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 Karachi Electric Supply Company biogas energy project 

BR Research met Evan Chrapko, CEO of Highmark Renewables and Omer Ghaznavi, General Manager Corporate Strategy & Business Development at KESC to discuss about the upcoming renewable power project base primarily on animal waste. Following are the edited transcripts of the conversation BR Research: How did the biogas idea come up in presence of the more fashionable renewable soures such as wind and solar energy?

Evan Chrapko & Omer Ghaznavi: We started the work on this project about 18 months ago. Initially the focus was on wind power, solar power and the regular stuff that we keep hearing about. But the problem with wind and solar was that the pricing was too high. There were a lot of technology issues, everything had to be imported, it was not proving to be economical enough for us for a variety of reasons.

The idea was to bring the prices down in the future instead of going up all the time. We started looking around for options and one project that we came across was the Landhi bio gas project. The project we have taken is the biggest in the world and dealing with 3000 tons of waste a day to produce 25 MW. To handle that, you need to know what you are doing and need to be able to prove that the thing will work because it is a matter of $60-70 million of investment.

BRR: What advantages does biogas energy have over more conventional sources and what expertise does Highmark offer? EC & OG: We spoke to a lot of German and North Americans firms in the beginning but most of them were hesitant to work in Pakistan back then. Then we heard about Highmark and a couple of projects that they were doing. We contacted them and started searching for different sites. Landhi was the best option as it is very concentrated and generates a lot of waste.

The waste which is dumped into the open sea has huge impact on the environment. The concept was to move to a more sustainable process without much dependency on imported material and equipment at a much lower price. The beauty of the model is that the majority of the equipment can be sourced locally, reducing the import dependency.

While the line work, layout and the engineering will be done remotely by Highmark, the implementation on the ground will be done by the local contractor. We have our options open for equipment, we can either source it locally or import it from US or Far East, whatever suits us.

We have now brought in a testing container to get an idea of what kind of and how much gas can be produced. We have three months of testing going on, after which we will work on design. At the same time, we are working on the financial close, the investors have shown interest but we obviously need the data to support the case.

We are hoping to reach the financial close by the end of the year. For financing, we are talking to a lot of international financing institutions like ADB. IFC etc. Local financing is a bit dicey and it makes almost impossible to look for that.

BRR: Is biogas energy any friendlier to the environment than the other renewable sources?

EC & OG: The good thing about the project is that other than producing power that will be environmental friendly we will also be producing 400 tons of organic fertiliser, which is only slightly smaller than Fatima Fertiliser.

It will not be a direct substitute to urea but will be a complimentary product. While urea is suitable for extracting more growth, this organic fertiliser would be used on eroded soil which has lost its utility and where urea won't be effective.

And Pakistan faces that soil problem a lot, so there is a market for organic fertiliser to be tapped. That is why we are hoping to talk to the likes of Fatima, Engro or the Faujis and let them deal with the fertiliser side of things.

There is no point KESC trying to become a fertiliser firm. The core thing that attracted towards Highmark was their capability to utilise all kind of waste like animal waste, metro waste etc.

BRR: Are there other sites in Karachi from where the raw material can be sourced?

EC& OG: Yes there are a few places near Sohrab Goth - but they won't be as big as Landhi. Landhis's advantage is its concentration and huge amount of waste which is why it is getting international attention.

The current largest project comparable in the world is 8-9 MW. So this project is going to be the largest in the world by a mile. We have a lot of interest on how much could be done socially and on humanitarian grounds. This is a high quality product and very sustainable and reliable in comparison to wind or solar which is very vulnerable and fluctuates highly.

This is energy plus fuel - so we are cleaning up the by-product in a way that allows the environment to stay clean. We are working with KESC because we see the strategic leadership and vision there - they are very serious and ken about the project which is why we are moving ahead swiftly.

All the solar and wind projects do generate electricity but the social and environmental aspect is largely ignored. It is not that we are doing some rocket science work - it is a combination of some very old and some relatively new laboratory technology and this combines in a unique way to get something that is very reliable.

BRR: Will it be local people working on the project or will it be a mix of foreigners and local both?

EC & OG: All construction, operation, everything will be locally done. The only thing that comes from Highmark is the design.

The idea behind it is not to deal with the load shedding issue with this project - it is to bring about a change in the local community over there. We will be working with our CSR team towards providing health and education services to the local community.

The biggest thing is that you need to collect 3000 tons of we waste from the sites every day, we will be picking waste form restaurants and even from the Sabzi Mandi - but the biggest chunk (95 percent) will be the animal waste and we will be mixing it altogether.

Our technology is unique that it will accept all kinds of organic waste. We have put in a lot of research to get to this technology as the waste here is not 'clean' and contains lots of impurities.

BRR: Will the electricity produced be attached to the national grid or will it be for Landhi only?

EC & OG: We will identify industrial users in Landhi, Korangi and nearby areas. We will try not to throw it on the grid in order to avoid line losses etc. The tariff for biogas is already set by Nepra at 8.5 cents per unit, which we hope will be feasible enough.

We do not want to be dependent on government doling out money - we plan to subsidise it form carbon credits and sale of fertilisers.

BRR: What is the project's estimated cost? Are there any plans to expand?

EC & OG: The project's estimated cost is $65-70 million. This is a KESC project but we don't want it to be confined to KESC only - we want the bigger players to come in and share. If we can show it successfully in Karachi - then it can work elsewhere in Pakistan too.

It may not resolve your 5000 MW shortage - but t it will get power to the remote areas and provide cleaner energy. And will also provide bio fertilisers which are very good for the farmland. It is certainly better than using raw manure.

KESC can only do Karachi but that is why we don't want to do it solely on our own, we want other partners to work with us. We are hoping that in the next decade we have three or four such facilities in Karachi as there are other waste sites in the city - where human or metropolitan waste could be used.

We have great incentives on renewable energy - there are no taxes - repatriation of money is easy. We are hoping to start generating electricity by 2013 - fingers crossed.

Source: http://www.brecorder.com/articles-a-letters/single/626/0/1192816/?date=2011-05-26


Anonymous said...

A Salam
my name is ali asghar hussain. i m in doing bio engineering from ned university. this is my favorite topic, fuel and energy especially bio gas and bio fuels..
i m feeling very glad to read this.
i also need to work such places.
Best of luck.
contact: a_dawoodi@hotmail.com, cell no : 03323100896

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