Based on a conversation I had last week, I am currently doing some quick personal research on converting boilers from heavy fuel oil (Bunker C) to coconut shells or even coal.
I found this news story about Shemberg Marketing Corporation’s (SMC) conversion of their boilers last year in Cebu to burn coconut shells – supposedly it’s up and running by now.
All of this data is from a newspaper article and I’ve done nothing yet to confirm it. But I lay it out for what it’s worth. No use hoarding it:
- The SMC companies were burning 1 million liters per month bunker, or about 5,000 barrels.
- They were spending P20 million/month on bunker (conflicting statement says 15 million), implying P20/liter delivered cost. They were looking at potentially P30/liter.
- Their expenditures for coco shells anticipated to be P6 million/month based on 3 million kilos coconut shell per month
- Cost of coco shells: P1.7 per kilo. Cost of coal: P1.8 per kilo
- Boiler conversion costs P60 million
So if the fuel costs go from P20 miilion/month to P6 million/month on an investment of P60 million, they are looking at a five month payback.
Just a few quick caveats/questions in my mind:
- Not sure if the P60 million represents total investment costs (it could just be equipment, and part at that)
- Are there increased O&M and overhaul costs
- Is availability the same from a forced and planned outage standpoint
- What’s the fuel supply risk vis-a-vis Bunker with respect to delivery, availability, and price
- What’s the coco shell supply like in your area, if you are not in Cebu
- What enviro permitting hurdles are faced
- What additional area for fuel stockpiles are required
- What are the additional considerations for waste handling/disposal
- What’s the fuel delivery impact on local area (increased traffic?)
- Are there additional tax incentives for coco shells