Opportunity for Ethanol Fuel Production in Ethiopia
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Metahara Sugar Factory in Oromia Regional State 200 km from Addis Ababa. 10,000 ha sugar under cultivation. Distillery capacity of 12.5 million liters/year Opportunity for Ethanol Fuel Production in Ethiopia Bioethanol as a Clean Cooking Fuel 8th Bioenergy Week, 16 – 18 March 2021 What does ethanol offer as a cooking fuel? Technically simple – Ethanol cooking fuel is straight forward. While fuel blending with gasoline is complicated and must have upgraded fuel infrastructure, stove fuel sales and handling are straight forward. Lucrative market for producers – Ethanol for cooking can support prices equal to or better than blending. Scalable market – The cookstove fuel market is as big or bigger than the blending market. A 5% penetration of stoves in Addis Ababa would demand 50 million liters of ethanol per year. Dependable market – Once people cook with ethanol, they depend on it. Demand will not go away, only increase. Import substitution – Ethanol is a modern, clean, local fuel. It is an excellent replacement for both LPG and kerosene. Ethanol stoves can be made locally. Social dividends – The payback to society is high. The Ethiopian Sugar Corporation becomes even more important to the nation than it already is. Why Cooking with Ethanol? Cooking represents 70% to 90% of total energy demand in most developing countries. UN agencies and NGOs have been trying to address this need with “improved combustion” wood and charcoal-burning stoves. These have largely failed to deliver. The World Health Organization is calling for cleaner-burning stoves. Thus, a new approach is needed. Why Ethanol for cooking? The consumer: Ethanol is already a cost-competitive and consumer-tested fuel • Many developing countries have an urgent need for more energy in the cooking sector. • The ever-increasing use of fuelwood and charcoal for cooking is impacting human health, local environments and contributing to climate change. • There is no substitute to liquid fuels for efficiency, mobility and cost of delivery. Direct heating with liquid fuel is the cheapest, most efficient way to deliver energy for cooking, especially to hard to access areas. • Kerosene is losing favor because it is a dirty, dangerous fuel—causing many burns and fires. LPG, a great cooking fuel, can be difficult and expensive to deliver. • Kerosene and LPG are imported fuels, demanding scarce FOREX. This is costly for countries with soft currencies. While kerosene and LPG may need subsidies, ethanol needs no subsidy. • Ethanol fuel today is competitive with the cost of purchased fuelwood, charcoal and kerosene. Because the price of these fuels has risen to $1.00 or more per day, ethanol can compete effectively with these fuels. • Ethanol can enter the market without subsidies. But if VAT is charged selectively on some fuels but not others, it is good for ethanol to enjoy equal treatment. 4 Why Ethanol for cooking? The producer: Cooking fuel is the largest and easiest fuel market for producers • Greater supply of energy, in the form of a convenient, practical fuel, needs to be attracted into the household sector. There are limitations with all existing fuels, electricity, charcoal, kerosene, wood and LPG. Ethanol is greatly needed. • The household energy market is huge—and less demanding technically than fuel blending for transportation. Producers can make money in this market. • The household energy sector is overlooked by business leaders and policy makers, and it has long been overlooked by ethanol producers. Stop thinking beverage. Start thinking fuel. • The cooking market provides diversification for producers. It is a supplier’s market; once demand is built, the market will not go away. • The cooking fuel market is stable and predictable. • Ethanol fuel can use the kerosene infrastructure. As kerosene leaves the market, bioethanol can take the place of kerosene with limited infrastructure investment . • To compete in today’s world, sugar producers must produce not just sugar but also ethanol and power. The nation needs fuel. • Cooking is a good market for ethanol producers. It puts a human face on what they do. 5 Lessons from the Global Tracking Framework: Cooking fuel is the largest and easiest fuel market for producers Losing ground: In Africa, of 29 million new people added in 2012-14, only 4 million had some access to clean energy, while 25 million did not. Hardly gaining: In Asia, of 94 million new people added during the same period, 54 million had access to clean energy while 40 million did not. Of 3.04 billion people without access to clean energy, 807 million are in Sub-Saharan Africa and 2.1 billion in Asia. We cannot not solve the problem of cooking and energy access only with LPG or more efficient use of wood and charcoal stoves. We need another clean fuel option in addition to LPG. And we need a fuel that is produced locally, within the Tanzanian economy that does not demand the use of FOREX. 6 Why ethanol, why alcohols? A little chemistry ethanol methanol 7 Kerosene has too much carbon. LPG has less. And ethanol, even less. Plus, an oxygen! Kerosene is a mixture of hydrocarbons with number of carbon atoms ranging from 6 till 16. Its chemical formula might look like this: C16H32. All of this carbon takes a lot of oxygen to burn up. It is the unburned carbon which causes smoke and soot. LPG is a mixture of prominently two hydrocarbons propane (C3H8) and butane (C4H10). So, although a fossil fuel, LPG burns much cleaner. 8 The Problem of Black Carbon Black carbon (BC) from incomplete biomass and fossil fuel combustion is the most strongly light-absorbing component of particulate matter (PM) air pollution and the second most important climate-forcing human emission. It is estimated to contribute 25 to 50% of carbon dioxide warming globally. Studies show that proximity to highways and smoke from cookstoves are major risk factors in human health. If you live near a busy road and cook with wood or charcoal, or your neighbors do, you are at risk. Black carbon has local climatic effects. It disrupts weather patterns. It causes crop damage from surface dimming that results as airborne black carbon moves across the land and intercepts sunlight. 9 Rural cooking smoke is making Delhi air pollution worse (Oct. 26, 2017) Ambient air pollution in Delhi has worsened. Multiple sources contribute to this increase, including industry, transport, dust, waste burning, seasonal crop burning (outside Delhi), power plants, and diesel generator sets. One often overlooked source is coming from the homes of people living beyond Delhi's city limits. That source is cooking and space heating using solid fuels. http://cleancookstoves.org/about/news/10-26-2017-rural-cooking-smoke-is-making-delhi-air- pollution-worse.html Addis Ababa’s annual average concentration of fine particulate matter (PM2.5) is three times the World Health Organization (WHO) guidelines. This is raising serious health concerns among its residents. A 2017 Global Burden of Disease Study showed that air pollution is the second highest risk factor for death and disability in Ethiopia. It is estimated to be responsible for 2,700 deaths annually in Addis Ababa alone. Without action to control air pollution, this figure is estimated to rise to 6,200 deaths annually by 2025. Addis Ababa’s major air pollution sources are transport, industry, waste management facilities, and smoke from household cooking. Source: https://breathelife2030.org/news/addis-ababa-ethiopia- celebrates-first-international-day-clean-air-blue-skies/ 11 Every morning and evening, Addis Ababa fills with smoke from cooking fires. India’s urban pollution must serve as warning to African cities. 12 Ethiopia’s Ambitious Sugar and Ethanol Production Plans Thirteen sugar factories planned, under construction or operating, with a projected 3.6 million mt of sugar, 339 million liters ethanol, and 250 MW excess power to the grid. Current production, about 400,000 mt sugar and 21 million liters ethanol. (Current sugar demand 720,000 tons.) 13 Sugar Factory Sugar Ethanol Electricity Status Finchaa Sugar Factory 270,000 mt 20 million liters, producing 31 MW, 10 MW to grid Operating, producing ethanol Metahara Sugar Factory 136,000 mt 12 million liters, producing 9 MW Operating, producing ethanol Wonji Shoa Sugar Factory 220,000 mt 12.8 million liters, projected 31 MW, 20 MW to grid Sugar factory modernization completed. Omo-Kuraz Sugar 1,250,000 mt 140 million liters, projected 225 MW, 145 MW to grid Two plants completed, two under Factories I, II, III and IV total total construction Kessem Sugar Factory 260,000 mt 30 million liters, projected 26 MW, 15 MW to grid Producing sugar and power Tendaho 300,000 mt 31 million liters, projected 60 MW, 38 MW to grid Sugar production trials completed Arjo Diddessa 230,000 mt 12 million liters, projected Operating Wolkaiyt Sugar Factory 484,000 mt 41.6 million liters, projected Construction 95% completed Tana Beles Sugar, 2 plants 484,000 mt 40 million liters, projected 45 MW, 25 MW to grid Production in 2019 400,000 mt 21 million liters Imported 410,000 tons sugar in 2019 Eventual capacity 3,634,000 mt 339 million liters 250 MW to grid Current: ENA, REN and fuel uses. Current demand 720,000 mt 6 – 10 million liters used in blending Source: https://etsugar.com/projects/ 14 Ethanol Supply Chain Ethanol moves efficiently by tanker truck from the distillery to a fuel depot on the city outskirts 15 A stove manufacturing company, A&H Development Solutions, is ready to manufacture the ethanol stove and distribute both stoves and fuel widely in Addis Ababa, as soon as government authorities agree to allocate ethanol for stove fuel. An ethanol stove carbon finance program is ready to subsidize stove purchases for consumers.