French Albioma to invest in Brazil sugarcane biomass

Saturday, June 08, 2013

French Albioma plans to invest 400 million Euros in plants to produce electricity from sugarcane waste in Brazil and is negotiating partnerships with several sugar producers to develop the country´s huge biomass potential.

Brazil already generates about 7 per cent of its electricity and could double that to 10-15 per cent by making better use of its "bagasse", the crushed cane stalks left after the sugar is extracted, Albioma chief executive Jacques Petry said.

With an energy content similar to wood - 450 kilowatt hours per tonne, compared to 750 kwh for coal - bagasse has huge potential as an energy source.

One tonne of sugar cane yields 115 kg of sugar and about 300 kg of bagasse, but of the some 500 million tonnes of bagasse produced globally per year, only about 10 percent is used as fuel, mostly by plants linked to sugar mills that burn bagasse to produce steam and small amounts of electricity.

"Until recently, bagasse was a waste product in most countries, left to rot," Petry told Reuters in an interview.

Albioma, which has decades of experience generating electricity from bagasse in French overseas territories, can squeeze three to five times more energy from bagasse than sugar mills, Petry said.

Global sugar cane production was about 1,700 million tonnes last year, of which 560 million in Brazil, 320 million in India and 120 million in China.

Albioma, formerly called Sechilienne-Sidec, burns about 1.3 million tonnes of bagasse on the Indian ocean islands of Reunion and Mauritius and the Caribbean island of Guadalupe, where bagasse is a significant part of the energy mix.

Petry - former CEO of Suez Environnement, the world´s second-largest water group - joined Albioma in 2011 and wants to monetise its biomass expertise in Brazil, where installed generating capacity grows about 9 per cent per year.

Long-term contracts

Albioma plans to invest "400 million over the next decade in Brazil and is negotiating with several sugar mills about buying out their plants.

Other major bagasse-based power producers are Brazil´s Raizen, ETH Bioenergy and the Brazilian units of French sugar groups Tereos and Louis Dreyfus.

Petry said it takes a long time to negotiate the long-term contracts with farmers, sugar mills and the state grid company that buys the power, but that finance was readily available from Brazilian Development Bank (BNDES).

The company also plans to invest "400 million in biomass projects in French overseas territories, including a "170 million bagasse project in Martinique, and "200 million in biogas plants in France, where it has 22 projects under way to produce electricity from manure and other agricultural waste.

Albioma, which has a market capitalisation of "423 million, has a total generating capacity of 693 megawatts, roughly equivalent to a small nuclear reactor.

Most of that is from biomass, but the firm also operates 69 megawatts of solar power. It sold its 57 megawatt wind park earlier this year to EDF Energies Nouvelles for "59 million.

Albioma´s 2012 net profit rose 4 per cent to "33.5 million on turnover of "383 million. Its shares are up nearly three percent in the year to date, after rising 31.4 per cent in 2012.