Investment profile for 100.000 TPY plant.

  • Energy of pellets

    Pellets have 4.5 to 5 MWh per ton, or 18.5 - 20 GJ/tonne ton

    Wood is made up of Carbon, Nitrogen and Oxygen. It has a typical calorific value of 19.2 GJ/tonne dry matter. One tonne of wood fuel with a moisture content of 45% has a calorific value of 9.42 giga joules. Common forms of wood fuel are pellets, wood chip and firewood.To store the fuel for a wood chip boiler, one needs much more room than for storage of wood pellets. Wood chips will weigh ca 200-250 kg/ m3, wood pellets ca 650 kg/m3, pellets occupies 3 times less volume.

    1 Metric Ton (1000 Kg.) Wood Pellets = 444 litre of bunker oil (heavy oil)
    1 Giga Joule = 25.8 litre furnace oil
    1 Giga Joule = 24 litre bunker oil
    1000 Kg wood pellets = 18.5 Giga Joule
    1000 Kg wood pellets = 18.5 * 25.8 = 477 litre furnace oil
    1000 Kg. wood pellets = 18.5 * 24 = 444 litre bunker

    The typical house needs 14 m3 loose volume of wood chip, or 2200 kg of wood pellets, to replace 1000 litres of oil for heating and utilities. Typically made from sawdust from wood, a ton of pellets puts out approximately 20.4 gigajoules of energy. With a price of less than $5 a giga joule in the province, before manufacturing of pellets, including transportation, the pellets are a competitive alternative to natural gas.

  • Power stations

    The power plants in Europe will be the first clients of an industrial wood pellet plant, considering 100.000 TPY plant of 500.000 MWh of net energy if a efficience of 50% it can produce 250.000 MWh of energy, divided per 8760 hour year , can easely support a 28.5 Mwh power plant, for 31250 homes, for 8 MWh demand for each home, only in ne tenergy , without considering heat water.

    Total energy sold by power plant is 250.000 MWh of energy x 70 dollar per MW, it can be sold for 17.5 million dollars for power plants.

    The power plants will purchase pellets with CIF price at 135 per ton Euro ton for 100.000 tons, for 13.5 million Euros, and will sell energy per 70 euro MWh with corresponding to 17.5 million euros in revenues.

  • Carbon credits

    922,29 kg of CO2 per year for 8 MWh per home
    922,29 kg of CO2 x 31250 homes = 28818 tons of CO2 year x ( U$ 20,00/ton ) = U$ 576,393.00 in carbon credits

  • Investment

    • the investment in building will be $14 MM in 10 years
    • operational costs will be $6 MM year.
    • gross revenues $15.3 MM per year
    • profit margin will be $5 MM
    • cost of investment for $14 MM financed in 10 years with a discount rate of 12% = 14 million investment / 10 years * 1,12 = $1.56 MM per year
    • sales price FOB of pellets will be 153 dollars per ton; operational costs of pellets will be 100 dollars per ton
    • pay back of $14 MM will be in 2.78 years, and the (ROI) return of investment ( Gain from investment - cost of investment / cost of investment) will be 221%
    • NPV - Net Present Value of project after 10 year will be $31 MM
    • IRR - Internal rate of return 43%

    We have also considered a business growth rate of 10% per year, on revenues priced at $153 per ton. Pellet will be sold for the lowest price in 5 years for 105 Euros FOB, which represents less than half of pellet prices today, the pellet price today costs 250 to 350 dollars per ton for the end user.

    The project is also very attractive considering that Europe will substitute 20% its of fossil fuels for renewable energy until 2020.