Biomass power generation is an attractive option for the Mauritian island grid because it offers dispatchable generation, uses agricultural waste as fuel, and has lower emissions than fossil fuel technologies. The climate rationale to transition the Omnicane Independent Power Producer (IPP) to 100% biomass is even stronger because it will displace CO2-intensive coal generation with local or imported biomass generation.

Despite its benefits, biomass power generation projects are risky and could be unpopular. One of the main risks is feedstock supply. Biomass supply can present significant seasonal variations, which, combined with storage limitations, can lead to significant supply-demand imbalances. Biomass can also have significant year-to-year supply variations due to variability in yield from biomass harvesting operations or reductions in cultivated land. Furthermore, biomass projects can be controversial and elicit local criticism.

IFC is aware of these types of risks and concerns about biomass and the Omnicane project and wants to commission this high-level study to analyze the financial, economic, and climate implications of transitioning the Omnicane IPP to 100% biomass. The results of the study should show, with data and objective analysis, if this transition is a better economic and climate choice than continuing with the current biomass-coal operation or developing another technology that is dispatchable and has low carbon emissions.

The K&M team will estimate the levelized cost of electricity (LCOE) for the Omnicane power plant when burning biomass (sugar cane bagasse) and coal, as well as only biomass. In addition, K&M will seek to understand the biomass supply chain risks and mitigation options. K&M will then identify a shortlist of realistic dispatchable alternatives to the 100% biomass Omnicane IPP and to develop an estimate of the LCOE of these alternatives. To complete this work, K&M will develop an LCOE model to estimate the LCOE and CO2 emissions cost of all generation possibilities, including:

• Existing plant – bagasse + coal
• 100% biomass plant – local bagasse
• 100% biomass plant – imported biomass
• 100% biomass plant – mix of local bagasse and imported biomass
• Each of the alternative options identified and analyzed

In addition to these scenarios, K&M will run sensitivities on the power plant’s capacity factor, including 55%, 70%, and 90%.

K&M served as technical and financial consultant to the US Department of Energy (DOE) and the US Agency for International Development (USAID) on privatization opportunities, alternative energy sources, and diversification of the sugar industries in Mauritius, Swaziland, Zambia, and Zimbabwe. K&M evaluated the technical and economic feasibility of diversifying sugarcane industry operations with emphasis on the production of fuel alcohol and electricity. Particular attention was given to prospects for the introduction of US developed technologies and services in cane energy-related areas, especially for projects that were already in the planning stages (issues addressed: co-generation systems, project finance and development). K&M prepared a report on the highlights and findings of this mission which included recommendations for future action and identifications of project specific opportunities for potential involvement of the US private sector.

K&M was selected by the Government of Mauritius (GOM), represented by the Ministry of Public Utilities (MPU) and Central Electricity Board, to conduct a USTDA-funded feasibility and market study for a proposed greenfield 100 MW thermal power plant, the country’s first private power project to be developed and implemented as an IPP on a Build-Own-Operate (BOO) basis. K&M evaluated the technical, commercial and financial components of the project, assisted in selection of the project site, appropriate technology, optimal size, fuel source and associated transmission requirements. K&M evaluated three technologies (combined cycle with residual fuel oil, diesel engines with residual fuel oil, and a coal-fired Rankine steam cycle plant). Coal and residual fuel oil were selected as the best candidate fuels. K&M developed a financial model for each plant configurations based on each technology. Also addressed were the technical, economic, environmental and financial issues involved in structuring the project. K&M performed a Preliminary Environmental Impact Assessment as part of the assignment. K&M also developed project cost estimates and investigated financing options.