Brasil Biofuels expands Amazon power generation

Market: Biofuels, Electricity, Oil products
21/07/20

Biodiesel and power generation company Brasil Biofuels (BBF) was authorized to begin commercial operations at its 18th biodiesel-fired thermoelectric plant, further reducing the carbon footprint of power generation in the Amazon basin.

The company has been a pioneer in integrating biodiesel production and power generation in a region of the country that is highly dependent on diesel transported in from a long distance.

"It took over a decade to overcome the challenges of investing in the Amazon, but these projects prove that sustainable development in the Amazon is possible," BBF chief executive Milton Steagall tells Argus.

The company is one of only a handful of Brazilian biodiesel producers that uses palm oil as feedstock.

The palm oil used in its plants is produced on company-owned plantations, all of which are located in areas of the Amazon region that are classified as degraded, BBF says.

Because of a 2010 law, palm cannot be planted on areas that were deforested after 2007. Furthermore, because of the 2008 forestry code, properties in the Amazon biome are required to hold 80pc of their total area in reserve.

BBF was one of the winners of last year's generation auction for power purchase agreements in Roraima state, which used to rely on neighboring Venezuela for supply. The company will invest R635mn ($122mn) in two power stations with combined capacity of 74MW. The larger plant, with 56MW of capacity, will be located in the capital of Roraima and will have both biodiesel and solar generation capacity.

The second power plant will be in Sao Joao da Baliza, where the company's biodiesel and 72 t/d palm oil plant are located.

The two power plants will begin operating in early 2021.

According to Steagall, the plants will reduce conventional diesel consumption in the region by 130,000 l/y, once fully operational.

"Not only does this reduce pollution, but it also reduces generation costs," Steagall added.

The company plans to participate in future auctions to supply isolated systems. Steagall added that the government is expected to hold auctions for these regions in 2021.

In addition to its biodiesel business, the company announced a joint venture with US ethanol plant producers ICM to build a corn ethanol plant in Roraima. With initial investment of R220mn, the company plans to produce 400mn l/yr of ethanol.

Part of the corn ethanol plant's production will be used as catalyst for biodiesel production, but the bulk of the ethanol supply will be sold in Roraima.

"Roraima is the state with the highest gasoline prices, which means our ethanol will be competing with the most expensive gasoline in Brazil," Steagall said, adding that the company plans to take advantage of new legislation that will allow it to sell ethanol directly to the service stations.

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