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The financial viability of a 5 MW biomass power station for Stellenbosch
Thesis (MEng)--Stellenbosch University, 2025.
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| Format: | Thesis |
| Language: | English |
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Stellenbosch : Stellenbosch University
2025
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| _version_ | 1867613944161501184 |
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| access_status_str | Open Access |
| author | De Wet, Matthys Johannes |
| author2 | Van Eeden, Joubert |
| author_browse | De Wet, Matthys Johannes Van Eeden, Joubert |
| author_facet | Van Eeden, Joubert De Wet, Matthys Johannes |
| author_sort | De Wet, Matthys Johannes |
| collection | Thesis |
| dc_rights_str_mv | Stellenbosch University |
| description | Thesis (MEng)--Stellenbosch University, 2025. |
| format | Thesis |
| id | oai:scholar.sun.ac.za:10019.1/134593 |
| institution | Stellenbosch University (South Africa) |
| language | English |
| last_indexed | 2026-06-10T12:44:10.803Z |
| license_str | Other — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from SUNScholar — Stellenbosch University Repository |
| publishDate | 2025 |
| publishDateRange | 2025 |
| publishDateSort | 2025 |
| publisher | Stellenbosch : Stellenbosch University |
| publisherStr | Stellenbosch : Stellenbosch University |
| record_format | dspace |
| source_str | SUNScholar — Stellenbosch University Repository |
| spelling | oai:scholar.sun.ac.za:10019.1/134593 The financial viability of a 5 MW biomass power station for Stellenbosch De Wet, Matthys Johannes Van Eeden, Joubert Stellenbosch University. Faculty of Engineering. Dept. of Industrial Engineering. Biomass energy -- Economic aspects -- Stellenbosch (South Africa) Electric utilities -- Costs -- Stellenbosch (South Africa) Renewable energy sources -- Stellenbosch (South Africa) Electric power production -- Stellenbosch (South Africa) Thesis (MEng)--Stellenbosch University, 2025. De Wet, M. 2025. The Financial Viability of a 5 MW Biomass Power Station for Stellenbosch. Unpublished masters thesis. Stellenbosch: Stellenbosch University [online]. Available: https://scholar.sun.ac.za/items/85c8e887-6323-425d-ab37-8836a49e85d1 ENGLISH ABSTRACT: A 5 MW biomass-to-energy [BtE] power station presents a valuable and practical solution for the Stellenbosch Municipality [SM] to secure a source of dispatchable power, capable of generating up to 36 GWh per annum of renewable energy. This output represents approximately 15% of SM’s average energy consumption per annum. An earlier study conducted by the Centre for Renewable and Sustainable Energy Studies of the Stellenbosch University concluded that the levelised cost of electricity [LCOE] from such a BtE project was too high to be economically feasible. This thesis revisits those findings and demonstrates that the LCOE can be reduced to an estimated R2.80 to R3.00 per kilowatt-hour (VAT excluded). Although these values remain above the current average municipal infeed tariff of approximately R2.10 per unit (excluding VAT), the projected escalation of Eskom’s tariffs relative to those of the BtE power station is expected to deliver an internal rate of return of 16% per annum by 2028. This outcome is enabled through the establishment of a long-term (20-year) power purchase agreement between the independent power producer and Stellenbosch Municipality. For an IRR of 16% p.a. the BtE project is dependent on several key success factors: • Capital investment of the power station as well as its wood processing and dry storage facility: not to exceed R 388 million (VAT excluded) • Escalation on revenue required: 6.4 % per annum (or at a rate consistently lower than Eskom’s electricity price increases) • Loan period: 15 years or longer • Interest rate: 11.50% per annum, or lower • Plant annual capacity factor: 80 % or better • Biofuel feedstock costs: R800 per tonne (VAT excluded) • Average fuel consumption: 50 000 tonnes per annum or lower A critical determinant of the project success is the reliable supply of biomass feedstock. The Cape Winelands District Municipality [CWDM], with its diverse composition of ‘unwanted’ biomass resources, offers a sustainable supply base. Biomass from invasive alien trees in the district’s five major riparian zones of the Berg, Bot, Breede, Hex, and Zonderend rivers, can be sustainably harvested at approximately 16 000 tonnes per annum. This resource currently has an incremental natural growth rate of 180 000 tonnes per annum. In addition, recycled fruit orchards and vineyards across CWDM contribute an estimated 100 000 tonnes of dry biomass per annum. A participation rate of 33% from local fruit and wine farmers could provide 32 000 tonnes annually, sufficient to meet the rest of the power station’s feedstock demand of approximately 44 000 to a maximum of 50 000 metric tonnes per annum. Should farmer participation be lower, supplementary biomass can be sourced from refuse derived fuels and the woody fraction of garden refuse collected by SM and surrounding municipalities. Adequate space is available on the site of the wastewater treatment works of SM to accommodate the proposed power station. This site is located directly adjacent to the main high-voltage substation of SM, an essential component required to connect the power station to the distribution network of the town. This thesis demonstrates that, with the identified feedstock availability and financial parameters in place, the proposed BtE power station can achieve the necessary key success factors, thereby establishing the technical and financial viability of the proposed biomass to energy plant. AFRIKAANSE OPSOMMING: ‘n 5 MW biomassa tot energie [BtE] kragstasie bied ‘n waardevolle en praktiese oplossing aan Stellenbosch Munisipaliteit [SM] as ’n volhoubare bron van basisvrag krag. Met ‘n jaarlikse opwek vermoë van 36 GWh, verteenwoordig die BtE kragstasie ongeveer 15% van SM se gemiddelde energieverbruik per jaar. ‘n Vorige studie deur die Sentrum van Hernubare en Volhoubare Energie Studies van die Universiteit van Stellenbosch het bevind dat die opwekkoste van ‘n 5 MW biomassa-aangedrewe kragstasie te hoog was om as doenlik beskou te word. Hierdie tesis herbesoek hierdie bevindings en demonstreer dat opwekkoste van tussen R2.80 en R3.00 per eenheid (BTW uitgesluit) haalbaar is. Hierdie bedrae is wel hoër as die gemiddelde invoer tarief van ongeveer R2.10 per eenheid (BTW uitgesluit) wat tans deur munisipaliteite aan Eskom betaal word. Nietemin, aangesien die opwekkoste van die BtE-kragstasie teen ’n laer tempo as dié van Eskom toeneem, word voorsien dat die BtE-krag teen ongeveer 2028 goedkoper as Eskom se elektrisiteitstariewe sal wees. Die bevinding word empiries aangetoon in die geïntegreerde besigheidsmodel wat in hierdie tesis ontwikkel is. Hierdie positiewe finansiële uitkoms word bewerkstellig deurdat die kragstasie eienaar (die onafhanklike krag produsent) ‘n langtermyn (20 jaar) krag-aankoop-ooreenkoms met die SM sluit. Die sakemodel, vir ‘n beter as 16% interne opbrengskoers, moet aan die volgende sleutel sukses faktore voldoen: • Die kapitale belegging van die kragstasie, die sentrale houtwerwerking en droë biomassa opbergingsgeriewe, mag nie R 388 miljoen (BTW uitgesluit) oorskry nie. • Die eskalasie op kragverkope sal ongeveer 6.4% per jaar moet wees, of moet deurgaans teen ‘n laer tarief as Eskom aangebied word. • Rentekoers van die kapitale lening: 11.50% of beter. • Afbetaal periode: 15 jaar of langer. • Aanleg kapasiteitsfaktor per jaar: 80% of beter. • Biomassa brandstof koste: R800 per metrieke ton (BTW uitgesluit). • Brandstofverbruik: Gemiddeld 50 000 metrieke ton per jaar of laer Die Kaapse Wynlande Distriksmunisipaliteit [KWDM] beskik oor ‘n diverse samestelling van biomassa bronne wat suksesvol aangewend kan word om ‘n 5 MW kragstasie van brandstof te voorsien. Biomassa van uitheemse indringer bome langs die oewers van die hoof standhoudende riviere van die KWDM: die Berg, Bot, Breede, Heks en Zonderend, kan volhoubaar 16 000 ton hout per jaar oplewer. Hierdie bron groei inkrementeel teen ‘n tempo van 180 000 metrieke ton per jaar. Die harder houtsoorte van herwinde vrugteboorde en wingerde van die KWDM verteenwoordig ‘n totaal van ongeveer 100 000 metrieke ton biomassa per jaar. Indien ongeveer ‘n derde van die vrugte- en wingerd-boere aan die kragstasie-projek sou deelneem, kan jaarliks ongeveer 32 000 ton uit hierdie bron vir die voorgestelde kragstasie beskikbaar raak. Sou die deelname uit dié landbou sektor kleiner wees, kan biomassa uit afval hout, en afval-afgeleide brandstof lyne van die Stellenbosse en omliggende dorpe se tuinvullis, soliede afval oordrag- en herwinningstasies gewerf word. Die Munisipaliteit van Stellenbosch het voldoende spasie op die terrein van sy riool uitvalwerke om die voorgestelde biomassa aangedrewe kragstasie te akkommodeer. Die uitvalwerke is aangrensend tot die hoof hoogspanning substasie van die munisipaliteit, vanwaar verspreiding van krag aan die dorp geskied. Hierdie tesis demonstreer dat, met die geïdentifiseerde biomassa bronne en die inansiële parameters in plek, die sleutelsuksesfaktore haalbaar is en dat die biomassa-aangedrewe kragstasie tegnies en finansieel uitvoerbaar is. Masters 2025-12-15T14:10:32Z 2025-12-15T14:10:32Z 2025-12 Thesis https://scholar.sun.ac.za/handle/10019.1/134593 en Stellenbosch University xix, 199 pages : illustrations application/pdf Stellenbosch : Stellenbosch University |
| spellingShingle | Biomass energy -- Economic aspects -- Stellenbosch (South Africa) Electric utilities -- Costs -- Stellenbosch (South Africa) Renewable energy sources -- Stellenbosch (South Africa) Electric power production -- Stellenbosch (South Africa) De Wet, Matthys Johannes The financial viability of a 5 MW biomass power station for Stellenbosch |
| title | The financial viability of a 5 MW biomass power station for Stellenbosch |
| title_full | The financial viability of a 5 MW biomass power station for Stellenbosch |
| title_fullStr | The financial viability of a 5 MW biomass power station for Stellenbosch |
| title_full_unstemmed | The financial viability of a 5 MW biomass power station for Stellenbosch |
| title_short | The financial viability of a 5 MW biomass power station for Stellenbosch |
| title_sort | financial viability of a 5 mw biomass power station for stellenbosch |
| topic | Biomass energy -- Economic aspects -- Stellenbosch (South Africa) Electric utilities -- Costs -- Stellenbosch (South Africa) Renewable energy sources -- Stellenbosch (South Africa) Electric power production -- Stellenbosch (South Africa) |
| url | https://scholar.sun.ac.za/handle/10019.1/134593 |
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