The investment analyzed in this work aims to produce electricity with the aim of saving fuel, which fully corresponds to the Energy Revolution that is taking place in our country.
The investment analyzed in this work aims to produce electricity with the aim of saving fuel, which fully corresponds to the Energy Revolution that is taking place in our country.
For Cuba, 2006 opens as the year of the energy revolution and, accordingly, a strategy is defined that conceives the assurance of supply by taking advantage of as many possibilities as possible.
Although this investment has not been made precisely within this revolutionary process, it can be included in it, since the objectives correspond and also both fulfill the same functions.
As a partial conclusion, it can be said that an ex post evaluation was carried out, consisting of a comparison between what was planned and what actually happened with the assembly of two turbo generators of electricity at the Melanio Hernández Sugar Company. After carrying out this procedure, it can be concluded that the implementation of this project was totally feasible taking into account the fundamental economic terms, in addition to constituting an aspect of utmost importance due to the importance of investments from the energy point of view in the current moments where an energy revolution is taking place in our country with the aim of saving economically.
Introduction
In 1992, 43% of the petroleum fuels consumed by the country were destined for electricity generation, which is why it constitutes one of the main objectives of energy insurance due to the widespread use, versatility and decisive influence in the development of the economy and the well-being of the population.
The feasibility of converting national energy sources into electricity and the existence of a strong Electro-energy System that reaches practically all corners of the country, make it possible to make the most of these sources.
The planned actions are aimed at replacing imported fuels as much as possible in generation and being able to generate a level of electricity similar to that of 1989.
For this objective it will be necessary:
- The application of efficiency measures in the generation, distribution and end use of electricity. The maximum economic exploitation of the current capacities of the Electric Industry using national crude, Varamulsion and extra-heavy fuel oil. The development of the generation in the Sugar Industry through the maximum use of bagasse and sugar cane agricultural residues.
The Sugar Agroindustry, while constituting an important source of food and the first exportable item in the country, is a strategic component of the development of national energy sources in the search for technically-economically viable solutions to energy needs.
A harvest of 70 million tons of sugarcane produces 20.5 million tons of bagasse and a similar amount of sugarcane agricultural residues -straw, bud and leaves-, of which about 6 million are separated in the collection and cleaning centers..
Currently, the Sugar Industry and its derivatives consume around 19 million tons of bagasse, to satisfy 74% of the energy demand of the Ministry of Sugar, including all its activities. Of the remaining 1.5 million, most of it goes to paper and board production.
Of the 6 million tons of agricultural cane waste separated, around 1.8 million are used for animal feed and composting, some 200 thousand tons, mainly straw, were used as fuel in 1992 and 4.3 million are still burned without profit in the collection and cleaning centers.
The current design efficiency of the existing boilers in the industry is, on average, 65% and the steam consumption schemes are between 450 and 500 kg / ton of ground cane. Today, the technologies and equipment produced in the country would increase the efficiency of steam generation by up to 80% and reduce its consumption in the technological process to about 380 kg / ton of cane.
In this sense, the present work sets out to evaluate the effectiveness of an investment in the sugar sector in Sancti - Spíritus through a comparative analysis of the forecasts made and the actual results.
Case study
Background
The progressive generalization of these lines, contemplated in the Ministry's Energy Program, would allow, in addition to satisfying the energy requirements of the industry itself and those of the paper and board plants, to additionally dispose of 4.6 million tons of bagasse, equivalent to about 850 thousand tons of conventional fuel.
The available potential of agricultural sugarcane residues is about 4.3 million tons, equivalent to about 700 thousand of conventional fuel, which could be used once the most efficient technologies and equipment for handling and consumption have been developed, in what they are currently working on. various institutions. Works for compaction in briquettes and coal production are especially important due to their possible use as fuel for cooking food, social and domestic.
The modernization of the energy equipment of the sugar mills and the reduction of their energy consumption, in addition to its beneficial effect on the sugar harvest, will result in the most efficient use of bagasse and will make it possible to take advantage of agricultural residues, which would make it possible to dispose of the equivalent of almost 1.6 million tons of conventional fuel each year, in the form of renewable carriers, as a consequence of harvesting.
The existence of the National Electro-energetic System, of which the power plants are part, the experience achieved by the Ministry of Sugar in cogeneration and the characteristics of steam consumption in the production of the main derivatives, make the route faster and more convenient for the use of the bagasse potential and sugar cane agricultural residues is the production of electricity. To this objective should be added the decrease in electricity consumption in the sector and fuel oil in the derivatives industry.
In relation to the production of electricity in sugar plants, it is necessary to bear in mind:
- The technical and economic benefits that for the National Electro-energetic System derive from the increase of the decentralized generation in the mills, mainly the greater stability in the operation, reduction of the transmission losses and decrease of the reserve requirements. The need to complete the replacement of obsolete energy equipment carried out by the Ministry of Sugar for years, since, in order to take full advantage of the indicated potential, it is necessary, among other measures, to introduce condensation in the generation of electricity and reduce the energy consumption in the industrial process, all of which is aimed at modernizing the power base of the plants.
The Energy Program of the Ministry of Sugar contemplates:
In the first stage, go on to produce the electricity that the Agency demands and continue reducing the rates of fuel oil consumption in the refining and derivatives productions.
For this, the facilities in process, among others, those of the 42 turbogenerators, the synchronization of 19 mills and the expansion of the links of 15 to the National Electro-Energetic System, the assembly of 20 radio plants and the relocation of small turbos must be completed. in derivatives factories.
Also immediately, studies must be completed and specific measures must be applied at each plant to increase efficiency in the use of fuels, as well as the use of installed generation capacity, regulation of exhaust steam and the reduction of electricity consumption in order to progressively decrease, until eliminated, the electricity consumption of the National Electro-energy System at the end of the period.
On the other hand, it is of the utmost importance to finish the studies carried out with the Ministry of Basic Industry to transfer condensing turbos of small power to the plants, in order to start these works in the period itself, installing at least one 5 MW unit. Feasibility studies for the possible transfer of the 50MW and smaller blocks should also be continued, as well as those related to the modernization of boilers and turbos to determine their most convenient parameters.
In this period it is also necessary to deepen the knowledge of new energy technologies, including biomass gasification, about which there are very promising initial international results, in order to determine their possible experimental introduction.
The stability and permanent improvement of the personnel that operate the energy equipment of the industry is decisive for the achievement of the proposed objectives, so it will be maintained with the utmost attention.
In the second stage, to the extent that it executes its energy program and manages to increase its installed capacity for electricity generation, the Agroindustria Azucarera will stably increase its deliveries to the National Electro-energy System.
During this period, the possibility of using peat as a second fuel to generate would be cleared, and the use of sugarcane agricultural residues for the same purpose would be increased, which would further increase the participation of this sector in electricity generation.
This industry and that of its derivatives have in their residuals an important potential for the production of biogas, which works in two fundamental directions, purification and compression with a view to its possible automotive use and as a substitute for acetylene and, from of the growing interest in the protection of the environment, manage donations that allow its development.
Similarly, the construction of small biogas plants destined for soup kitchens should be continued, together with the application of technical-organizational measures and the introduction of new achievements, with a view to reducing the consumption rates of derivatives of oil in agriculture and transport, without ignoring at this stage the progressive increase in animal traction
In order to use all the available options, the small turbos installed in the industries should be exploited as much as possible, in this sense the Sugar Company Melanio Hernández has proposed in its strategy the implementation of a group of projects that favor the development of the generation in your company.
Analysis of the fundamental indicators to compare.
The assembly of two Electricity Turbo Generators in the Melanio Hernández Sugar Company in the province of Espirituana, brought with it a series of positive consequences that directly influenced both within the entity itself and outside it. Before the Turbos were assembled, in order for the productions carried out there to be carried out, it was necessary to buy the electrical energy from the National Electro-energetic System, which implied that a series of expenses were incurred, which were eliminated when put into practice. the investment in question. With the implementation of this project, far from having to pay for the energy needed for its productions,then income is received from the sales made from this to the National Electro-energetic System, which is nourished considerably from what the Turbos generate.
With the investment made, the consumption of Fuel Oil decreased substantially, which constituted an appreciable disbursement for the entity taking into account the prices of the necessary product in the world market, as well as the blockade imposed by the North American state throughout all years of Revolution which prevents us from acquiring directly in this case such a precious product and necessary for the development of the economy of our country.
Below is the saving of Fuel Oil expressed in its value in National Currency in the years of operation of the Turbos including the base year:
| Year | 2002 | 2003 | 2004 | 2005 | 2006 | Average |
| Savings ($) | 96440.36 | 88403.66 | 114 040.72 | 150969.34 | 248591.1 | 139689.04 |
For the above calculations, the following formula provided by the energy department of the Sugar Company was used:
Days of Steam X 540 Hl. / day X 10.57 Gls / Hl. = Gls of fuel oil
Gls of fuel oil X 3,785 Lts = Lts of fuel oil
Lts of fuel oil X 0.186 $ / Hl. = Fuel oil savings ($ / Hl.)
As it could be seen in the previous data, the implementation of this project was extremely necessary since in the saving of Fuel Oil expressed in National Currency, considerable values were obtained, which contributed and even contributes to the profitability of both the company and the country. usually.
The assembly of these Generator Turbos also contributed to the reduction of the time lost in the company taking into account that those that were replaced were nothing more than an obsolete technology and therefore were in poor condition, after this process greater efficiency was appreciated in the entity as well as broad stability in production.
It was foreseen in the PRE-Feasibility Study that the total cost of the investment would be $ 1,792,500.00 for each of the Turbos (See Annex No. 8), however we were able to specify in real terms what the cost of assembling the two Turbos altogether $ 1 006 380.00. Through the above values, it can be seen that the real total cost of the investment was considerably lower than what had been anticipated, which had as a fundamental cause that the equipment that was going to be purchased at that time would be new, however for the benefit of the entity the mounted Turbos were bought second hand for the residual value that they had so far from the Sugar Company, Bolivia, which had been dismantled at that time.
According to a PRE - feasibility study carried out to evaluate the possible future results that the assembly of the Generator Turbos could provide, the cost of producing one Kw. / h of electrical energy would be 1.5 cents from all the elements involved in the production process (See Annex No. 5), however after the analysis of the cost sheet carried out by the Accounting department, what this cost really costs production line is 1.93 (See Annex No. 3) cents on average. It is possible to appreciate the difference between these values is outside the margin of error of 10% of the initial value,This contradiction is fundamentally determined by the non-compliance with the quality indices and therefore the non-compliance in addition to the steam quality indices in addition to the lack of thoroughness when carrying out the study before the equipment is assembled.
Comparative table of the Predicted and Actual Annual Generation indicators:
| Indicators | U / M | 2002 | 2003 | 2004 | 2005 | 2006 |
| Annual Gen. Expected | KW / h | 8114700 | 10706300 | 11812000 | 12476900 | 13242200 |
| Gen. Annual Real | KW / h | 8114700 | 8982000 | 15229161.7 | 11696976 | 11293200 |
As can be seen in the previous comparative tables, the annual generation of electricity was planned to reach a value between 8 and 14 million Kw. / h, which for the real results fundamentally remained except in the year 2004 in which it had an increase until reaching more than 15 million Kw. / h generated, which is a positive aspect for the company since the more production it has the more profit it will obtain.
Comparative Table of the indicators; Generation Delivered to SEN Planned and Actual:
| Indicators | U / M | 2002 | 2003 | 2004 | 2005 | 2006 |
| Gen. SEN Preview | KW / h | 795500 | 3970000 | 4380100 | 4626600 | 4910400 |
| Gen. SEN Real | KW / h | 795500 | 1723304 | 2921871.5 | 2150923 | 1525708 |
Furthermore, it can be seen from the table illustrated above that the delivery of energy to the National Electro-energy System was expected to behave with values of between 3 and 8 million Kw. / h, which did not really happen exactly, since as the years passed, this aspect gradually decreased, which is based on the fact that as time goes by despite the proper maintenance of the equipment They are losing their useful life as well as their performance, which constitutes a decrease in the profits obtained by this route in the entity.
Comparison Table of Expected and Actual Sales Price:
| Indicators | U / M | 2002 | 2003 | 2004 | 2005 | 2006 |
| Expected sale price | $ | 0.0 | 0.08 | 0.08 | 0.08 | 0.08 |
| Real sale price | $ | 0.05 | 0.06 | 0.05 | 0.06 | 0.06 |
The sale price of the energy produced by the turbos generators was expected to be 0.08 pesos according to the table of the planned data, we can also see in the table where the real data is shown that it decreased a little considerable considering that It was only 0.02 or 0.03 pesos, which although it does not constitute an irreparable loss for the entity, it is a loss that, however small it may be, is money that has been stopped being used in other matters that are considered necessary for the company..
Comparative Table of Total and Expected Total Income:
| Indicators | U / M | 2002 | 2003 | 2004 | 2005 | 2006 |
| Total Estimated Eng | $ | 0.0 | 333900.00 | 368400.00 | 389100.00 | 413000.00 |
| Real Totals Engineer | $ | 36190.00 | 110235.70 | 151007.80 | 123541.60 | 87779.69 |
To the extent that the amount of energy that had to be delivered to the National Electro-energy System was not complied with, in addition to having decreased over the years and non-compliance with the expected sale price, the total income that is obtained through the sales that are made. All this has a negative impact on the entity since the less income it makes, the less profit it will obtain, which does not prevent the business from continuing to be profitable.
To deepen the details of the previous tables, refer if necessary to Annex No. 6.
Report of the ex-post evaluation of the investment made in the assembly of two turbo generators mounted in the
Sugar Company Melanio Hernández:
Methodology used: synthesis of how to apply the results obtained.
The ex-post evaluation described above constitutes a comparative process between the forecasts made in the feasibility study corresponding to the assembly of two turbo power generators, at the Azucarera Melanio Hernández company in the province of Espirituana, and the actual data obtained as a result of a research carried out in the entity itself, resulting in some variations detected through the comparison in some important aspects such as: the amount of the investment, the unit cost of production, the generation of energy in the different years investigated, thus such as the one delivered to the National Electro-energy System, in addition to the sale price at which it was sold, which leads to considerable variation in addition to the total income obtained through this route.
The project as a solution to the problem.
The project in question generally gave a solution to the previously existing problem, which consisted fundamentally of the total dependence of the company on the National Electro-energy System to start up its productions through the energy it needed for it.
Project objectives (achievement of objectives).
The objectives that were set for the realization of this investment were:
- Achieve energy self-sufficiency in the factory and distillery, with a minimum consumption of the SEN and sale of the excess energy. Improve the reliability and operations of the Electric Plant. Delivery of surplus energy to the SEN. Reduce the investment cost by taking advantage of the existing turbine and generator. The energy and steam balance is better.
They were completely fulfilled since with the assembly of the two 4 MW turbo generators each, a self-supply of the factory and the distillery was achieved with a minimum consumption of energy provided by the National Electro-energetic System; the reliability and operations of the power plant were improved since production, after the start-up of the investment, was not interrupted for at least long periods of time; I was also able to specify that the energy not used by the entity is sold to the National Electro-energy System, which also implies income for the company; with the application of this project the cost is reduced.
Impacts and positive effects (changes produced).
After the start-up of the investment that had been proposed at the time, several positive effects were obtained taking into account that the energy needed for the productions is no longer purchased, but is currently being sold to the National Electro-Energy System the one that is left over after having used the one you need, also has a very positive impact consisting of the savings that were produced from fuel oil in a considerable amount expressed in National Currency, the aspect of the efficiency of the production which had a substantial advance from the application of the project.
Environmental Aspects (Analysis of the environmental aspects that were taken into account).
In the feasibility study of this investment, the environmental aspects that influence it were not taken into account, which constitutes a serious deficiency since the Cuban environmental legislation raises the following in the Constitutional Reform law of 1992: “The State protects the environment and natural resources of the country. It recognizes its close connection with sustainable economic and social development to make human life more rational, and to ensure the survival, well-being and security of current and future generations. It is the responsibility of the competent bodies to apply this policy.
Institutional Aspects (Capacity for ex-ante and ex-post operation).
In the Melanio Hernández Sugar Company, the Feasibility Study necessary to launch the project in question was carried out, which provided a series of results necessary for the ex-ante evaluation of the investment, for which it provided the entity in charge with all the information necessary for the proper development of the assigned task. The same happened with the ex - post evaluation that was carried out for this project, where we obtained all the necessary data to fully comply with the fundamental requirements of this report.
Investment Costs (Cost index, compliance indicator).
If we talk about the cost of the investment, it can be said that it was extremely lower than that proposed in the feasibility study, after some calculations made, it is concluded that the real cost of the investment was approximately 28% of what was planned., which was prosecuted in the forecast was made for the purchase of new equipment and the second-hand turbos of the Bolivian Sugar Company that had been recently dismantled were actually rescued.
Rates or prices.
The rates or prices established for the sale of the product obtained through the operation of the turbo generators had a small variation taking into account that it was planned to establish a price of 0.08 pesos for the sale of 1 Kw, which was modified only by 0.02 and 0.03 pesos below, which despite not being a considerable decrease continues to be a smaller amount of income obtained in the entity.
Additional funding efforts.
Taking into account the data set forth above that allows us to know the decrease in the total amount of the investment, it can be specified that it was not necessary to resort to additional financing efforts, nor to exceed the budget that had been established for this purpose.
Execution schedule (temporary compliance).
Taking into account the execution schedule proposed in the Feasibility study, the turbos generators should be run between the months of June and December 2002, which constituted the base year, effectively as planned, this year the process was completely completed, which It allowed the equipment to be fully used for the 2003 harvest, providing benefits from this period to date, such as production effectiveness, less amount of time lost, fuel oil savings as well as a greater amount of income from concept entry of energy sales to the National Electro-energy System.
Evaluation of fundamental economic aspects.
It is truly important at the time of writing this report to highlight that from the economic point of view, the investment did not provide the expected results in terms of generation and delivery of energy to the National Electro-Energy System, as well as the predetermined values of the sale price, starting From these analyzes we can conclude that the income that had been planned in the feasibility study was not fulfilled either.
After having analyzed these three key factors to determine the result of the investment, it can be specified that despite having failed to comply with the aforementioned indicators, the project, after five years of operation, continues to be profitable and providing positive results to the company and the country..
Sustainability (Analysis of continuity and expansion conditions).
Regarding the sustainability of the project, it is valid to clarify that the company is in absolute conditions for an improvement in the conditions of both turbo generators as well as its restructuring if necessary, taking into account all the benefits it has provided from the point of view economic, in addition to the efficiency it has provided to carry out the production process with higher quality.
Community participation.
One of the fundamental difficulties is the non-participation of the community in the process of study and assembly of the turbo power generators, of which the community environment was one of the most benefited since the surplus energy of the production is delivered for the consumption of the National Electro-energy System. It is also found to be deficient that at the time of project evaluation the environmental impact that the implementation of this project may bring is not taken into account.
Conclusions of the Report:
By way of conclusion it is necessary to highlight that the investment made for the assembly of two electricity turbo generators was totally profitable in terms of the income obtained from the sale of energy to the National Electro-energy System, including within these indicators; generation delivered and the sale price used. After this analysis, it can be concluded that the proposed objectives were met taking into account that a total self-sufficiency of the energy needed for the company's productions was achieved, as well as the surplus energy was sold; the reliability of the operations of the power plant was improved; In addition, investment costs were reduced from the use of the turbine and a more efficient energy and steam balance was achieved.
Recommendations of the Report:
It is necessary to recommend after having reached conclusions that when carrying out a feasibility study of an investment, both environmental aspects and the participation of the community in its planning should be taken into account. They must also continue working in the same way so that the company continues to be profitable in terms of this production.
Conclusions
After the investigation, we reached the following conclusions:
1. A comparative analysis was performed between the forecasts made in the feasibility study for the assembly of two turbo power generators in the Sugar Company and the actual results of the investment itself.
2. It was possible to verify through the ex-post analysis of the proposed investment that the forecasts made in the feasibility study were not met, although the results obtained show the financial-economic viability of the project.
3. It was also possible to verify that there was a forecast regarding the investment amount of 1.7 million pesos for each Turbo generator, however, both turbos only really cost 1.1 million pesos.
4. The analysis performed also showed that the cost of producing a KW / h was expected to be 1.5 cents and was actually 1.93 cents on average.
5. It can also be concluded that there were variations between the forecasts and real values in the indicators of annual energy generation, delivery of this to the SEN, its sale price, as well as the income obtained from the sale of electricity.
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