Techno-economic feasibility study of a biomass-fired power plant in Tucuruí, Brazil

Abstract

In the Brazilian Amazon there is an untapped potential to recover energy from wood residues generated at the local sawmills. This paper analyses the techno-economic viability of implementing a 70 MWe power plant fired with the wood residues generated in the sawmills located in the region of the Tucuruí hydropower complex. The traditional discounted cash flow method was applied and the discounted payback and internal rate of return determined. Six different scenarios were analyzed to determine the influence of the percentage of financing that is debt, grace period and depreciation. When considering depreciation, the most attractive scenario is the one where the capital costs are totally covered by a bank loan. In this case, the discounted payback is 7.5 years and the internal rate of return 16%. The latter is higher than the inflation and interest rates, showing that investing in a biomass-fired power plant in Tucuruí is attractive.