connected to an internal combustion engine.NPV and IRR method were used to evaluate the feasibility of projects with the technologies, and it is found that none of the projects can be feasible in power only generation mode even under the high FIT price in Japan. In CHP mode, all technologies are feasible in specific ranges. Steam cycle plant is feasible in 1000 kW or larger plant and NPV reaches around 983 million JPY in 2000 kW plant. IRR is 12.4 % in the plant, but the steam cycle plant is susceptible to input parameters change especially fuel cost and the selling price of heat. As the values can fluctuate over the plant operation period, it poses a great risk to the project. ORC plant is also feasible in 1000 kW or larger plant, and NPV reaches 1,592 million JPY in 2000 kW plant. The IRR of the plant is 13.2 %, and it is the best values among the plants examined in this study. ORC plant is relatively insusceptible to parameter changes, but changes in fuel cost, capacity factor, and capital cost still has a measurable impact on the project’s feasibility. Gasification plant is feasible in all capacity ranges, and it is relatively competitive in smaller than 1000 kW plants. In 360 kW plant, NPV is around 43.6 million JPY and IRR is 6.5 %. In gasification, capacity factor is the critical factor which has the largest impact on the feasibility of the project.