Case Studies Conclusions

 

 

Twenty six biofuel case studies were developed in Namibia, Ghana, South Africa, UK and Italy over the period 2012-2013 in order to better understand:

All bioenergy projects analyzed used well-adopted technologies, apart from the Glycal Namibia project, which had not yet got off the ground with investor backing/grant funding.
In both South Africa and the UK, case studies highlighted that all technology surrounding biomass is still perceived as a risk or more accurately as ‘innovative’ and therefore a risk venture for financial borrowing institutions and project management. This impedes projects going forward.
Many of the projects had been initiated as a consequence of government legislation or policy, but this was also able to become a stumbling block, as in the case of Jatropha LL Biofuels Namibia (Pty) Ltd, which failed in 2011 when the Environment and Tourism Minister recommended that "no larger-scale jatropha-based biofuel industry be allowed in the Kavango and Caprivi due to its negative impact on food security and land tenure".
Irrespective of their scale, those bioenergy projects that appeared to be successful were those which had embraced the following key elements: 

The converse is equally true for projects that were unsuccessful: In Ghana it was noted that biodiesel –based companies are facing financial constraints mainly due to the relatively reduced interest in crop-based biodiesel in the European market coupled with the relatively non-existence of local consumption of biodiesel in Ghana. 
Biofuels are attractive because they are derived from plant biomass which is formed by capturing solar energy and combining this with CO2 to make carbohydrates and thence other forms of energy-dense polymers. 
However the Environment Committee of the European Parliament adopted amendments in July 2013 to the proposed biofuels legislation that would introduce mandatory indirect land use change (ILUC) factors in the calculation of GHG effects of biofuels and a cap at 5.5% for the use of crop-based biofuels in transportation. This is despite the fact that there is a lack of consistency and accuracy of ILUC factors. This will undoubtedly impact on biofuel programmes in Europe and trade between Africa and Europe.

Ghana
The detailed reports for each company interviewed have been compiled in the various cases presented below (i.e. Case 1 to Case 9).
Out of the nine (9) companies whose representatives were interviewed, four (4) are in the biogas supply chain namely:

These companies are all wholly owned by Ghanaians. The activities of these companies include design and construction of anaerobic digestion systems for treatment of varied feedstocks. The digester sizes range from domestic to institutional dimensions incorporating public and community systems.
The remaining five (5) companies were biodiesel supply chain companies and these are:

Two (2) out of these five (5) companies are wholly foreign-owned, specifically, from Norway whiles another three (3) are wholly Ghanaian owned with the other one being a partnership between a Ghanaian and a foreign companies.
With the exception of TRAGRIMACS which cultivates sunflower, all the other companies are into Jatropha curcas cultivation.
The models used by each of the companies differed for example, some acquire long-term leaseholds over land whilst others negotiate for the landowners to have shareholding in some of the products from the farms rather yet others explore the co-operative system.
Generally, the biodiesel –based companies are facing financial constraints mainly due to the relatively reduced interest in crop-based biodiesel in the European market coupled with the relatively non-existence of local consumption of biodiesel in Ghana.
It can be deduced that whilst biogas industries appear to do well in terms of technology diversification, adoption and dissemination, the biodiesel inclined companies have diversified into food production or are storing seeds awaiting the next good tide of financial breakthrough or increase in crude price.

South Africa
Five biofuels companies formed the basis of the study.

Of the five cases studied three were seen as driven primarily by economics and heavily government-involved:

These perceived economically-driven cases appeared to be hindered by

It was also clear from commentary during the exit interviews that many of the projects were ‘not’ conceived with sustainability in focus.

In short, the supply chain is not rigid and the apparent fragility could undermine successful implementation and outcome of these projects.
By contrast, the Community Biogas project at Three Crown and the Algae-to-energy project (Fort Hare University, Alice) were perceived as socially/societally driven. Interestingly, these projects originated and were funded by non-governmental organizations and/or academic institutions. They were grown from and by the end-user and implemented as a ‘need’ to solve existing obstacles.

It is obvious that any and all plant-based biofuels projects are by their very nature elements of the “food versus fuel” debate. The projects described in this report are no different and will compete for available land with food crops.
Although several biofuels projects in South Africa have become dormant due to a government decision to impose a moratorium on the use of arable land for biofuels, government involvement in the Mabele and Bio-ethanol projects might explain the delay in securing the necessary mandates. That is, a conflict of interest exists and government is unsure of how to proceed. Even so, it was evident in the debriefing sessions that the projects investigated were being touted as efforts to stimulate regional agriculture including Phytoenergy.
Purportedly, the stimulus will be provided by the infusion of technology and infrastructure to support biofuels crop production. It is hoped that a knock-on effect will kick start a local food producing market. However, in the absence of progress to realize not only feedstock production but transport, processing and marketing (i.e. a complete biofuels supply chain), it is doubtful whether these biofuels projects will have any beneficial effect on regional agriculture.
By comparison, the societally driven biofuels project initiated to address specific community needs both have a complete biofuels supply chain in place. In addition biogas (methane), these systems produce treated water which is used for irrigation of crops that provide food to the community. These systems also generate a biomass that can be used as a biofertilizer and feedstock for anaerobic digestion. Consequently, these are (Community biogas at Three Crowns) and will (Algae-to-energy, Fort Hare University) approach zero waste in that all products along the supply chain either are or will be utilized.

Namibia
Four bioenergy operations formed the basis of case studies: 

These projects represent a wide and diverse spectrum of bioenergy operations and highlight key factors in the success or failure of bioenergy operations in general.

The Namibia Government launched a ‘National Roadmap on Crop-Oil for Energy’ in August 2006.  The Vision Statement was:  ‘An established bio-oil energy industry that contributes to a thriving and profitable bio-oil energy economy and meaningfully supports Namibia’s development goals as envisaged in Vision 2030’.  
Under the Roadmap Jatropha was identified as a key feedstock of a domestic biodiesel industry for export and able to serve a yet to be established national market (Interim Bioenergy Committee 2006). Major production was envisaged in the maize triangle and in the communal areas. Other biofuels were not excluded nor highlighted.  Jatropha LL Biofuels Namibia (Pty) Ltd started in 2007 and in 2008 obtained a 20 year land lease. However, in 2011 the Environment and Tourism Minister recommended that "no larger-scale jatropha-based biofuel industry be allowed in the Kavango and Caprivi due to its negative impact on food security and land tenure". Large-scale production is directed at projects exceeding 500 hectares.  Towards the end of that year Jatropha LL Biofuels Namibia (Pty) Ltd closed down.  The energy experts from India returned home and lack of support from the community to maintain the remaining business operation which comprised a crop system of diverse agricultural products, as maize, cabbage, potatoes, groundnuts, sweet potatoes and lettuce folded.

The Biogas for Community project was established with UNDP (University of Namibia) funds in 2008 with support from Henties Bay Municipality, and the Informal Settlement Community.   The objective was poverty alleviation in local communities, and training and the technology was provided by Ghana. On completion, the bio digester provided gas for ~ 3h, for cooking. However, once the project was implemented it became the responsibility of the community to maintain the structure, and collapsed when the operator died. 

Invader bush is considered a serious problem that needs to be solved in order to maintain biodiversity and agricultural viability in Namibia. Converting it into biomass energy on a large scale has been recognized in the context of reducing rural poverty and the invader bush problem at the same time (SADC 2006).

The Bush to Power project was initiated as a result of the will of 3 organisations who obtained funding for its initiation from the European Union, Rural Poverty Reduction Programme:  the Desert Research Foundation; the Namibia Agricultural Union and Namibia National Farmers Union. They identified a commercial farmer to run the project and take on the long-term commitment and responsibility to manage different setups and levels of the energy supply chain, and to fix and repair locally and quickly, any component of the power plant.  The power plant technology was imported from an Indian supplier and the energy produced is by wood gasification. They also engaged the national energy provider and the local energy distributor: without these identities the distribution of the energy would not have been possible. However, the importance of overcoming electricity distribution challenges was not properly addressed. These included:

Further development of similar projects across Namibia would now require:

UK
Case studies interrogated in the UK were:

There are several areas in which the UK case studies have highlighted further areas for analysis.  Foremost is regards to risk, uncertainty and funding. 
Those companies which had capital were not especially affected by the ability to achieve funding. However, debt funding is still being capped by banks at approximately £30million. This can add considerably to the costs.  In one plant development in the UK, a six-bank consortium was required, and the more drawn-out negotiation process incurred delays which also added financial implications.
It appeared from carrying out the interviews that all technology surrounding biomass is still perceived as a risk or more accurately as ‘innovative’ and therefore a risk venture for financial borrowing institutions and this also impedes projects going forward, as is highlighted in several of the case studies.
All of the projects were initiated as a consequence of government legislation however, this has also been a major burden or stumbling block.   Many of those interviewed expressed how the government changes in legislation do not take into consideration that projects (regardless of technology) will take at least four years from conception through to completion and consequently (albeit) minor changes in the subsidies or acts can have serious adverse consequences moving forward.  Also expressed by some of the participants was the need for policy to do more now and not to be so cautious given the targets to be achieved and by educating the public more opposition (for example food vs. fuel debate) may not further impede their ability or willingness to commit.

 

 

---

This Action is funded under the ACP Science and Technology Programme 

(http://www.acp-st.eu/about/)

by the European Union and implemented by the ACP Secretariat.