Due Diligence Contract for Proposed Chinese Biogas Project Awarded
Mar 17 2010
SLR Consulting (UK), one of the fastest growing environmental consultancies in the UK, has undertaken due diligence for a proposed biogas project in Guangxi Province, China.
The company was asked to carry out the work by Société de Promotion et de Participation pour la Coopération Economique (PROPARCO), a finance development institution whose main shareholder is Agence Française de Développement (AFD), the French government-owned development financial institution that is part of France’s foreign aid.
PROPARCO is joint funding a project developed by Bioqi (a Chinese registered company) to develop, build and operate a new anaerobic biodigester using the high COD (chemical oxygen demand) waste water from an adjacent sugarcane, molasses and ethanol production plant. Bioqui is owned by OneCarbon, a Dutch based international carbon trading business that initiates, develops and finances carbon reduction projects.
The novel design of the proposed biodigester uses a geomembrane lined and covered lagoon, rather than a conventional tank-based digester as used in Europe.
SLR process engineering principal Dr Peter McKendry, who travelled to China to carry out the due diligence work said: “The reason for using a lagoon is the high volume of waste water produced – 3,700m3 a day – which would be too costly to build as a conventional steel tank system.
“The plant’s operation is tied to the production of sugar and ethanol, which only has a six to seven month season from November to June so the higher capital cost of a tank system for this short operational period would have had an adverse financial impact on the project.”
In addition to the standard technical aspects, the scope of work carried out by SLR included benchmarking the project against similar facilities; reviewing the technical capacity and qualification of construction contractors and confirming the investment and operating budgeted costs.
“The digester will produce a methane-rich biogas to be burned in the boilers of the waste water supplier, Siyuan Ethanol Co,” added Peter.
“At present it is left untreated in a series of open lagoons and the high COD effluent generates methane, a potent greenhouse gas.
“The project will gain revenue from the sale of both biogas to Siyuan and verified emissions reduction (VERs) credits to the carbon market.
“Such lagoon systems are widely used in the tropics to treat high COD waste water and effluents from the production of products such as ethanol, starch and palm oil. The process is a good example of resource efficiency, where the waste from sugar production – molasses – is used as the feedstock for ethanol production, which produces the high COD waste water.
“In turn the high COD waste water is converted into biogas, which is used in the boiler plant to produce steam for sugar and ethanol production, replacing low grade polluting coal.”
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