ENERGY AND ENVIRONMENT PARTNERSHIP WITH CENTRAL AMERICA

CENTRAL AMERICAN BIOPOWER PROJECT

STAGE I

PROJECT REPORT

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TABLE OF CONTENTS 1. GENERAL...................................................................................................................................................................3 2. PROJECT IDENTIFICATION........................................................................................................................4 3. PRELIMINARY STUDY......................................................................................................................................5

3.1 COUNTRY STUDIES.................................................................................................................................5 3.1.1 Nicaragua .......................................................................................................................................................5 3.1.2 Honduras ....................................................................................................................................................11 3.1.3 Guatemala................................................................................................................................................... 17

3.2 SITE VISITS..................................................................................................................................................20 3.2.1 Nicaragua ....................................................................................................................................................20 3.2.2 Honduras ....................................................................................................................................................21 3.2.3 Guatemala................................................................................................................................................... 22

3.3 PRELIMINARY FEASIBILITY STUDIES................................................................................... 26 3.3.1 Honduras ....................................................................................................................................................26 3.3.2 Guatemala................................................................................................................................................... 30

3.4 CO2 REDUCTION POTENTIAL .....................................................................................................34 3.4.1 CDM opportunities in Honduras.....................................................................................................35 3.4.2 CDM opportunities in Guatemala................................................................................................... 37

4. CONCLUSIONS AND FUTURE ACTIONS........................................................................................41 ANNEX 1............................................................................................................................................................................. 43 ANNEX 2............................................................................................................................................................................. 45 ANNEX 3............................................................................................................................................................................. 46 ANNEX 4............................................................................................................................................................................. 48

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ENERGY AND ENVIRONMENT PARTNERSHIP WITH

CENTRAL AMERICA

CENTRAL AMERICAN BIOPOWER PROJECT STAGE I

PROJECT REPORT

1. GENERAL The goal of the Central American Biopower Project is to promote rational use of biomass and demonstrate the feasibility of small-scale biomass-fired power plant through a commercial demonstration project based on a suitable technical concept provided by Wärtsilä Biopower (BioPower 5 or BioPower 2). The project is divided in two stages: I Stage: 1. Project Identification 2. Preliminary Study II Stage: 3. Project Development 4. Plant Construction 5. Plant Operation This project report concerns the I stage covering the project identification work and preliminary studies of the most feasible sites. The focus is to find out the most suitable sites for biopower project especially in Honduras, Guatemala and Nicaragua. The availability of wood based biomass is one the most essential decisive factor for site selection. The initial project plan is indicated in Annex 1. The project group consists of four Finnish companies: Gaia Group Oy, Green Stream Network, Wärtsilä Finland Oy Biopower and Pohjolan Voima Oy. In addition the project is carried out in a close cooperation with relevant local organisations and authorities. It is agreed between the project partners that Gaia Group Oy is the team leader for the Stage I. The Central American Biopower Project I Stage was approved during the Second Steering Committee meeting in Panama on 19th of June 2003. About 75 % of the total cost of the project’s I stage is financed by the Partnership.

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2. PROJECT IDENTIFICATION Identification of feasible sites was firstly based on desk study which included the contacts to members of Steering Committee and representatives of respective Ministries of Environment in Central America. More detailed discussions with the members of Steering Committee related to the potential biopower projects and sites were carried out during they visit in Finland in September 2003. The program included the reference visit to a biopower plant (Puulaakson Energia) in Karstula and the Bioenergy 2003 Seminar in Jyväskylä 2-4 September 2003. In addition several contacts have been taken to local organisations and authorities in respective Central-American countries including for example Manejo Forestal y Bioenergía (PROLEÑA), Cluster Forestal (Mr. Axel M. Gómez), INAB (especially Procafor contacts), Biomass Users Network (BUNCA), Tropical Agriculture Research and Higher Education Center (CATIE), Corporacion Hondurena de Desarrollo Forestal (COHDEFOR), Agenda Forestal Hondureña, Fundación Hondureña de Investigación Agrícola, Asociación Hondureña de Pequeños Productores de Energía Renovable (AHPPER), Asociación de Madereros de Honduras, Asociación Nacional de Transformadores de Madera in Honduras, Centro de Utilización y Promoción de Productos Forestales (CUPROFOR), Mr. Rodolfo Santizo, Guatemala, Mr. Mario Vallejo etc. The discussions with Mr. Juha Kiuru on 1st of October 2003, who has been working in PROCAFOR project in Guatemala, gave a good picture about the situation in Guatemala related to forestry, plantations, saw mills and manufactures of the forest products. According to the collected information, desk study and the help of local organisations the site visits on the potential sites were carried out between 18-30 October 2003. PROLEÑA (Mr. Serafin) was the organiser of the visits in Nicaragua and Honduras and Cluster Forestal (Mr. Axel M. Gómez) coordinated the visits in Guatemala.

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3. PRELIMINARY STUDY 3.1 COUNTRY STUDIES

3.1.1 Nicaragua1 Major zones for wood logs supply According to the INAFOR/MAGFOR 2002 statistical report for year 2000 the 2 majo r zones for wood supply from natural forest are Atlantic Coast region (RAAN, RAAS), and Nueva Segovia region (Esteli, Madriz, Nueva Segovia). The first one supply is basically broadleaf tropical wood while the second one is basically pine wood. As we can see on table 1 some 72 small sawmills were operating in Nicaragua countrywide. The average processed wood in year 2000 was 1,103 cubic meter per day of round-wood around 60% of total installed capacity. Most of the sawmills were stationary but some 17 ones were portable sawmills operating mainly in the Atlantic Coast region. Table 1. Wood supply from natural forest in Nicaragua, year 2000

Region Nominal capacity m3/day

Real capacity m3/day

Lost capacity

(%)

Number of sawmills

Chinandega 20.00 10.44 47.81 2 Chontales 12.00 7.08 41.04 1 Esteli 268.00 80.45 69.98 7 Granada 20.00 16.00 20.00 2 Jinotega 08.00 7.00 0 1 León 12.00 6.23 48.11 1 Madriz 45.00 30.19 32.91 2 Managua 91.00 57.73 36.56 10 Masaya 80.00 46.40 42.00 6 Matagalpa 62.00 38.21 38.37 4 Nueva Segovia 646.00 360.92 44.13 17 Río San Juan 53.00 33.43 36.92 2 Rivas 13.00 12.50 3.85 1 RAAN 447.00 352.80 21.07 11 RAAS 83.00 44.42 46.49 5 Total 1,860.00 1,103.78 40.66 72

Source: INAFOR/MAGFOR Statistical report 2000 During the period 2000-2003 lumber production was decline at the national level, due to many changes at the institutional framework2 and due to changes in the forest policies and regulations 1 Basic Information Concerning Biomass Availability in Sawmills and Electricity Market features from Nicaragua and Honduras, report carried out for Central American Biopower Project in 2003 by Proleña 2 The National Forest Institute INAFOR has been changed of head Director four times at least during the last three years (Alvaro Montalvan, Sandra Tijerino, FranciscoGuerra, Indalesio Rodriguez)

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derived from it. In despite of the fact that available wood from pine forest attached by the Dendroctonus disease3, in Nueva Segovia region, lumber production has been decline from 150,000 m3 in 2000 to some 70,000 m3 in 2003. In Nueva Segovia region sawmills are dropped in 120 km long road from Esteli town to Jalapa town. Round wood supply system for sawmills in Nueva Segovia region is not clear well defined, but much of industries do not have a forest concession zone to long term wood supply. Open market for round wood supply is normally functioning, were industries are buying standing tree from forest owners under management plan approved by INAFOR or from small farmers that usually change of use its land. Prices for standing tree could be roughly US$ 5-10/ m3. Sawmills performance in Nueva Segovia region4 Nueva Segovia region has some 43 small sawmills operating and based on pinewood. More than 65 % of pine wood is Pinus oocarpa followed by Pinus caribaea. Some of the sawmills are ancient with circular head saw, and most of the lumber production is for lumber exports to Honduras, El Salvador y Caribe, dried on air conditions. Only one of the sawmills has its own dry kiln (Pinotea). According to Proleña study for Ocotal Power generation 20005, sawmill are working near to 50% as its factor conversion round wood- lumber or Lumber recovery factor LRF. The major conversion factor 70% was obtained by MADESA company, while the lower conversion factor was for CECOFOR with a circular main saw. However the total average factor conversion in lumber for 7 sawmills was 55,9 %, see the figure 1. Saw milling process for lumber production is linearly and simple, frequently dominated by the primary breakdown were final products are: lumber, slabs and edges. Some of the sawmills were processing slabs in a secondary breakdown to produce palillos and small pieces of wood. However MADESA has the only sawmill were equipment has been arranged for primary and secondary breakdown.

3 A kind of Dendroctonus frontalis (Choleoptera scolitidae) disease reported in Central America region from Belize t o Nicaragua, named as a Gorgojo disease. 4 Basic Information Concerning Biomass Availability in Sawmills and Electricity Market features from Nicaragua and Honduras, report carried out for Central American Biopower Project in 2003 by Proleña 5 PROLENA has been developed two studies 1999, 2000, concerning the potential for power generation in the Nueva Segovia region.

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Figure 1. Lumber recovery Factor from round wood in Nueva Segovia

0

0 . 1

0 . 2

0 . 3

0 . 4

0 . 5

0 . 6

0 . 7

0 . 8

MADESA S t aEmi l i a

Pino tea Pasmat a ENMASA Cecofor Emani c s a

Ef

%

The lowest is the conversion factor for lumber LRF, highest would be the availability of wood waste in the industry, like sawdust, cut-off and some slabs with bark. Only a small proportion of wood is processed for any other wood product, like palillos, tampa, Nasa, as we can see in the Honduran sawmills. Available sawmill wood waste in Nueva Segovia region6 In despite of the fact that attacked pine forest was felled and harvested in around 25,000 ha and the diseased wood logs were available, during the last three years lumber production was decline in the region. Consequently, sawmill waste from Nueva Segovia region was diminished more than 50%, specialty for sawdust. Table 2. Available wood waste in sawmills from Nueva Segovia region

Type of waste

Features Ton/year %MC wb LHV wb MJ/Kg

%AC wb

Sawdust Fine 6,508.5 15-20 10 0.5-2.0 Cut-off Large

dimensions 10,797.1 15-20 11 0.25-1.7

Bark Mixed 3,183.5 10 14 1.0-2.0 Total waste

20,489.1

In Nueva Segovia region some amount of cut-off and cobs have been using for firewood supply to the domestic sector, but much of waste including sawdust are frequently burned at the open-air. In despite of the fact that PROLEÑA has been developed a pre-feasibility study for 5 MW in Ocotal Nueva Segovia region, based on sawmill and forestry waste, since 1999, none sawmill

6 Basic Information Concerning Biomass Availability in Sawmills and Electricity Market features from Nicaragua and Honduras, report carried out for Central American Biopower Project in 2003 by Proleña

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owner or other local developer has claimed its own interest to go forward on the project. However, MADESSA has been recently expressed some interest to develop a biomass system for power generation7 using the wood waste. Available wood waste of 9000 ton/ year, from 6 very neared sawmills leading for MADESA could be a proposed new power project with a potential for 1 MWe with the control of the 30% of waste by MADESA. Major sawmills in Nicaragua, lumber production and wood waste availability are listed in ANNEX 2. Recent Changes in Electricity Sector6 Over recent years, the electricity sector in Nicaragua has been prepared for deregulation and privatisation. The process is now well advanced. Several privately owned generators supply electricity under PPAs. A wholesale market for electricity sales is functioning with about 20% of supply traded on a day to day basis. Since October 2000, the distrib ution system has been privately owned and operated. The remaining step, to sell off state owned generating assets, should have been completed in 2001, but when bids were requested none that the Government found acceptable were received. At the present the stated generation companies HYDROGESA (Centroamerica) and GEGSA (Managua and Brisas) rest until in the Government hands for privatisation conclusion. The regulatory framework developed from Law 272 and its regulations (decree 42 98) is defined in a series of seven volumes of regulations called “Normativas”. Individual vo lumes cover: Operation, Transport, Tariffs, Concessions and Licenses, Electricity Services, Quality of Service, Penalties and Sanctions. Together, Law 272 and the regul ations define the reorganized electricity sector (generation, transmission and distribution) including: the installation of new power plants, the obligations and responsibilities of the transmission system, the rights of "Large" consumers, the conditions of the distribution and commercial activities, the duties and obligations for concessionaires and final clients, the operation of the interconnected system, the rural electrification fund, the tariff regimes etc. Electricity Generation Table 3 shows that, over the ten year period 1990-1999, grid connected generating capacity increased by 64% from 371 MW in 1990 to 609 MW in 1999. Of this 238 MW increase only 15.8 MW, the cogeneration plant at Nicaragua Sugar ISA (a large sugar mill), was non-oil fuelled plant. Except for the GT at Las Brisas, which burns diesel oil, the new oil fuelled plants used HFO. In addition, all the isolated system capacity increases were diesel generation sets, using diesel oil. Table 3. Nominal capacity of electricity generation units in Nicaragua.

Plants Power system Units 1990 1999 Public owner MW Rated MW Effective Nicaragua Steam, HFO 2 x 50 100.00 100.00 Managua Steam, HFO 1 x 45, 2 x 6 75.00 57.50 Central América Hydro power 2 x 25 50.00 50.00

7 Discussion with Mr. Rodrigo Alvir in Yodeco office, at San Pedro de Sula Honduras, during sawmills visit, last October 2003

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Santa Bárbara Hydro power 2 x 25 50.00 50.00 Wabule Hydro power 1 x 1.6 1.62 1.62 Canoas Hydro power 1 x 1.8 1.79 1.79 Las Brisas GT, Diesel oil 1x 25,1x36 0 66.00 Chinandega GT, Diesel oil 1 x 15 15.00 15.00 Ormat Momotombo Geothermal power 2 x 35 70.00 70.00 Private owners Censa Amfels IC, HFO 1 x 35 36.00 Corinto IC, HFO 1 x 70 70.00 Tipitapa IC, HFO 1 x 56.7 52.20 Nicaragua Sugar ISA Co-gen., Bagasse 1 x 19.6 15.80 Timal (Victorias) Co-gen., Bagasse 1 x 10 12.00 Isolated systems Public interest Diesel oil power 10-21 units 7.80 10.37 Private interest Diesel oil power 1 x 0.88 0.88 TOTAL 371.21 609.15

Source: INE 1999 annual report According to the Nicaraguan Energy Institute (INE) annual report 1999, over the period 1995 to 1999, electricity generation has increased by 23.5%, from 1700 GWh in 1995 to 2100 GWh in 1999. In addition to generating for its own use, Nicaragua also imports and exports electricity with Costa Rica, Panama and Honduras. Imports have risen from 63 GWh in 1995 to 80.3 GWh in 1999 and exports have dropped from 77 GWh to 23 GWh in 1999. This suggests a slow trend towards increased net import of electricity. Electricity Transmission & Distribution

In 2000, the existing distribution system was divided geographically into two parts and ownership transferred to new companies. The new companies, Disnorte and Dissur, were privatised and are currently both owned by Union Fenosa. Economic Agents, including ENTRESA, that provide transmission cannot buy or sell electricity. Economic Agents that own generators and Large consumers (consumers whose demand is at least 2 MW) are permitted to buy wholesale electricity. Economic Agents focused in distribution activities can enter into contracts, to buy and sell electricity, with Generators (companies tha t are licensed to generate and sell electricity) and Large Consumers; they can also buy power in the spot market or in the international market. Owners of distribution systems are obligated to provide a connection line to Generators or Large Consumers, subject to defined commercial and technical provisions. Electricity Market Under the Nicaraguan regulations Large Consumers who are connected at a voltage equal or more than 13.8 KV and have a load of at least 2000 kW can buy wholesale electricity. They can do this by contracting with generators or by purchasing on the spot market.

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The average price for a retail consumer in 1995 was 9.0 UScents/kWh while in 1999 it was 10.5 UScents/kWh. In 2001 prices in the wholesale spot market were in the range 3. 5 to 6.5 UScents/kWh for energy and 150-180US$/MW-day for capacity. The electricity market began to function officially in October 2000. In March 2001, Union Fenosa announced that it would launch an auction to buy under contract, a total of 20 MW capacity and energy. The deregulation process launched in 1998 with the privatisation of ENEL has continued during 2001. For that reason, the government has created UREL (Re-structured Electric Sector Unit) to negotiate the sale of the state owned generating companies. The plan is understood that GEMOSA will continue to be leased by ORMAT, GEOSA, GECSA, and HYDROGESA will be sold. The government has announced that the sales may be possible by early 2002. Some potential buyers have been mentioned: Hydro Quebec, AES, Keppels, Enron, Coastal, and Amfels. The deregulation process has encouraged market transparency. CNDC publishes, on the internet, indicators in the wholesale market: prices, quantities and demand. The smallest block of electricity which can be offered via the wholesale competitive market is presently 5 MW. Private power plants smaller than this are left with only three market options for selling electricity – the distribution company, large consumers or large generators. Since there are is only one distribution company (two exist but both owned by the same holding co mpany) and very few large consumers or generators, a power plant under 5 MW has very limited options in terms of finding a buyer. Unlike many countries which have sought through regulatory or fiscal policy, to encourage renewable energy, no policy of this type currently exists in Nicaragua. Renewable Energy options There is no obligation on any state owned or privately owned electrical producer, transmission service supplier, distribution service supplier or end user to support renewable energy. In addition, there are no special fiscal or other support mechanisms that act to enhance the commercial viability of renewable energy. Since the smallest block size for electrical sales into the wholesale market is currently 5 MW, small renewable power plants are at a disadvantage compared to larger utility sized, fossil fuelled power plants. CNE is considering to present a new project Decree Law to incentive the Renewable Energy. Some of the points considered in the paper are to promote the equalisation of similar conditions than for power fuelled oil plants. It means that the fiscal exemption by which power fuelled oil plants do not pay tax for fuel could be considered as a threshold amount to incentive RREE plants operation. Currently the equal amount functioning as the subsidy for fuelled oil power plants is equivalent to 1.3 US$ cent/kWh.

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3.1.2 Honduras 8 Major zones for wood log supply Honduras seems has a more developed forestry sector than Nicaragua, with more advanced institutional framework and organization. Some 136 sawmills, larger than Nicaragua, are working on the same species of pine tree than in Nueva Segovia region of Nicaragua. Table 4. Major zones for Pine lumber production in Honduras 2001

Forest region

Lumber Palillo Nasa Tampa Otros Total

Comayagua 10,404.1 1,371.9 531.3 153.8 1,960.7 14,421.8 Copan 906.0 51.7 0.0 0.0 0.0 957.7

El paraíso 11,599.1 1,099.6 110.3 52.9 0.0 12,861.9 Fco.

Morazan 43,911.5 5,425.6 0.0 44.4 1,692.9 51,074.4

Nor-Occidental

6,324.7 87.2 1.2 0.0 0.0 6,413.1

Olancho Este

15,384.6 1,811.9 58.0 41.8 149.8 17,446.1

Olancho Oeste

16,515.1 4,096.0 103.7 1,841.1 175.0 22,730.9

Yoro 43,330.1 3,529.7 252.4 589.0 168.3 47,869.5 Zona Sur 923.2 46.9 0.0 0.0 0.0 970.1

Total 149,298.4 17,520.5 1,056.9 2,723.0 4,146.7 174,745.6 Source: AFE-COHDEFOR 2001 According to the AFE-COHDEFOR 2001 9, the four major regions providing pine round wood were: Yoro with 186,500 m3, Olancho oeste with 170,700 m3, Olancho este with 140,900 m3 y Francisco Morazan with 136,100 m3. More than 80% of production was with Pinus oocarpa, the same forest tree than existing in Nueva Segovia region. But despite of the fact that Olancho regions have a great potential it seems that only Yoro and Francisco Morazan regions have currently the sawmill installed capacity to process wood at the important quantities. That is the reason which lumber production is very important for two zones as we can see on table 3. From the point of view of forest wood supply, the two major zones could be Talanga (located at Francisco Morazan region) and Yoro region. This affirmation was provide by CODHEFOR10 and by the most interested parties like sawmill owners of Sansone and Yodeco11.

8 Basic Information Concerning Biomass Availability in Sawmills and Electricity Market features from Nicaragua and Honduras, report carried out for Central American Biopower Project in 2003 by Proleña 9 Numbers from CIEF-COHDEFOR Anuario Estadístico Forestal 2001 10 Personal communication with Mr. Carlos Sandoval working at COHDEFOR office 11 Sawmill visit in October 19, 2003

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Since 1990, round wood supply system for Honduran sawmills become more stable by bidding standing trees in forest under forest management plan approved by COHDEFOR. In 2001 were took place 8 bids with a total of 731,841 m3 of round wood. The currently average prices is ranged at 195.6 Lmp12/m 3 standing tree 13. Sawmill performance in Yoro and Talanga regions There are some larger sawmills in Honduras which its average production could be more than 10 million feet board/year of lumber. According the AFE-COHDEFOR 2001 the most important sawmills were: Yodeco in Yoro region with 22.3 million feet board and Santa Fe in Talanga region with 15.7 million feet board. Other greater sawmill production in 2001 were for Matagua and Foresta sawmills in Yoro region; and Sansone 3 and SERMA in Francisco Morazan region. Much of those sawmills export its major lumber production and have operating its own kiln dry system Saw milling process is frequently arranged for primary and secondary breakdown and most of the sawmills are producing other wood products for exportation. Some of the wood products besides lumber, are: Palillos, small diameter wood stick, usually to assembly the brush Nasas are a smaller integrated boxes of wood usually used as a tramp for lobsters Tampa is a small piece of wood 2’x2’ by 8 feet large, usually used in garden Under these conditions performance sawmill have a lumber conversion factor highest than Nueva Segovia region in Nicaragua. With available information from AFE-COHDEFOR our estimated Lumber recovery factor LRF could be some 0.68%14. In general terms, Honduran sawmills have better performance than Nicaraguan sawmills and are processing the smallest diameter of wood logs (tuncas). Waste like cobs and cut-off could be small dimensions, rather than N. Se govia. Available sawmill wood waste in Talanga region Talanga zone could be one of the best options for a power generation project were 8 sawmills have been produced some 37,000 feet board lumber in 2001. But only 3 sawmills including Santa Fe, Sansone 2 and Sansone 3, have been concentrated 91% of produced lumber. Conservative estimation15 of wood waste available in sawmills could be near 9,641 ton/year, better enough to launch a pre-feasibility study for 1 MWe power generation based on wood waste. Table 5. Available Wood waste in sawmills from Talanga region

Type of waste

Features Ton/year %MC wb LHV wb MJ/Kg

%AC wb

Sawdust Fine 2,962 15-20 10 0.5-2.0

12 1 Euro = 22 Lempiras 13 Mr. Gatlin mentioned that prices for standing tree could be 126-400 Lmp/m3 (7-23 US$/m3) 14 The same numbers were provided by Mr. Gatling in sawmill visit in Honduras 15 Conservative estimation of Honduran sawmill wood waste was performed, because it is based on Lumber recovery factor derived from Proleña 2000 study, and more advanced study on saw logs sample is recommended.

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Cut-off Small dim. 3,780 15-20 11 0.25-1.7 Bark Mixed 2,898 10% 14 1.0-2.0 Total waste 9,641

Source: Annex 3 Talanga is located some 50-60 Km from Tegucigalpa. Available sawmill wood waste in Yoro region Yoro region could be another better options for a power generation project were 28 sawmills have been produced some 53 million feet board lumber in 2001. But only 4 sawmills including Yodeco, Matagua, Foresta, and Inmarsa, have been concentrated 91% of produced lumber (see Annex 3). Wood waste available in sawmills could be near 13, 635 ton/year, better enough to carry a pre-feasibility for some 1.5 MWe for power generation based on wood waste. Table 6. Available wood waste in sawmills of Yoro region

Type of waste

Features Ton/year %MC wb LHV wb MJ/Kg

%AC wb

Sawdust Fine 4,190 15-20 10 0.5-2.0 Cut-off Small dim. 5,346 15-20 11 0.25-1.7 Bark Mixed 4,099 10 14 1.0-2.0 Total waste

13,635

Yoro department has been mentioned by Maderas de Oriente project16 as a region producing in 1994 near to 49,259 m3 of wood waste (27,163 solid wood waste, and 22,096 m3 of sawdust). Major sawmills in Honduras, lumber production and wood waste availability are listed in ANNEX 3. Some news from Electricity Sector In 1994 Hydro power plants have provided 80% of electricity consumed in Honduras. In 2002 Renewable Energy plants including Hydro, have provided 48.2% of the total electricity consumed. The total installed capacity of the system is currently 928 MW. In Year 2000 electricity consumption was 3,189 GWh, it was 5% more than 1999. Residential sector consumption is 41.8%, commercial sector 21.4%, industrial sector 16.8%. The ENEE17 stated company is also a generator and distributor company. According ENEE projections, electricity demand could rise 107.5% from 4,590 GWh in 2002 to 9,528 MW in 2016, assuming a growth rate of 4-6% yearly. However ENEE suggest that 66.5% of the total energy could be from Renewable energy generation and the rest 33.5% could be from

16 Aserradero Teupasenti Biomass to Energy Power Project, Initial Feasibility Study 1994 17 ENEE is the stated electricity company, created in 1957, that become generator of the 8% of the total electricity, and has the monopole of the 97% of the electricity distribution.

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oil thermo fuelled plants18. It was suggested that during the same period power generation could rise from 966.45 MW to 2103 MW, including the lost of 382.4 MW from retired plants.

Figure 2. ENEE Projected Electricity Demand Despite of the fact that Nicaragua and Honduras has the same poverty degree, Electricity sector is a little greater than Nicaragua, around, 85% of urban population ha s been served by the grid, but only 25% of the rural population has been currently served including off grid systems. Regulation Framework Decree 158-94 establish the principal rules to regulate activities generation, transmission, distribution and commercialisation of electricity. Decree 85-98, states the public interest of the energy development from Renewable energy sources. Decree 267-98, Decree Law to Incentive the Electricity Generation based on national renewable resources. Fiscal incentives for construction phase, Fiscal incentives for operation phase, options for sale and preferential prices from ENEE. Decree 9-2001, Law for Guaranteed buy for all electricity from Eolic farms and from other RE mentioned in Decree 267-98 (Hydro, Biomass, Geo). The principal is the obligate buy in without biding for electricity provided for any Renewable Energy plant which capacity could be less than 5 MW. Two major institutions for Electricity sector: SERNA, created in 1996, is currently managing a Development program for electricity generation based on renewable energy sources PRODER

18 Cited by AHPPER

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CNE is the institution to regulate, normative and control of the activities generation, distribution and transmission Electricity Generation

The installed capacity for electricity generation in Honduras during 2000 was 918.6 MW, a total of 434.8 MW (47.3%) was Hydro, a total of 477.8 MW (52.04%) was oil fuelled plants and 6MW from Biomass cogeneration plant. At the same time electricity demand was 700 MW. ENEE has suggested that demand for 2003 could rise to 854 MW. 5 Hydro plants compose the system, 9 thermo oil fuelled plants (5 operated by private generators). The solely Cajon Hydro plant has an installed capacity of 300 MW, equal to 43.3% of the total capacity.

C O N T R I B U C I O N P O R F U E N T E S P A R A P R O D U C C I O N D E E L E C T R I C I D A D , H O N D U R A S 2 0 0 1

C E N T R A L E S H I D R O

E L E C T R I C A S5 4 . 6 2 %

F U E L O I L

3 4 . 4 9 %

D I E S E L O I L3 . 4 1 %

A U T O P R O D U C T O R E S

0 . 2 2 %

I M P O R T A C I O N7 . 2 6 %

Figure 3. Elec tricity generation in Honduras 2001 (Source: SERNA & DGEH 2002) In 2001 electricity generation was provided as follow, 34.5% from fuel oil power plants, 3.4% from diesel oil power plants, 54.6% by Hydro power plants, 0.2% from auto-producers, and 7.3% from imports. More details about the power system (data of 2002) and electricity market in Honduras is described in section 3.4.1. Electricity Transmission & Distribution The ENEE stated company currently performs transmission & distribution electricity in Honduras. The monopole of transmission and distribution could be in favour for energy development of Renewable energy, in the framework of the new energy policies.

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Honduras electricity system is interconnected with Nicaragua, Costa Rica and Panama with a 230 kV transmission line. A new similar transmission line is currently been constructed to connect with the El Salvador System, under SIEPAC project19. The plans to meet the demand of rural electrification are in initial stages and are directed mainly to the extension of network. The Social Fund of Electrificacio'n Rural (FOSODE), provides financing limited ENEE for projects with rural electrification. Additional funds are available by means of bilateral loans (of Norway and Korea) or through a fund created through the Agreement of San José, by means of which Mexico and Venezuela offer funds that can be used for development loans. In agreement with the strategic plan of national electrification of the ENEE, it is tried at the moment to accelerate the rate of electrification of the country, increasing the present index of cover of approximately 50% to a 75% for year 2008. Electricity Market Electricity market in Honduras is similar than Costa Rica rather than Nicaragua, Guatemala and El Salvador, whe re a partial wholesale electricity market has been functioning in recent years. Stated companies ICE in Costa Rica and ENEE in Honduras are playing a greater and dominant role in the market (see annex 3). ENEE is currently buying at 6 US$cents/kwh and selling near to 12 US$ cents/kWh20 for industry sector. According to the Law Framework for Electricity Sector (LMSE) a renewable energy project has 3 options to sell its own electricity. The option one is sell to ENEE by 2 options: under a PPA for long term supply of the whole output were the electricity price could be equal to the Marginal Cost for short term (STMC), and a surplus additional equal to 10% of STMC. The second option is when the business arrangement is promoted by ENEE according defined TOR and renewable energy project is preferred. Last option for a renewable energy project is to sell the electricity output to the larger consumer or for a distribution company. Larger consumer is defined by the LMSE which maximum demand is 1000 kW and it is served by 34.5 kV line. On this context, a biomass energy project could sell its own electricity excess to the grid for 6 cents/kWh or supply energy to other sawmills by 10 US$cents/kWh. Renewable Energy options According to AHPPER21 organization, there are good perspectives for Biomass Cogeneration projects, mainly those performed by the sugar mills and by African Palm Oil Company. Performed studies in 4 sawmills of the country (Yojoa, Tres Valles, Azunosa, La Grecia) confirm that sugar industry has a greater potential for cogeneration and electricity generation to provide

19 The SIEPAC project is the interconnection electrical regional system from Panama to Guatemala, financed by IADB. It is foreseen that the first electrical circuit from SIEPAC could be launched in operation on 2006. 20 Numbers mentioned by Mr. Gatlin 21 www. ahpper.hn

17

the system for some 150 MW capacity22. Currently AYSA company is the solely selling its electricity excess to the ENEE grid. Some of the biomass projects are: Aguan plant, Lean plant, Sugar mill Tres valles, Sugar mill La Grecia. These projects represent a total capacity of 15.70 MW. However, Climate Change National Communication mentioned as the possible mitigation projects a total potential of 140 MW from different renewable sources. Its mentioned a International Bamboo Developing Co with 50 MW power project in the Sula Valley, Biogen project with 2 biomass power project combined sawmill waste and palm oil waste with a total of 60 MW, 30 MW each one. Finally the ZOND Honduras eolic project located in the Hule pick near to Tegucigalpa23.

3.1.3 Guatemala

Development of forest plantations The surface of artificial forests with an age up to 25 years, is increasing in Guatemala, with the effect, that the quantities of wood, result of forestry management, overpasses the possibilities to locate it on the market. Trimming and thinning are indispensable measures to maintain plantations healthy and with major productivity; nevertheless, the necessary investment (including costs of financing) for terminating this process is added to the costs of the final product, mature wood. However, many owners simply neglect the necessity of forestry management, and consequently loose great opportunities. But, the effects are more transcendental than just no-realise an opportunity: on the long term, artificial forests wouldn’t be able to provide enough wood in the quality and quantity in demanded. To generate an intermediate income during the forestry cycle, which covers the costs of management, the costs of finance and , eventually, resulting in an economical benefit, the owner needs a possibility to process and merchandise round small-diameter timber. Replanting about 1450ha in the region V (Chimaltenango y Sacatepéquez) produces annually a volume of approx. 43.500 m³, which is added to the 830.000 m³ in roundabout 12.000 ha in stock. 24 Forest cover in Guatemala was 2,849.722 hectares in 2000. The annual establishment of new plantations has been estimated at 20,900 hectares in 2000. 25 Table 8. Plantation areas by species groups.

Area Species group [ha] [%] Acacia spp. Dalbergia Eucalyptus 13,300 10.0

22 BUN-CA 1997, has been identified 3 potential project for cogeneration 23 MW, from a total portfolio of 283 MW at the regional level. 23 Climate Change National Communication for Honduras, 2002 24 ESTUDIO DE PREFACTIBILIDAD , CONTECMA (CONSULTOR EN TECNOLOGIA DE MADERA), Dipl. Ing. Daniel Krabatsch, San Lucas, Sacatepéquez 2003 25 FAO Forestry [www.fao.org/forestry]

18

Gmelina 22,000 16.6 Mahoganies Rubber 40,800 30.7 Teak 4,000 3.0 Terminalia Other Broadleaved 7,300 5.5 Casuarina spp. Pinus spp. 37,400 28.2 Other Coniferous 8,000 6.0 Unspecified Total 132,800 100.0

As shown in the table 9 the use of roundwood has increased in recent years only because the usage of wood as fuel has grown. The production of industrial roundwood, sawnwood or wood-based panels has been on the same level during the last years. Table 9. Forest Products Production 1998-200226:

Units x1000 1998 1999 2000 2001 2002

Roundwood Cum 14076 14709 15007 15337 15674

Industrial Roundwood Cum 201 506 467 467 467

Sawlogs and Veneer Logs Cum 159 504 464 464 464

Other Indust Roundwd Cum 42 2 3 3 3

Wood Fuel Cum 13874 14203 14540 14870 15207

Sawnwood Cum 308 235 220 220 220

Sawnwood (C) Cum 263 195 180 180 180

Sawnwood (NC) Cum 45 40 40 40 40

Wood -Based Panels Cum 43 43 43 43 43

Veneer Sheets Cum 19 19 19 19 19

Plywood Cum 20 20 20 20 20

Particle Board Cum 5 5 5 5 5

Forest funding To promote plantations and the conservation of natural forests, several incentive policies have been implemented. A law promulgated in 1974, permitted partial tax deductions related to the establishment and maintenance costs of plantations of less than five ha. To 1995, over 15 000 ha of plantations were established using this incentive scheme. 27 In 1997, procedures were designed to permit the compilation of plantation data. Plantations are categorized as: the result of forest incentives; as voluntary establishment or as the obligation of management.

26 FAO Forestry [www.fao.org/forestry] 27 FAO Forestry [www.fao.org/forestry]

19

Guatemala has a Special Forest Fund. Its income comes from multiple sources, including payments under the Forest Law, donations, loans and contributions from international organisations, and interest on the fund itself. The National Institute of Forests (INAB) administers the fund. The law directs INAB to use the fund for forest development, advancement of industrial forestry, management of natural forests, agroforestry, watershed restoration, reforestation, research, agroforestry education, and other purposes. INAB must prepare an annual plan, approved by its board of directors. The law directs INAB to spend 70 percent of the fund on its own programs and 30 percent on three programs strengthening agroforestry education. The regulations provide for INAB´s internal auditors to review fund spending.28 A new incentive programme for forest development called PINFOR (Programa de Incentivos Forestales) was launched in 1997. This incentive scheme is promoted by INAB, Instituto Nacional de Bosques and involves a cash payment from the state to the owners of forest land to execute forestation projects. The objectives of PINFOR include not only plantations but also the promotion of sustainable forest production, the stimulation of investment in forest projects, increasing the forest sector participation in the national economy and increasing the national forest cover. Sawmills The complete list of industry and enterprises related to sawmill and furniture business is available at www.inab.gob.gt. Some of the listed stationary sawmills are collected in Annex 4. Cluster Forestal has also published a directory29 which includes the names and contact data of the sawmills located in Guatemala. Unfortunately the available lists and directories do not include any data related to use of logs, production or wood waste availability. During the project it was not possible to locate any complete list of sawmills provided with the above mentioned data. However the companies visited (especially Lignum and Ecomadera) are named as the biggest lumber producers in Guatemala and therefore the availability of wood waste in their sawmills is the highest, too. Electricity generation and market Description of the Guatemalan power system and electricity market is shortly described in section 3.4.2.

28 FAO Forestry [www.fao.org/forestry] 29 Directorio, Forestal, de Muebles y Productos de Madera 2003, Cluster Forestal

20

3.2 SITE VISITS

3.2.1 Nicaragua The site visits in Nicaragua included two sawmills in Ocotal area, Las Segovias (see Fig. 4);

Figure 4. Location of sawmill site visits in Ocotal, Nicaragua 1. EMPRESA PINOTEA S. A. (see Fig. 5)

- use of wood logs 7000-10000 m3/year, lumber production about 4000 m 3/year - wood waste available about 1000 ton/year

Figure 5. Site visit to Pinotea sawmill

21

2. MADESA (Grupo Invalar) (see Fig. 6) - use of wood logs 15000-20000 m3/year, lumber production about 10000

m3/year - wood waste available about 2700 ton/year

Figure 6. Site visit to Madessa sawmill

3.2.2 Honduras The site visits in Honduras included one sawmill in Tegucigalpa and two sawmills (headquarters) in San Pedro Sula (see Fig. 7)

Figure 7. Location of sawmills and head offices visited in Tegucigalpa and San Pedro Sula, Honduras 1. SANSONE SAWMILL No 1 (see Fig. 8)

- use of wood logs about 20000 m3/year. - wood waste available about 1500 ton/year. Bigger sawmill Sansone No 3 (>

30000 m3) is located in Talanga/Guaimaca area, Francisco Morazan region.

22

Figure 8. Sansone No 1 sawmill in Tegucigalpa. 2. GRUPO INVALAR (YODECO), head office

- sawmill located in Yoro region. Use of wood logs > 100,000 m3/year - lumber production about 75000 m3/year - wood waste available 8000 ton/year

3. INDUSTRIA MADERERA MATAGUA, S.A.. (INMMA), head office

- sawmill located in Yoro region. Use of wood logs >20000 m3/year - lumber production about 15000 m3/year - wood waste available 1600 ton/year

3.2.3 Guatemala The site visits in Guatemala (see Fig. 9) included one sawmill visit in El Progreso (El Rancho) and one visit in the head office of sawmill in Guatemala City. In addition the program contained three farm visits, one close to Guatemala City, one in Jalapa and one in Salama. There was also a visit to chip- and plywood board plant in El Progreso region.

23

Figure 9. Location of sawmills, farms and head offices visited in Guatemala

1. LIGNUM SAWMILL (see Fig. 10) - use of wood logs about 30000 m3/year. Two sawmills located next to each

other in El Rancho producing lumber and electric poles. - wood waste available 4000 ton/year

Figure 10. Visit in Lignum sawmill site in El Rancho 2. ECOMADERA, head office

- sawmill located in El Progreso region. Use of wood logs about 30000 m3/year - wood waste available 3000-4000 ton/year (estimation)

3. SAN JOSÉ OCANA (see Fig. 11)

- farm located close to Guatemala City. Plantation (pine) area 585 hectares.

24

Figure 11. Visit in San José Ocana farm 4. LA LAGUNILLA (see Fig. 12)

- farm located in Jalapa. Owned by Bosch-family, owners of Lignum sawmills

Figure 12. Visit in La Lagunilla farm 5. LOS RAMONES (see Fig. 13)

- farm located in San Jerónimo close to Salama city. Plantation (pine) area 1500 hectares. Owner Grupo Pasa, Reforestadora Verapz, S.A (REVESA).

25

Figure 13. Visit in Los Ramones farm in San Jerónimo 6. MADERAS EL ALTO (see Fig. 14)

- plywood board and chipboard plant located close to Zacapa city - interested in purchasing electricity produced by biopower plant if the price is

competitive

Figure 14. Visit in Maderas el Alto (close to Zacapa)

26

3.3 PRELIMINARY FEASIBILITY STUDIES It was decided during the project by the project group that the most potential sites for biomass based power plant would be located in Honduras or Guatemala. Nicaragua was left out due to the fact that the wood waste availability, in the sawmills visited and according to the data collected of the sawmills, was not considered to be sufficient for the technology in question (Wärtsilä Biopower 2 or 5). However, there is potential in Nicaragua for smaller biopower plants especially if the wood waste is collected from several sawmills in same region as indicated in the country study. After the initial assessment and the site visits four sawmills were selected for further study, two in Honduras and two in Guatemala. The selected sawmills in Honduras were Yodeco (Grupo Invalar) and INMMA (Industria Maderera Matagua) and in Guatemala Lignum and Ecomadera. In addition, it was pointed out that the wood availability, especially in Guatemala, can be secured by forest owners (logging and thinning residues of forests etc.) if required. However, the main question is the price of the additional fuel. According to the necessary information gathered (requested from sawmills or available) it was finally decided that the preliminary feasibility study is carried out for Yodeco in Honduras and Lignum in Guatemala. Anyway, above mentioned studies give a good idea also for the other cases in these countries.

3.3.1 Honduras The preliminary feasibility study of biopower plant was carried out using the available data for Yodeco sawmill located in Yoro region. Lewis Engineering Inc30 has carried out also a feasibility study under name Honduras Wood Waste Cogeneration Plant Feasibility Study in where Yodeco sawmill is considered as a main fuel supplier. Funding assistance for this detailed feasibility study (6,3 MWe gross output) was provided by Canadian International Development Agency. The data available in the above mentioned study was partly used also in feasibility calculations for this report. Basic input data used On-site data: • Sawmill residues: 8000 tons/year (see Annex 3) • On-site electric load: 100 kW (constant) • Heat load: 0 kW (existing boilers used for heat production) Power plant data: • Condensing type BioPower 2 • Fuel burning capacity: 12 MW • Electric capacity: 2,3 MWe • Gross efficiency: 19,2 % (constant) • Peak load usage: 8760 hours/year (for calculation purposes only)

30 http://www.lewiseng.ns.ca/Content/Projects-energy.html

27

Financial data: • Fuel prices:

- Yodeco sawmill waste: 0 USD/MWh (share 20 %) - Additional purchased fuel 10 USD/MWh (share 80 %) - Mean price 8 USD/MWh

• Purchase price for electricity: 130 USD/MWh • Selling price of electricity into grid: 80 USD/MWh • Investment cost of biopower plant: 2170 USD/kWe • Maintenance cost of biopower plant: 10 USD/MWh • Maintenance cost of heat boilers: 2 USD/MWh Results and sensitivity analysis The calculations are based on the basic input data indicated above. Especially the cost of fuel and investment has great effect on the feasibility of the project. In addition the on-site electric load in Yodeco case is quite low which makes the project feasibility highly dependent on the price of the electricity sold into the grid. The feasibility is also easily higher if the heat could be recovered and utilized to substitute for example wood based biomass for fuel oil. One possibility is that the location of power plant could based on the on-site heat demand. The certificated emission credits (CER) or any public financial subsidies are not taken into count in the calculations. The estimations of the emission credits are studied separately at the end of Chapter 3.4.1. The different cost and income components as well as total yearly power plant gain are presented in Figure 15.

Cost and income components

-1000

-500

0

500

1000

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Avo

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Figure 15. Cost and income components and total annual CHP-gain in Yodeco sawmill case

28

The payback time for the basic case is 8,2 years or 11 years with the interest rate of 0 % or 5 %, respectively. This size of biopower plant would be more feasible in Yodeco sawmill case if the fuel price can be reduced by increasing the share of free fuel and/or with cooperation (fuel and power supply agreements) with other sawmills having excess of fuel as indicated in Lewis Engineering Inc feasibility study. Sensitivity calculation in two different interest rate (0 % and 5 %) related to the price of fuel is shown in Figure 16. The fuel price is in basic case 8 USD/MWh.

0

5

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0 1 2 3 4 5 6 7 8 9 10 11 12

Average price of biofuel (USD/MWh)

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Interest 0% Interest 5%

Figure 16. Payback times in relation to different fuel prices and interest rates of 0 % and 5 %

in Yodeco sawmill case Sensitivity calculation in two d ifferent interest rate (0 % and 5 %) related to the investment costs is shown in Figure 17. The investment costs are in basic case 5 million USD.

29

0

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Figure 17. Payback times in relation to different investment costs and interest rates of 0 %

and 5 % in Yodeco sawmill case Sensitivity calculation in two different interest rate (0 % and 5 %) related to the selling price of electricity into the grid is shown in Figure 18. The payback time exceed 100 years when the selling price is 60 USD/MWh with interest rate of 5 %. The selling price in basic case is 80 USD/MWh.

0

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Figure 18. Payback times in relation to selling prices of electricity and interest rates of 0 % and 5

% in Yodeco sawmill case

30

3.3.2 Guatemala Basic input data used On-site data: • Sawmill residues: 3800 tons/year (data from Lignum) • On-site electric load: average 45 kW (load profiles submitted by Lignum) • Heat load: 0 kW (existing boilers used for heat production) Power plant data: • Condensing type BioPower 2 • Fuel burning capacity: 12 MW • Electric capacity: 2,3 MWe • Gross efficiency: 19,2 % (constant) • Peak load usage: 8760 hours/year (for calculation purposes only) Financial data: • Fuel prices:

- Lignum sawmill waste: 0 USD/MWh (share 10 %) - Additional purchased fuel 10 USD/MWh (share 90 %) - Mean price 9 USD/MWh

• Purchase price for electricity: 130 USD/MWh • Selling price of electricity into grid: 80 USD/MWh • Investment cost of biopower plant: 2170 USD/kWe • Maintenance cost of biopower plant: 10 USD/MWh • Maintenance cost of heat boilers: 2 USD/MWh Results and sensitivity calculations The calculations are based on the basic input data indicated above. It is noted also in this case that especially the cost of fuel and investment has great effect on the feasibility of the project. In addition the on-site electric load is in Lignum case low which makes the project feasibility highly dependent on the price of the electricity sold into the grid. The feasibility is also easily higher if the heat could be recovered and utilized to substitute for example wood based biomass for fuel oil. The certificated emission credits (CER) or any public financial subsidies are not taken into count in the calculations. The estimations of the emission credits are studied separately at the end of Chapter 3.4.2. The different cost and income components as well as total yearly power plant gain are presented in Figure 19.

31

Cost and income components

-1500

-1000

-500

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Figure 19. Cost and income components and total annual CHP-gain in Lignum sawmill case The payback time for the basic case is 10 years or 15 years with the interest rate of 0 % or 5 %, respectively. Lignum sawmill could be a potential biopower plant location for smaller power plant (lower investment cost) especially if the fuel price can be reduced by increasing the share of free fuel and/or with cooperation (fuel and power supply agreements) with other sawmills having excess of fuel. Sensitivity calculation in two different interest rate (0 % and 5 %) related to the price of fuel is shown in Figure 20. The fuel price is in basic case 9 USD/MWh.

32

0

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Figure 20. Payback times in relation to different fuel prices and interest rates of 0 % and 5 %

in Lignum sawmill case Sensitivity calculation in two different interest rate (0 % and 5 %) related to the investment costs is shown in Figure 21. The investment costs are in basic case 5 million USD.

0

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Figure 21. Payback times in relation to different investment costs and interest rates of 0 %

and 5 % in Lignum sawmill case

33

Sensitivity calculation in two different interest rate (0 % and 5 %) related to the selling price of electricity into the grid is shown in Figure 22. The payback time exceed 100 years when the selling price is 60 USD/MWh with interest rate of 5 %. The selling price in basic case is 80 USD/MWh.

0

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Figure 22. Payback times in relation to selling prices of electricity and interest rates of 0 %

and 5 % in Lignum sawmill case

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3.4 CO2 REDUCTION POTENTIAL Simplified Baselines for Small-scale CDM Projects Simplified modalities and procedures for small-scale CDM projects were developed by the Small-scale CDM Panel established under the CDM Executive Board. The modalities were adopted by the 8th Conference of the Parties to the UNFCCC in November 2002 in New Delhi. Renewable energy projects with a rated/installed electricity capacity below 15 MWe are considered to be small-scale projects. In the case of biomass combined heat and power (co-generation) systems, the sum of all forms of energy output shall not exceed 45 MWth. E.g., for a biomass based co-generating system the rating for the primary boiler shall not exceed 45 MWth. Specific indicative simplified baseline methodologies have been defined for small-scale CDM projects.31 Category I.D. of the simplified baseline methodologies comprises renewable energy projects that supply electricity to a grid that is or would have been supplied by at least one fossil fuel fired generating unit. The project boundary encompasses the physical, geographical site of the renewable generation source. The baseline in these renewable energy projects is the amount of electricity (in kWh) produced by the renewable generating unit multiplied by an emission coefficient (in kgCO2equ/kWh). There are two alternative ways for calculating the emission coefficient:

1. The average of the “approximate operating margin” and the “build margin”, where: a. The “approximate operating margin” is the weighted average emissions (in

kgCO2equ/kWh) of all generating sources serving the system, excluding hydro, geothermal, wind, low-cost biomass, nuclear and solar generation;

b. The “build margin” is the weighted average emissions (in kgCO2equ/kWh) of recent capacity additions to the system, which capacity additions a re defined as the greater (in MWh) of most recent 20% of existing plants or the 5 most recent plants; OR

2. The weighted average emissions (in kg CO2equ/kWh) of the current generation mix.

The emission coefficient must be calculated in a transparent and conservative manner (i.e. not overestimating the amount of emission reductions generated). Monitoring of the emission reduction shall consist of metering the electricity generated by the renewable technology. In the case of co-fired plants, the amount of biomass input and its energy content shall also be monitored. Emission Factors and Specific Emissions The default emission factors of the IPCC32 for diesel oil, heavy fuel oil and coal are 74.1 kgCO2/GJ 77.4 kgCO2/GJ and 94.6 kgCO2/GJ, respectively. Table 10 shows the emission factors and plant efficiencies used in the calculation of the emission reductions. These are conservative values, i.e. relatively high plant efficiencies have been chosen to give relatively low baseline emissions. For the actual Project Design Documents (PDDs), more accurate efficiency

31 The methodologies can be found at http://cdm.unfccc.int/pac/howto/SmallScalePA/index.html. 32 Intergovernmental Panel on Climate Change www.ipcc.ch.

35

figures should be used. Furthermore, methane (CH4) and nitrous oxide (N2O) emissions are neglected both in the baseline calculations and in the project emissions, so it is assumed that CO2equ emissions are equal to CO2 emissions. Table 10. Emission factors and plant efficiencies used in calculating the emission reductions.

The emission and oxidation factors are IPCC defaults and the efficiencies are chosen conservatively, i.e. showing relatively high efficiencies to give lower baseline emissions.

Fuel Emission Factor Oxidation Technology Efficiency Emission Coefficient

kgCO2/GJ Factor kgCO2/MWh(electricity)

Coal 94.6 98% Steam Turbine 30% 1,112

Heavy fuel oil 77.4 99% Steam Turbine 30% 920

Heavy fuel oil 77.4 99% Diesel Engine 40% 690

Diesel oil 74.1 99% Gas Turbine 27% 978

Diesel oil 74.1 99% Diesel Engine 40% 660

3.4.1 CDM opportunities in Honduras Description of the Honduran Power System Installed capacity in Honduras in 2002 was 1,044 MW, out of which 466 MW was hydropower, 18 MW biomass and the rest (559 MW) fossil fuel fired thermal plants. The state-owned Empresa Nacional de Energía Eléctrica (ENEE) owns most of the hydroelectric capacity (464 MW) and some diesel and gas turbine plants (38 MW). The private generation (540 MW) is mostly based on medium-speed diesel engines using heavy fuel oil. The fuel used in gas turbine plants is diesel oil. The biomass plants are based mainly on residues from oil-palm and sugarcane industries. See Table 11 for details. Table 11. Installed power generation capacity in Honduras in 2002.

Source: Empresa Nacional de Energía Eléctrica (ENEE) www.enee.hn.

Technology MW %Hydropower (ENEE) 464.4 44.5%Hydropower (Private) 1.3 0.1%Hydropower subtotal 465.7 44.6%Diesel Engines (ENEE) 5.0 0.5%Diesel Engines (Private) 481.1 46.1%Diesel Engines Subtotal 486.1 46.6%Gas Turbines (ENEE) 33.0 3.2%Gas Turbines (Private) 39.5 3.8%Gas Turbines Subtotal 72.5 6.9%Biomass (Private) 18.2 1.7%National Grid Total 1,042.5 99.9%Isolated Systems (diesel engines) 1.1 0.1%TOTAL 1,043.6 100.0%

Electricity generation in the integrated national system in 2002 was 4,907 GWh including imports. Of this, 55.0% was based on diesel engines, 32.8% on hydropower, 3.7% on diesel oil fired gas turbines and 0.1% on biomass plants. Imports were 415 GWh (8.5%).

36

Table 12. Electricity generation and imports in Honduras in 2002.

Source: Empresa Nacional de Energía Eléctrica (ENEE).

Source GWh %Diesel Engines 2,697.2 55.0%Hydropower 1,610.5 32.8%Gas Turbines 179.5 3.7%Biomass 4.6 0.1%TOTAL Generation 4,491.8 91.5%Imports 415.1 8.5%TOTAL 4,906.9 100.0%

The Honduran electricity market is vertically integrated and the national electricity company ENEE is the only entity authorised to buy electricity from the private generators. Honduras has been very active in promoting renewable energy and it has some important incentives in place. For power generators using renewable resources, there exist standardised long -term power purchase agreements (PPAs) that include tax and duty exemptions (during the construction period and first five years of operation), preferred tariffs (10% above the short-term marginal cost) and guarantees of dispatch (see also country study of Honduras, section 3.1.2). Currently there exists 23 renewable PPAs with biomass and hydro and 10 new projects including hydro, biomass, wind and geothermic resources are being negotiated. National CDM Policy Honduras ratified the Kyoto Protocol in July 2000. The CDM focal point is Ing. Leonardo Matute in the Secretary of Natural Resources and the Environment (Secretaría de Recursos Naturales y Ambiente SERNA). In 2003 Honduras presented five small hydropower projects (between 500 kW and 10 MW) for the Finnish CDM Pilot Programme. Project design documents (PDDs) are currently being elaborated for these projects. A 50 MW wind power project was presented to the World Bank Prototype Carbon Fund earlier in December 2000. In this project it is expected that ENEE will own 35% of the generated emission reductions. CO2 Emissions from Power Generation Based on the generation figures in Table 12 and the emission coefficients in Table 10, the weighted average CO2 emissions from electricity generation in Honduras in 2002 were about 415 kgCO2e/MWh if electricity export is included as a zero-emission source and 453 kgCO2/MWh if the exports are excluded altogether. The approximate operating margin (excluding hydro and biomass but including imports) is approximately 618 kgCO2/MWh. If imports are also excluded from the margin, the operating margin becomes 708 kgCO2/MWh. The build margin should be calculated from the recent capacity additions. Between 1999 and 2002, the net generation capacity in Honduras was increased by 282.7 MW. The gross increase was 312.7 MW, as a 30 MW gas turbine plant in Bermejo was decommissioned in 2001. The estimated electricity production of these plants in 2002 was 1,676 GWh, out of which about 90% was generated in diesel power plants using heavy fuel oil (see Table 13). The build margin for CO2 emissions based on these figures is 623 kgCO2/MWh.

37

Using the more conservative value for operating margin (including electricity imports with zero emissions), the combined emission coefficient for the Honduran electricity grid becomes

MWhkgCOMWhkgCOff

f buildoperatingcombined /5.620/

2623618

2 22 =+

=+

=

Table 13. Capacity increments in Honduran national grid between 1999 and 2002. The

generation capacity increased 312.7 MW (30% of the installed capacity in the end of 2002) during this period (the decommissioning of the 30 MW Bermejo gas turbine plant is excluded from the calculation). As the Nacaome hydropower plant entered in operation only in December 2002 , the Peak Load Utilisation (PLU) is estimated on the basis of the older Cañaveral hydro plant. Source: Empresa Nacional de Energía Eléctrica (ENEE).

Power Plant Installed Technology Capacity, MW PLU, h Production, GWh %

Nacaome 2002 Hydro 30.0 5,250 157.5

La Nieve 2002 Hydro 0.5 358 0.179

El Coyolar 2000 Hydro 1.7 221 0.38

32.2 4,909 158.05 9.4%

EMCE II 1999 Diesel Engine 55.0 7,320 402.61

Lufussa II 1999 Diesel Engine 80.0 7,547 603.75

Nacional de Ingenería 1999,2002 Diesel Engine 50.0 2,661 133.06

Laeisz 2001,2002 Diesel Engine 60.0 2,232 133.92

Cemcol 2002 Diesel Engine 65.0 3,697 240.32

310.0 4,883 1,513.65 90.3%

La Grecia 2002 Biomass 8.0 280 2.24

Aysa 2002 Biomass 8.0 301 2.41

Lean 2002 Biomass 0.5 - -

Aguan 2002 Biomass 0.5 - -

17.0 273 4.65 0.3%

TOTAL 350.2 4,787 1,676.35 100.0%

Subtotal Diesel Engine

Subtotal Biomass

Subtotal Hydro

Emission reduction from the Yodeco Plant If we estimate that the Yodeco Plant power output is 2.3 MW and peak load utilisation 8,000 hours per annum, the annual electricity generation is 18,400 MWh. This corresponds to annual emission reduction of 11,400 tCO2e using combined margin baseline. Possible reduction of the methane emissions related to the use of biomass is not taken into account. With Certified Emission Reduction (CER) prices between 3 – 5 USD/tonne, the emission reduction would have an annual value of USD 34,000 – 57,000. Over a ten-year-baseline period and using a discount rate of 10%, the net present value of the CERs would be USD 210,000 – 350,000.

3.4.2 CDM opportunities in Guatemala Description of the Guatemalan Power System Installed capacity in Guatemala in May 2003 was 1,882 MW, out of which 583 MW was hydropower, 37 MW geothermal, 201 MW sugarcane bagasse (and fuel oil) and 1,062 MW fossil

38

fuel based generation. Fossil fuel based plants are mainly diesel engines using heavy fuel oil, gas turbines using diesel oil and steam turbine plants using heavy fuel oil. See Table 14 details. Table 14. Installed power generation capacity in Guatemala in May 2003.

Source: Administrador del Mercado Mayorista (AMM) www.amm.org.gt.

Technology MW %Hydropower Plants 582.7 31.0%Steam Turbines (heavy fuel oil) 59.0 3.1%Steam Turbines (coal) 136.0 7.2%Gas Turbines (diesel oil) 218.5 11.6%Diesel Engines (heavy fuel oil) 648.5 34.5%Sugarmills (bagasse) 200.7 10.7%Geothermal Plants 36.7 1.9%TOTAL 1,882.1 100.0%

Estimated growth of the electricity demand until 2010 is 8%. The latest additio ns to the power generation capacity have been predominantly thermal plants. Between 1991-2003 the capacity additions were 991 MW, out of which only 103 MW corresponds to hydro and geothermal plants (see Figure 23).

Figure 23. Growth of the installed power generation capacity in Guatemala between 1991 and 2001. Most of the increase is due to thermal plants. Source: Comisión Nacional de Energía Eléctrica (CNEE) www.cnee.gob.gt.

Total electricity generation in Guatemala in 2002 was 6,191 GWh. This was produced by diesel engines using heavy fuel oil (2,215 GWh), hydropower plants (2,110 GWh), steam turbine plants (1,589 GWh), gas turbine plants (147 GWh) and geothermal plants (130 GWh). Electricity imports were 55 GWh. Sugar mills produced 621 GWh and 943 GWh was produced in San José coal fired power plant (see Table 15). Table 15. Electricity generation in Guatemala in 2002. Electricity imports in 2002 were

54.90 GWh. Source: Administrador del Mercado Mayorista (AMM).

39

Technology GWh %Hydropower Plants 2,110.13 34.1%Steam Turbines (heavy fuel oil) 24.46 0.4%Steam Turbines (coal) 943.29 15.2%Gas Turbines (diesel oil) 147.06 2.4%Diesel Engines (heavy fuel oil) 2,215.13 35.8%Sugarmills (bagasse) 621.12 10.0%Geothermal Plants 129.99 2.1%TOTAL 6,191.18 100.0%

According to the General Electricity Law, electricity generation is an open activity and it does not require an authorisation, except for hydropower and geothermal plants. There are separate wholesale markets for power and electricity. Power generators may participate in the wholesale electricity market if their maximum installed capacity exceeds 10 MW. Large consumers are defined as having a power demand exceeding 100 kW. Large consumers are not regulated and they can freely acquire electricity from any generator or seller. The transport fee to be paid for the utilisation of the distribution/transmission infrastructure is freely negotiated between the generator and the transmission/distribution company. In case there is no agreement, the National electricity Commission will decide the fee. National CDM Policy Guatemala ratified the Kyoto Protocol in October 1999. There is no special legislation in place concerning CDM projects or carbon transactions. The Guatemalan Office for Joint Implementation (Oficina Guatemalteca de Implementación Conjunta, OGIC) was created in 1996 before the adoption of the Kyoto Protocol for the pilot AIJ phase. OGIC is in charge of promoting investments in CDM projects, as well as evaluation and approval of proposed CDM projects. The CDM focal point is Ing. Rudy Nájera in the Ministry of Energy and Mines (diredge@mem.gob.gt, tel +502 477 0746). There are a few CDM projects under development in Guatemala, most of them hydropower projects. For example, the Candelaria project is a small-scale 4.5 MW hydropower project in Trece Aguas River with participation of the Japanese Electric Power Development Company (J-POWER). This project was made publicly available for comments through the CDM Executive Board in December 2003. El Canadá project is a 43 MW hydropower CDM project located on the Samala River developed by the Prototype Carbon Fund. The baseline methodology for this project was revised by the Methodology Panel in May 2003 and it was not approved. New methodology is being developed. CO2 Emissions from Power Generation Due to the large share of renewable energy in the Guatem alan power generation mix the weighted average CO2 emissions from electricity generation are relatively low: about 443 kgCO2/MWh. The approximate operating margin (excluding hydro, bagasse and geothermal) is 824 kgCO2/MWh. If electricity imports are included as a zero-emission source, the weighted average and marginal emissions are 439 kgCO2/MWh and 810 kgCO2/MWh, respectively. Table 16 lists the power plants that have entered in service between 2000 and May 2003. According to these figures, the build margin in Guatemala is about 768 kgCO2/MWh. The

40

average of the approximate operating margin (including imports with zero emissions) and the build margin in Guatemala is therefore:

MWhkgCOMWhkgCOff

f buildoperatingcombined /789/

2768810

2 22 =+

=+

=

Table 16. The most recent plants in the Guatemalan power system. These 8 plants installed between 2000-2003 represent 27% of the installed capacity in May 2003. Source: AMM.

Power Plant Installed Technology Capacity, MW PLU, h Production, GWh %

Las Vacas 2002 Hydro 46.8 3,853 180.30

Pasabien 2002 Hydro 12.4 3,593 44.55

Matanzas 2002 Hydro 11.0 4,821 53.03

Poza Verde 2002 Hydro 8.4 3,382 28.41

San Isidro 2002 Hydro 3.4 4,821 16.39

Subtotal Hydro 82.0 4,094 322.68 14.4%

Arizona 2003 Diesel Engine 164.0 5,462 895.75

La Esperanza 2000 Diesel Engine 129.5 581 75.19

Subtotal Diesel Engine 293.5 3,021 970.94 43.4%

San José 2000 Coal Power Plant 136.0 6,936 943.29 42.2%

TOTAL 511.5 4,684 2,236.91 100.0% Emission reduction from Lignum Plant If we estimate that the Lignum Plant power output is 2.3 MW and peak load utilisation 8,000 hours per annum, the annual electricity generation is 18,400 MWh. This corresponds to annual emission reduction of 14,500 tCO2e using combined margin baseline. Possible reduction of the methane emissions related to the use of biomass is not taken into account. With Certified Emission Reduction (CER) prices between 3 – 5 USD/tonne, the emission reduction would have an annual value of USD 43,000 – 72,000. Over a ten-year-baseline period and using a discount rate of 10%, the net present value of the CERs would be USD 267,000 – 445,000.

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4. CONCLUSIONS AND FUTURE ACTIONS As originally assumed the price and availability of the fuel are the criteria which are highly essential for the project feasibility. It has to be also pointed out that the required wood waste amount needed for Biopower 2 with capacity of 2,3 MWe is already quite high, about 15-20 m3/h (4,5-6 t/h) which corresponds to 120-160000 m3/a (36-48000 t/a) if the peak load utilisation is 8000 h. The specific cost of a biopower plant per kWe electricity produced is also rather high as this size of power plant can be considered to be still small scale. The best option for combined heat and power plant (CHP) like Wärtsilä Biopower 2 (or 5) would be a site, not necessarily a sawmill, with high on-site thermal load (1st option). The benefits as well as CO2 reduction are maximised if biomass would substitute for fossil fuels (fuel oil etc.) in the heat production. The total investment costs can be most probably somewhat reduced by selecting smaller power plant which seems to be more suitable for the cases in question with low on-site energy demand (2nd option). Therefore, as far as the potential sawmills are concerned, the focus for the future should be the further discussions with the potential sites and possible manufactures of smaller biopower plants. In addition the option to use logging and thinning residues of forests has to be further studied and clarified especially in Honduras and in Guatemala. However, it has to be remembered, that the initial price indications related to forest residues were clearly higher than the price of similar fuel in Finland. Therefore, the best and viable option related to fuel cost would be to collect the biomass fuel from one single source (sawmill), thus reducing for example the cost of transportation and additional bureaucracy to prepare and update the fuel supply agreements between different actors. The next recommended steps (II stage) concerning the potential sawmills are the further discussions about accurate and correct input data to be able to determine and select capacity wise the most suitable technology. After the final feasibility is clarified , the potential sawmills should be able to confirm the interest in biopower plant project. The different forms of cooperation and set-up of the project has to be also investigated. One possibility is to establish a special purpose company (SPC) which is in charge of the fuel supply agreements (FSA), power purchase agreements (PPA) and the contracts with equipment supplier and the plant operator. In addition SPC handles the financing, negotiations with project partners including potential equity partners as well as emission credits (certified emission reductions (CER)). See Figure 24.

42

SPC

UTILITY

PPA

Equity 30% Debt 70%

EPCCONTRACTOR

INVESTORS

O&MOPERATOR

CER

Security Package:* PPA

* Revolving L/C

* Escrow Account etc. ECA orMultil. Devlp.Agency

FUEL SUPPLIER

FSA

LENDERS

SPC

UTILITY

PPA

Equity 30% Debt 70%

EPCCONTRACTOR

INVESTORS

O&MOPERATOR

CER

Security Package:* PPA

* Revolving L/C

* Escrow Account etc. ECA orMultil. Devlp.Agency

FUEL SUPPLIER

FSA

LENDERS

Figure 24. The concept of Special Purpose Company (SPC) and the main contracts between

the different partners. Our proposal is to proceed with the project design in close cooperation with Steering Committee members and continue the discussions with potential sawmills about concrete measures how to develop further the biopower project. The governmental involvement would give a good picture to all interested parties that there is willingness and motivation also on state level to promote the use of biomass for power production.

43

ANNEX 1 Energy and Environmental Partnership with Central America

Project: Wood based biomass fired BioPower 5 in Central America Date: 09.07.2003 Made by: Wärtsilä - Jari Kartano / Kimmo Siira, partly revised by Jari Hiltunen Document: Project Plan for Stage 1 Distribution: PVO / Juha Poikola, Gaia / Jari Hiltunen, GSN / Tommi Tynjälä 1) General

The target of this plan is to identify and specify 2-3 potential and willing customers for BioPower 5 size, wood based fuel fired project. Besides the fuel, another important criteria is fuel supply possibility as well as economical situation of possible local SPC partners / customers

2) Project Identification – responsible partner Gaia

• Find and establish working relationship with local partners, first contact with BUN-CA and CATIE – then others

• Find and study sawmill report made by CATIE and analyse larger sawmill’s geographical, economical and production situation

• Create a project questionnaire form and invitation letter suitable for the project and distribute it to as many potential customers in the region as possible by utilising local partners and partnership contacts • Name, contact information and location of sawmill • Annual production of ready product • Which kind of wood they process • Annual operation time of the mill • Is the wood waste utilised at the moment

• Organise above mentioned information follow -up and collection with local partners • Process the material received and select up to 10 potential sites for closure

investigation with Wärtsilä Biopower • Visit all selected sites in order to make a site report, economical evaluation of the

customers, Letter of Intent for SPC with the potential customers as well as fuel supply agreement with local producers together with Wärtsilä Biopower

• Based on above, make a preliminary project development with feasibility studies including risk analysis assessment for all selected cases with close co -operation with local partners as well as Wärtsilä Development and Financial Services Oy

• Evaluate CO2 potential for the projects as part of project development

44

3) Project Development Phase– responsible partner Wärtsilä

• Create a project execution plan for next phase (stage 2) application to the steering committee together with other partners

• Find suitable project equity candidates and sell the idea to them • Develop solid financing structure

• Equity share holders • Finnvera export guarantees • Lenders – Finnish / foreign

• Manage the PPA and FSA (financiable) • Participate as an advisor in SPC establishment process

4) Project plan for stage 2 – responsible partner Wärtsilä Biopower

• Make project design and determine technical and commercial values together with other project partners including potential equity partners

• Negotiate EPC delivery contract with new SPC management • Build and commission the plant

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ANNEX 2 SAWMILLS IN NICARAGUA33 No Waste total

m3/year ton/year m3/year ton/year ton/year1 Aserrio la Union 304 178 55 32 882 Aserrio San Vicente 2437 1430 439 257 7063 Coop. HyM San Nicolás 4 3 1 0 14 El Caribe 629 369 113 66 1825 Industria Forestal Santa Elena S.A. 916 538 165 97 2656 Industria Oscar Benavidez 824 484 148 87 2397 Instituto Tecnico Forestal 945 555 170 100 2748 La Esperanza 2608 1531 469 276 7559 San Rafael 121 71 22 13 35

10 Serreria Sula S.A. 2557 1501 460 270 74111 Yo Tengo Fe 577 339 104 61 16712 Aserradero Madriz 4385 2574 789 463 127013 Asociacion Famila Padre Fabreto 240 141 43 25 6914 Aserradero La Union 347 203 62 37 10015 Aserradero Minas de Oro 141 83 25 15 4116 Aserradero Pasmata 178 105 32 19 5217 Aserradero San Miguel 4318 2535 777 456 125118 Aserradero Sta. Emilia 2431 1427 438 257 70419 Aserradero Suyapa 7 4 1 1 220 Aserradero Villa Quezada 70 41 13 7 2021 Aserrio Central de Coop. Forestal 2672 1569 481 282 77422 Aserrío Jalil Zavala Ponce 2344 1376 422 248 67923 Aserrio Jose B. Maradiaga 1714 1006 309 181 49624 Coop. de Productos Forestales RL 430 253 77 45 12525 El Pino 218 128 39 23 6326 Emp. Maderera Amador Ortez,S,A. 579 340 104 61 16827 Empresa Maderera Bermudez S.A 4374 2568 787 462 126728 Empresa Maderera Nicaragüense,S. A. 3845 2257 692 406 111429 Fabrica de Cabos y Escobas 2115 1242 381 224 61330 Industria Maderera San Martin, S.A. 90 53 16 10 2631 Inversiones Maderera S.A 5310 3117 956 561 153832 La Esperanza 299 175 54 32 8633 Madera Sta. Ana S.A 301 177 54 32 8734 Maderas de Nicaragua S.A 2831 1662 510 299 82035 Maderas Industriales Cia.Ltda. 210 123 38 22 6136 Maderas San Nicolas 316 185 57 33 9137 Maderas Segovianas S.A. 9268 5441 1668 979 268438 Maderas y Transportes de Nicaragua,S.A. 1249 733 225 132 36239 Mira Valle 70 41 13 7 2040 Pinotea,S.A. 3605 2116 649 381 104441 San Judas Tadeo 4533 2661 816 479 131342 Segovia Lumber Co. S.A 331 194 60 35 96

Total 70745 41527 12734 7475 20489

Sawmill NameLumber production Other wood products

Some 6 very neared sawmills (17, 28, 34, 37, 40, 41), with potential to go forward for a power generation project leading by MADESA

33 Basic Information Concerning Biomass Availability in Sawmills and Electricity Market features from Nicaragua and Honduras, report carried out for Central American Biopower Project in 2003 by Proleña

46

ANNEX 3 SAWMILLS IN HONDURAS34 YORO region

Note: Around 91% of lumber 2002 production was concentrated in 4 sawmills, Yodeco, Matagua, Foresta, Inmarsa

34 Basic Information Concerning Biomass Availability in Sawmills and Electricity Market features from Nicaragua and Honduras, report carried out for Central American Biopower Project in 2003 by Proleña

Waste total1000pt/year m3/year ton/year 1000pt/year m3/year ton/year ton/year

1 LA ANTORCHA 30 70 41 3 8 5 82 ZUNIGA 143 337 198 17 39 23 373 GABRIELA ALEJANDRA 217 511 300 25 59 35 554 EL PORVENIR 70 165 97 8 19 11 185 BORJAS Y SUCESORES 56 132 77 6 15 9 146 IND. Y COMERCIAL JIREH 91 214 126 11 25 15 237 SARANGANI 90 213 125 10 25 14 238 NATARAHEN 42 98 58 5 11 7 119 PROMABO 1 2 1 0 0 0 0

10 INMARSA 2974 7016 4118 345 813 477 76111 MANVAL # 2 182 429 252 21 50 29 4712 MADERERA DIAZ 38 90 53 4 10 6 1013 INMALE 180 424 249 21 49 29 4614 PATRICIA 695 1640 962 81 190 112 17815 MORAZAN 622 1467 861 72 170 100 15916 FORESTA BETA 8043 18974 11136 933 2200 1291 205817 YODECO DE HONDURAS 31188 73571 43177 3616 8530 5006 797918 MATAGUA 6441 15194 8917 747 1762 1034 164819 MADERA MARIELA 218 515 302 25 60 35 5620 VELOMATO 702 1656 972 81 192 113 18021 MADEHROS 113 266 156 13 31 18 2922 MAD. DAMARIS 13 30 18 1 4 2 323 MADERAS SAN CARLOS 83 197 115 10 23 13 2124 CODINACO 6 13 8 1 2 1 125 INDUSTRIAS ANACY 774 1826 1072 90 212 124 19826 SAN ISIDRO 13 30 18 1 3 2 327 ASERRIOS DE YORO 48 114 67 6 13 8 1228 INDERMA 222 525 308 26 61 36 57

Total 53294 125719 73781 6179 14576 8554 13635

No Sawmills nameOther wood productsLumber production

47

TALANGA region

No Waste total1000pt/year m3/year ton/year 1000pt/year m3/year ton/year ton/year

1 SANSONE # 1 4796 11315 6640 556 1312 770 12272 SANSONE # 3 6345 14968 8785 736 1735 1018 16233 CORRALITOS 1598 3771 2213 185 437 257 4094 SANTA FE 23152 54616 32053 2684 6332 3716 59235 ESMERALDA 119 280 165 14 33 19 306 IMAGUA 1246 2939 1725 144 341 200 3197 I.A.I. IND.MADERA BIJAO (INMABI) 268 633 371 31 73 43 698 EL ROSARIO 156 368 216 18 43 25 40

Total 37682 88891 52168 4369 10306 6048 9641

Sawmill NameOther wood productsLumber production

Note: Around 91% of lumber production 2002 was concentrated in 3 sawmills, Sansone 1, Sansone 3, and Santa Fe

48

ANNEX 4 STATIONARY SAWMILLS IN GUATEMALA35

Name Region Place

ASERADERO EL PORVENIR SACATEPEQUEZ SA LUCS SACATEPEQUEZ

ASERRADERO ALAN CHIMALTENANGO TECPAN GUATEMALA

ASERRADERO AMERICANO, S.A. GUATEMALA GUATEMALA

ASERRADERO BENAIA ZACAPA GUALAN

ASERRADERO BERLY CHIMALTENANGO CHIMALTENANGO

ASERRADERO BUENA VISTA IZABAL LIVINGSTON

ASERRADERO BUENOS AIRES EL PETEN LA LIBERTAD

ASERRADERO C.I.E.M.A. JALAPA JALAPA

ASERRADERO CENTROAMERICANO CHIMALTENANGO TECPAN GUATEMALA

ASERRADERO CIEMA JALAPA JALAPA

ASERRADERO DE MADERA S DURAS VERAPAZ, S.A ALTA VERAPAZ SANTA CRUZ VERAPAZ

ASERRADERO DEHA EL PETEN POPTUN

ASERRADERO DIDEMA CHIMALTENANGO TECPAN

ASERRADERO DON ARTURO CHIMALTENANGO CHIMALTENANGO

ASERRADERO DOS MIL UNO CHIMALTENANGO PATZICIA

ASERRADERO E INDUSTRIA BOSQUE VERDE SACATEPEQUEZ SUMPANGO

ASERRADERO EBEN-ESER CHIMALTENANGO TECPAN GUATEMALA

ASERRADERO EBENEZER SACATEPEQUEZ PASTORES

ASERRADERO EL ALAMO GUATEMALA MIXCO

ASERRADERO EL BARATERO GUATEMALA GUATEMALA

ASERRADERO EL BOSQUE CHIMALTENANGO CHIMALTENANGO

ASERRADERO EL BOSQUECITO GUATEMALA GUATEMALA

ASERRADERO EL CUJE CHIQUIMULA QUETZALTEPEQUE

ASERRADERO EL DIVINO MAESTRO CHIMALTENANGO TECPAN GUATEMALA

ASERRADERO EL ESFUERZO GUATEMALA GUATEMALA

ASERRADERO EL ESFUERZO QUETZALTENANGO QUETZALTENANGO

ASERRADERO EL HIGUERITO IZABAL LIVINGSTON

ASERRADERO EL PINAL JALAPA MATAQUESCUINTLA

ASERRADERO EL PORVENIR GUATEMALA GUATEMALA

ASERRADERO EL ROBLE, SOCIEDAD ANONIMA JALAPA JALAPA

ASERRADERO EMANUEL CHIMALTENANGO CHIMALTENANGO

ASERRADERO ESFUERZO QUETZALTENANGO QUETZALTENANGO

ASERRADERO EVECLE CHIMALTENANGO ZARAGOZA

ASERRADERO FRANCIS QUETZALTENANGO QUETZALTENANGO

ASERRADERO GARCIA GUATEMALA FRAIJANES ASERRADERO GOMEZ SAN MARCOS SAN PEDRO

SACATEPEQUEZ ASERRADERO ITALIANO GUATEMALA Y CARPINTERIA

GUATEMALA GUATEMALA

ASERRADERO ITALIANO GUATEMALA Y CARPINTERIA

GUATEMALA GUATEMALA

ASERRADERO ITALIANO Y CARPINTERIA GUATEMALA GUATEMALA ASERRADERO J.M. CONTENTI F. GUATEMALA GUATEMALA

ASERRADERO JUAREZ EL QUICHE SANTA CRUZ DEL QUICHE

ASERRADERO KAIBIL EL PETEN POPTUN

35 Only the sawmills under name “aserradero” listed. Complete list available at www.inab.gob.gt

49

ASERRADERO LA BENDICION EL PROGRESO SAN AGUSTIN ACASAGUASTLAN

ASERRADERO LA CABAÑITA BAJA VERAPAZ SALAMA

ASERRADERO LA JOYA CHIMALTENANGO ZARAGOZA

ASERRADERO LA MERCED SOLOLA SOLOLA

ASERRADERO LA PROVIDENCIA BAJA VERAPAZ SALAMA

ASERRADERO LA ROOSEVELT GUATEMALA MIXCO

ASERRADERO LA SELVA GUATEMALA GUATEMALA

ASERRADERO LA UNION GUATEMALA GUATEMALA

ASERRADERO LAS ILUSIONES AJSIVINAC GONZALEZ

CHIMALTENANGO PATZICIA

ASERRADERO LOPEZ GUATEMALA FRAIJANES

ASERRADERO LOS PLANES GUATEMALA VILLA NUEVA

ASERRADERO LOS ARBOLITOS GUATEMALA MIXCO

ASERRADERO LOS CEDROS GUATEMALA SAN JOSE PINULA

ASERRADERO LOS CEREZOS CHIMALTENANGO TECPAN GUATEMALA

ASERRADERO LOS GUAYACANES EL PROGRESO SAN AGUSTIN ACASAGUASTLAN

ASERRADERO LOS OLIVOS CHIMALTENANGO COMALAPA

ASERRADERO LOS OLIVOS CHIMALTENANGO SAN JUAN COMALAPA

ASERRADERO LOS PINARES CHIMALTENANGO CHIMALTENANGO

ASERRADERO LOS PINOS CHIMALTENANGO CHIMALTENANGO

ASERRADERO LOS PINOS GUATEMALA SANTA CATARINA PINULA

ASERRADERO MADERAS DE OCCIDENTE CHIMALTENANGO SAN JUAN COMALAPA

ASERRADERO MADERAS DEL SUR RETALHULEHU

ASERRADERO MADERAS QUICHE EL QUICHE PACHALUM

ASERRADERO MAYA GUATEMALA GUATEMALA

ASERRADERO MAZARIEGOS CHIMALTENANGO TECPAN

ASERRADERO MERIDA SAN MARCOS SAN MARCOS

ASERRADERO MOBIL Y CARPINTERIA BARREONDO

EL QUICHE CHINIQUE

ASERRADERO MONTE DE SION CHIMALTENANGO PATZUN

ASERRADERO MORALES CHIMALTENANGO PATZICIA

ASERRADERO NAZARETH CHIMALTENANGO CHIMALTENANGO

ASERRADERO NICOL´S GUATEMALA SAN PEDRO SACATEPEQUEZ

ASERRADERO OROZCO SAN MARCOS SAN PEDRO SACATEPEQUEZ

ASERRADERO PANABAJAL CHIMALTENANGO COMALAPA

ASERRADERO PETAPA, S.A. GUATEMALA GUATEMALA

ASERRADERO PORTATIL SANTIAGUITO SANTA ROSA CHIQUIMULILLA

ASERRADERO PROMADERA ALTA VERAPAZ COBAN

ASERRADERO SALAMA BAJA VERAPAZ SAN JERONIMO

ASERRADERO SAN CARLOS GUATEMALA MIXCO

ASERRADERO SAN ISIDRO CHIMALTENANGO PATZUN

ASERRADERO SAN JOSE ALTA VERAPAZ SANTA CRUZ VERAPAZ

ASERRADERO SAN JOSE ZACAPA SANTA CRUZ RIO HONDO

ASERRADERO SAN JUAN GUATEMALA SAN JUAN SACATEPEQUEZ

ASERRADERO SAN LUCAS SACATEPEQUEZ SAN LUCAS SACATEPEQUEZ

ASERRADERO SAN MIGUEL CHIMALTENANGO EL TEJAR

ASERRADERO SAN NICOLAS EL PETEN SANTA ELENA

ASERRADERO SAN RAYMUNDO GUATEMALA GUATEMALA

ASERRADERO SAN ROQUE GUATEMALA ZONA 11, GUATEMALA

50

ASERRADERO SAN ROQUE GUATEMALA GUATEMALA

ASERRADERO SAN SIMON CHIMALTENANGO SANTA APOLONIA

ASERRADERO SANTA CECILIA EL PETEN POPTUN

ASERRADERO SANTA ELENA CHIMALTENANGO TECPAN

ASERRADERO SANTA INES GUATEMALA GUATEMALA

ASERRADERO SANTA MARGARITA CHIMALTENANGO SANTA APOLONIA

ASERRADERO SANTA MARGARITA GUATEMALA GUATEMALA

ASERRADERO SANTA MARIA EL PETEN POPTUN

ASERRADERO SANTA RITA BAJA VERAPAZ SAN JERONIMO

ASERRADERO SANTA ROSA CHIMALTENANGO CHIMALTENANGO

ASERRADERO SANTIAGO ZACAPA GUALAN

ASERRADERO SINAY GUATEMALA MIXCO

ASERRADERO VALDEZ RAMIREZ EL PROGRESO SAN AGUSTIN ACASAGUASTLAN

ASERRADERO VASQUEZ GUATEMALA MIXCO

ASERRADERO XOLLIM ALTA VERAPAZ SANTA CRUZ

ASERRADERO Y CARROCERIAS MADERAS DE CENTRO AMERICA

CHIMALTENANGO EL TEJAR

ASERRADERO Y FABRICA DE CARROCERIAS NISSI SAN MARCOS SAN MARCOS

ASERRADERO Y TRANSPORTE DE CARGA SAN JOSE

CHIQUIMULA CHIQUIMULA

ASERRADERO ZOILY HUEHUETENANGO HUEHUETENANGO

ASERRADERO,DISTRIBUIDORA Y CARPINTERIA WENDY

GUATEMALA GUATEMALA

ASERRAERO GUATEMALA GUATEMALA GUATEMALA