Report Ministry of Foreign Affairs of Finland, Energy and Environment
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Report 60K30025.05.q220-001 June 6, 2008 Ministry of Foreign Affairs of Finland, Energy and Environment Partnership with Central America Peat deposits in Bocas del Toro and their use for electricity production in Panama 60K30025.05.q220-001 1 Copyright © Pöyry Energy Oy All rights are reserved. This document or any part thereof may not be copied or reproduced without permission in writing from Pöyry Energy Oy Copyright © Pöyry Energy Oy 60K30025.05.q220-001 1 Preface Energy and Environment Partnership with Central America was established as follow up to the cooperation activities of the Government of Finland with Central America. The launching of this Partnership was carried out during the United Nations World Summit on Sustainable Development in Johannesburg 2002, and the main objective of this initiative is to promote in Central America the use of renewable energy sources and clean technologies in a sustainable way, as well as to make the energy services more accessible to the rural population. The Steering Committee of the Energy and Environment Partnership with Central America accepted to finance the project to study peat deposits and their use in eelectricity generation in Bocas del Toro, Panama. The project has been carried out by Pöyry Energy Oy, together with the local counterpart, Autoridad Nacional del Ambiente (ANAM). The project report “Peat deposits in Bocas del Toro and their use for electricity production in Panama” (60K30025.05.q220-001), has been prepared by Mr. Aimo Vitikka and Mr. Pentti Leino from Pöyry Energy Oy. The peat geologist, Dr. Hannu Pajunen from the Geological Survey of Finland has reviewed peat resource inventories in the project area. The project team, Mr. Leino, Mr. Vitikka and Mr. Pajunen visited Panama from 7th to 14th May, 2008. The purpose of the visit was to meet relevant stakeholders, to be acquainted with the Panamanian energy system and energy policy, to collect data, including maps, to collect peat samples from Changuinola. Due to the security situation in the project region during visit, samples could not be collected and therefore peat geologist Dr. Hannu Pajunen concentrated on analyzing results of the previous investigations. Institutions, authorities and companies visited included CATHALAC, Empresa de Transmision Electrica, S.A. Reunion con la Autoridad Nacional del Ambiente, Ministerio de Comercio e Industria, Comision de Politica Energetica and Reunion con el Promotor de Proyecto, Changuinola PEAT S.A./Lakas Group. Senior Scientist, Project Manager, Ms. Lilian Suarez from Cathalac coordinated activities during the trip, while Cooperation Officer, Ms. Roxana Segundo took care of translation, when needed. Pöyry Energy will acknowledge Ms. Lilian Suarez, and Ms. Ms. Roxana Segundo, as well as Ms. Darysbeth Martinez, and other personnel of ANAM for a good cooperation during the project work in Panama. Pöyry Energy Oy Espoo, Finland 6.6.2008 Copyright © Pöyry Energy Oy 60K30025.05.q220-001 2 ABBREVIATIONS ANAM Autoridad Nacional del Ambiente Btu British thermal unit CATHALAC Water Center for the Humid Tropics of Latin America and the Caribbean ETESA Empresa de Transmision Electrica, S.A. GDP Gross Domestic Product Gcal Giga Calorie GJ Giga Joule GPS Global Positioning System GSF Geological Survey of Finland GWh Giga Watt hour H1-H10 Decomposition degree (Von Post) IHRE Instituto de Recursos Hidraulicos y Electrificacion MC Moisture content MJ Mega Joule MWh Mega Watt hour SNT Sistema Nacional de Transmisión TWh Tera Watt hour Toe Ton of oil equivalent TPES Total primary energy supply CONVERSION FACTORS Toe MWh GJ Gcal toe 1 11.63 41.868 10 MWh 0.086 1 3.6 0.86 GJ 0.02388 0.27788 1 0.2388 Gcal 0.1 1.163 4.1868 1 PREFIX k = kilo = 1 000 M = mega = 1 000 000 G = giga = 1 000 000 000 T = tera = 1 000 000 000 000 CALORIFIC VALUES OF VARIOUS ENERGY SOURCES Fuels Unit GJ MWh toe Heavy fuel oil T 40.60 11.278 0.970 Light fuel oil T 42.50 11,806 1.015 Diesel oil T 41.50 11.528 0.991 Hard coal T 25.21 7.003 0.602 Lignite T 11.30 3.139 0.270 Natural gas 1000 m3 36.00 10.00 0.860 Firewood T 12.00 3.330 0.300 Charcoal T 29.00 8.060 0.710 Wood chips Loose- m3 4.60 0.903 0.078 Forest residues T 8.64 2.400 0.206 Milled peat (45% MC) T 10.30 2.86 0.250 Sod peat (30% MC) T 13.80 3.83 0.340 Copyright © Pöyry Energy Oy 60K30025.05.q220-001 1 Summary Energy sector development in Panama The restructuring and privatization of Panama's state-owned electricity company IRHE was completed in 1998 with the sale of four electricity generation companies. The Government of Panama retained ownership and control of the transmission company, ETESA. Transmission network has open access and regulated rates. ETESA has been authorized by the Ente Regulador de los Servicios Públicos to provide the public service of high voltage electric energy transmission through a concession contract Panama has negligible hydrocarbon energy reserves and imports over 70% of its energy. Virtually all oil is imported, and the country neither produces nor consumes natural gas. The total primary energy supply is heavily dependent on exported oil; the proportion of oil is about 72%. Electricity consumption in Panama has increased on average more than 5% per year during the last decades, amounting 5.8 TWh (2006). The most important consumption sector is service sector, it accounts for 50% of all electricity consumption. The proportion of industry is quite small, only 5% of total electricity consumption. Some 60% of electricity is generated in hydropower plants, and 40% in oil-fired thermal power plants. Due to the increasing price of fuel oil, there will be a need to convert oil- fired condensing power generation to alternative fuels e.g. to coal and peat in Panama. Bocas del Toro province, the target area for peat production The province of Bocas del Toro is situated in the north-western part of Panama, on the Caribbean coast. The population of the province is 110,585, i.e. 3.3% of the total population in Panama (in 2007). The capital of the province, Bocas del Toro, is located on the island of Colon. The main activity in the province is connected to the primary sector, which accounts for the 70% of the GDP of the province. Bocas del Toro province is the main area in Panama, which has potential to develop peat production. The areas of biggest interest are the deposits in the towns of Changuinola and Almirante, and another close to the village of Chiriquì Grande. Most of the studies have been carried out in Changuinola – Almirante site. The results encouraged the company Changuinola PEAT S.A. to request two mining concessions to evaluate both the Changuinola – Almirante and the Chiriquì Grande regions, and estimate their energetic potential. Peat resources and utilization in Changuinola The Changuinola peat deposit was reported to cover more than 8,200 ha (Cohen and others 1990). According to Phillips and Bustin (1996a) about 6,000 ha is located onshore and 2,000 ha offshore beneath the shallow marine sediments of Almirante Bay. When selecting the most potential area for peat production, the offshore section must be excluded. The peat deposit can be divided to the western and eastern sections. In the west peat is good for fuel whereas in the east peat quality is poor. The eastern section must be excluded because of poor peat quality. The remaining 3,800 ha includes the domed Copyright © Pöyry Energy Oy 60K30025.05.q220-001 2 western section. This peat dome is eccentric with the highest surface elevations in the south-west. In the north-east, surface elevation is lower and the area borders to Caribbean beach barrier. Because of lower surface elevation, the north-eastern part of the western section, covering approximately 800 ha, should be excluded. Compared to other coastal areas in tropical environment, the peat is better than Jamaican, Senegalese, or Sri Lankan peat but not quite as good as Indonesian peat. The western section of Changuinola peat deposit and the Mempawah peat deposit in Indonesia resemble each other because both of them are out of the reach of sea water or clastic deposition. In spite of the huge difference in environmental setting, the quality of Changuinola peat is close to that of the Finnish peat. Comparison of water content, dry bulk density, ash content and sulphur content in certain subtropical/tropical coastal areas and in Finland Area Water content Dry bulk density Ash content Sulphur content (%) (kg/m3) (%) (%) Changuinola peat deposit1) 92.7 n.a. 3.3 0.23 Jamaica, Negril Morass2) 90.0 n.a. 16.0 1.6 Senegal, Niayes3) 87.6 125 16.0 Sri Lanka, Muthurajawela 89.4 82 14.9 4.6 Indonesia, Mempawah 90.0 95 0.39 0.13 Finland, average4) 90.8 87 3.4 0.20 1) Phillips and Bustin 1996a, western section, 2) Blackwood & Robinson 1985, 3) Korpijaakko 1985, 4) Virtanen et al. 2003 Los Alamos study considered both conventional peat production method, i.e. milled peat method, as well as wet mining method to be applied in Changuinola – Almirante. Milled peat production assumed that peat with a moisture content of 50% would be transported by truck to the power plant located next to the bog. The assessment of the wet mining process was based on a report done by Wheellabrator-Frye for the state of Alaska on wet mining peat for use in a peat-derived-fuel production facility. Los Alamos study concluded in 1990 that considering the projected electricity demand in Changuinola, a 30 MWe power plant size would be optimal.