UN report looks at biofuel potential in Guyana - total energy independence possible

The UN's Economic Commission for Latin America and the Caribbean (ECLAC) in collaboration with Italy's agency for development aid (Cooperazione Italiana) has made a basic case study of the bioenergy and biofuels potential in Guyana. The results [*.pdf] are not surprising: the small South American nation can produce biofuels competitively, on a large scale, totally end its (very heavy) dependence on imported oil, and create a considerable number of jobs by investing in sustainable biofuel production. Guyana can replace all its fossil fuels in all industrial sectors, and have capacity to spare, by utilising biomass residues alone (no new land required).

Liquid biofuels: sustainable and competitive
Guyana's 750,000 inhabitants depend on imported fuel to meet the needs of the transport sector. In 2005 alone, fuel import bills accounted for not less than 29% or US$220 million of the value of total imports of the country (graph, click to enlarge). Gasoline imports alone were equivalent to 8.6% of Guyana's GDP. In short, the country's economy is highly dependent on imported oil products and fossil fuel prices.

According to the report's most conservative scenario, Guyana's thriving agricultural industry can produce 30.8 million liters of ethanol per year from secondary molasses. This would be nearly 3 times the anticipated demand of 11.5 million liters, if a mixture of 10% ethanol were to be used in the country's vehicles. If other starchy and sugar raw materials (like sugarcane juice or primary molasses) are considered, the availeble potential would increase proportionally.

The cost per liter of ethanol would be quite competitive with imported energy. In 2005, the export price of secondary molasses was US$ 83 per ton. From each ton of molasses some 260 liters of ethanol can be obtained. This implies an estimated opportunity cost of US$0.392/liter. Ethanol from molasses has been price competitive with gasoline in the past few years, even without consideration of positive externalities associated with it (jobs, security, energy independence, price stability).

The report's author, Luiz Augusta Horta, found that one prototypical ethanol plant with a capacity of 65,000 liters/day, can replace 10% of Guyana's gasoline demand, would require an investment of around US$6.5 million, and would result in annual savings of US$ 5.4 million on the energy import bill:
bioenergy :: biofuels :: energy :: sustainability :: sugarcane :: ethanol :: biodiesel :: biomass :: energy independence :: Guyana ::

Added advantages are the fact that a local biofuels industry would diversify existing agricultural sectors, opening new opportunities for farmers, introduce a new technology and research sector, with new employment opportunities for both low skilled and highly professional workers, and reduce the risks currently faced by the country's sugarcane industry (which is heavily dependent on the EU's sugar regime - Guyana enjoys preferential treatment but will be affected by the Union's sugar reform).

Horta says moreover, the use of ethanol as a source of energy would have significant environmental advantages, and cut carbon dioxide emissions considerably. "All together, these conditions make a decidedly sufficient and robust case to promote the use of ethanol for energy security in Guyana."


Solid biofuels for cogeneration
The report further analyses the potential for the use of solid biomass in cogeneration plants. Both field and processing residues from rice are available in abundance. Rice cultivation in Guyana, which occupies approximately 130,000 hectares of land, produced an estimated crop of 501,500 tons in 2004. In the same year, exports stood at 357,900 tons, accounting for over 70% of total production and inflows of approximately US$54.5 million.

Rice processing plants produce an average of 0.22 kilograms of cellulosic biomass waste per kilogram of husked rice. A total of around 110,300 tons of such residues (mainly husks) would be availabe each year. Assuming the energy content of these wastes is 13.8MJ/kg, the reserves may be estimated at 36,400 tons of oil equivalent, or 11% of Guyana's diesel use in power plants.

As regards the bioenergy potential of Guyana's sawmills, whose total timber production in 2005 was approximately 1,347,000 cubic meters, the average density being around 600kg/cubic meter and waste production (sawdust, wood shavings, etc) was estimated, conservatively at 200kg/cubic meter. Estimating the heating value of this resource to be around 13.8MJ/kg, the result was an impressive figure of 1.55 million tons of oil equivalent, almost 3 times as much as the Guyana's diesel demand used in the production of electricity.

These lignocellulosic wastes will be used for electricity production in cogeneration plants. One of the main groups active in Guyana's forestry sector is already tapping the opportunity by setting up a 3MW plant using available waste from its mills.

UN recommends urgent implementation of ethanol strategy
The report on the biofuel potential in Guyana was welcomed by the country's decision makers and by representatives of the agricultural sector. Prime Minister Sam Hinds told reporters that ECLAC has recommended that Guyana invest in a prototypical ethanol plant (65,000 liters/day) in the short term and that the country should consider mandating a 10% ethanol blend at once. Such a prototypical plant ethanol plant "is certainly an interesting opportunity, with a payback period of less than 18 months, an encouraging indicator for energy investment."


Meanwhile, Hinds said that some four foreign companies are interested in investing in the industry including BioCapital from Brazil and the US firm Global Energy Ventures. The increasing number of vehicles in the country is an indication of its growing motorisation and the increasing demand for fuel with obvious implications for the economy in terms of a larger fuel bill.

Asked whether the recommendations were being considered, Hinds said the government was looking at all the proposals related to ethanol production at this stage and though policy decisions have been taken decisions on the implementation are being considered.

Hinds said the current thinking is that planting of crops for biofuels should be on lands currently available for sugar cane or soya bean or abandoned cattle-grazing grounds; natural forests should not be felled to accommodate cultivation of crops for biofuels; and arable lands should not be made available for biofuels to the detriment of food security.

In Guyana, he said, consideration is being given for cane cultivation in the intermediate savannahs, which would be environmentally friendly and economically feasible.

With surplus sugar and the fact that it has been cultivated in the country for centuries with one of the highest production/demand ratio and with the use of bagasse, the report said that the industrial processes could be self-sufficient and even generate a surplus.

At present, some 50,000 hectares of lands are under sugarcane cultivation, providing some 3.5 million tonnes, processed in 9 mills (map, click to enlarge). Based on this, the report said, "It must be understood that the production of ethanol fuel should not be restricted to an initial, tentative approach, since the potential already exists in the country."

The sugarcane industry of Guyana is one of the most important economic activities of the country and a main source of foreign exchange exporting 60% of its sugar to Europe. It is, however, subject to significant market risks, associated with changes in the Sugar Protocol and the reduction of preferential prices on the European market, which it enjoyed in the past. To deal with the price reduction, the Guyana Sugar Corporation proposes to expand sugar production by 50%, increase the production of refined sugar, introduce the production of ethanol fuel and increase electricity generation from bagasse.

Apart from the economic benefits, those who welcomed the report noted that ethanol production in the sugarcane industry would cater for job creation, mechanisation and electric power cogeneration.

The promotion of ethanol as a source of fuel in Guyana requires the collaboration of all institutions and stakeholders arriving at an operational mechanism for the introduction of ethanol within the energy sector. This requires clear timelines and commitments. It should also include a component for building public awareness as well as involvement of the local science and technology community.

In terms of greenhouse gases it has been determined that for conventional technologies, every litre of anhydrous ethanol in the gasoline blend results in an average reduction in emissions of 0.42 kg of CO2 (Carbon Dioxide) equivalent.

More information:
UN Economic Commission for Latin America and the Caribbean: Louiz Augusta Horta: Biofuels Potential in Guyana [*.pdf or abstract] - February 2007.
Stabroek News: Molasses to ethanol could yield huge energy savings - April 22, 2007