With the focus of the world currently on South America due to the FIFA World Cup, WELTEC’s Aguinaldo Ramalho discuses the potential growth for biogas plants in the area.

What are the conditions for the operation of biogas plants in South America?

In certain areas, the framework conditions are good in many countries, e.g. in Brazil. The plant technology employed in agriculture and for the industrial fermentation of sugar cane to ethanol is highly developed, and expertise is available in this subject area. Yet, many are still unaware of the possibility of using the leftovers of this process for energy production.

In terms of the substrates, the preconditions are promising: The World Cup host country with its population of almost 200 million is the world‘s second-largest manufacturer of bioethanol.

Apart from the leftovers from this process, the waste industry also offers an enormous potential. This year, a new waste law entered into force in Brazil. The purpose of this law is to increase the proportion of waste that is recycled, utilised and duly disposed of. The agricultural industry in southern Brazil also offers a huge amount of input substances. All these substrates – most of which have not been used so far – offer ideal preconditions for the generation of energy in anaerobic biogas digesters.

What circumstances are currently hindering the development?

 

Due to the lack of knowledge of the advantages of bioenergy, a green conscience, a kind of applied environmental conservation and an inclination towards promising energy concepts have not yet taken root. Perhaps the pressure to act is not yet high enough.

Another reason why investors are reluctant in many South American countries is the high inflation rate. With

an inflation rate of almost six percent in 2013, Brazil has surpassed the ceiling of 4.5% that had been set by the central bank. Even a base interest rate of 11% has not been able to restore the trust of the investors so far. To be attractive, the plants would have to pay off in as little as about five years – an unrealistically short period.

South American investors have already started benefiting from German plant expertise: In 2013, WELTEC built the first development stage of a 3MW plant in Uruguay.

Could such construction projects serve as reference projects?

 

Basically, yes, especially since decentralised energy production triggers numerous effects. In addition to supplying rural areas with energy, these projects create jobs and regional value chains. If such projects catch on, they can also serve as a business, energy and development policy instrument. Power generation from bioenergy is especially effective because it embraces several sectors and is suitable for many industries.

Moreover, it helps to overcome the frequent lack of practical knowledge in fields like combined heat and power generation. Though WELTEC was able to convince the client and operator in Uruguay with international experience and flexibility in scaling industrial plants, it was at least just as important for the investor that its dairy products for the Asian markets can be produced and packaged with power and especially process heat directly from the plant. Thus, there is a demand for projects that create independence – as is also the case with our current planning mandate in Brazil.