A national laboratory of the U.S. Department of Energy

Office of Energy Efficiency & Renewable Energy

National Renewable Energy Laboratory 

Innovation for Our Energy Future 

Biomass Support for the China 

Renewable Energy Law: 

Feasibility Report—Agricultural 

and Forestry Solid Wastes Power 

Generation Demonstration 

December 2005 

Center of Renewable Energy Development 

Beijing, China 

Energy Research Institute 

Beijing, China 

National Development and Reform Commission 

Beijing, China 

Subcontract Report 

NREL/SR-710-40627 

October 2006 

NREL is operated by Midwest Research Institute ● Battelle Contract No. DE-AC36-99-GO10337 
Biomass Support for the China 

Renewable Energy Law: 

Feasibility Report—Agricultural 

and Forestry Solid Wastes Power 

Generation Demonstration 

December 2005 

Center of Renewable Energy Development 

Beijing, China 

Energy Research Institute 

Beijing, China 

National Development and Reform Commission 

Beijing, China 

NREL Technical Monitor: D. Lew 

Prepared under Subcontract No. ACO-4-44015-01 

Subcontract Report 

NREL/SR-710-40627 

October 2006 

National Renewable Energy Laboratory

1617 Cole Boulevard, Golden, Colorado 80401-3393 

303-275-3000 • www.nrel.gov 

Operated for the U.S. Department of Energy 

Office of Energy Efficiency and Renewable Energy 

by Midwest Research Institute • Battelle 

Contract No. DE-AC36-99-GO10337
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CONTENTS 

1 Rudong Biomass Direct-fired Power Generation Project of Jiangsu............................... 1

1.1 Project background .......................................................................................................... 1 

1.2 Project introduction.......................................................................................................... 1 

1.3 Straw resource and cost survey........................................................................................ 1 

1.3.1 Straw avalablity......................................................................................................... 1 

1.3.2 Straw charcteristic..................................................................................................... 2 

1.3.3 Straw cost.................................................................................................................. 3 

1.3 Construction condition..................................................................................................... 3 

1.3.1 Resource.................................................................................................................... 3 

1.3.2 Transportation ........................................................................................................... 3 

1.3.3 Power grid ................................................................................................................. 4 

1.4 Technology introduction .................................................................................................. 4 

1.5 Economic assessments..................................................................................................... 5 

1.6 Finance assessments......................................................................................................... 5 

1.6.1 Cost estimation.......................................................................................................... 6 

1.6.2 Generation benefits ................................................................................................... 6 

1.6.3 Profit making ability analysis.................................................................................... 6 

1.6.4 Conclusion................................................................................................................. 6 

1.7 Conclusions and suggestion............................................................................................. 7 

1.7.1 Conclusions............................................................................................................... 7 

1.7.2 Suggestion................................................................................................................. 7 

1.8 Annex............................................................................................................................... 8 

2 Gaoyou Biomass Fixed-bed Gasification power generation ............................................. 9

2.1 Introduction...................................................................................................................... 9 

2.2 Introduction of owner .................................................................................................... 10 

2.2.1 Basic information and assets of LinYuan Company ............................................... 10 

2.2.2 The qualifications to undertake this project ............................................................ 10 

2.3 Options of technical processes....................................................................................... 10 

2.4 Targets of project construction....................................................................................... 11 

2.5 Technical routes ............................................................................................................. 11 

2.6 Straw collection system ................................................................................................. 12 

2.6.1 Collection system frame.......................................................................................... 12 

2.6.2 Collection process................................................................................................... 12 

2.6.3 Straw price .............................................................................................................. 13 

2.6.4 Prevention of price risk ........................................................................................... 13 

2.7 Main technical and economic indicators of system ....................................................... 13 

2.7.1 Technical indicators................................................................................................. 13 

2.8 Economic analyses......................................................................................................... 14 

2.8.1 Basic data ................................................................................................................ 14 

2.8.2 Equipment and construction.................................................................................... 14 

2.8.3 Investment for Straw process sites and operations.................................................. 15 

2.8.4 Investment in fixed assets ....................................................................................... 16 

2.8.5 Scheme of investment ............................................................................................. 16 

2.8.6 Operation cost and profits....................................................................................... 16 

2.8.7 Tax........................................................................................................................... 16 

2.8.8 Analysis on cash flow.............................................................................................. 17 

2.8.9 Sensitive analysis.................................................................................................... 17 

2.9 Annex............................................................................................................................. 18 

iii
3 Xinhua biomass fliuldized bed gasification generation power........................................ 19

3.1 Project description ......................................................................................................... 19 

3.1.1 Project introduction................................................................................................. 19 

3.1.2 Project owner .......................................................................................................... 19 

3.1.3 General description of project location ................................................................... 19 

3.2. Technical Process.......................................................................................................... 20 

3.2.1 Technical flow......................................................................................................... 20 

3.2.2 Gasification power system...................................................................................... 20 

3.2.3 Device equipping Plan ............................................................................................ 20 

3.3 Feedstock collection system........................................................................................... 21 

3.3.1 Rice husk................................................................................................................. 21 

3.3.2 Straw ....................................................................................................................... 21 

3.4 Project construction ....................................................................................................... 22 

3.4.1 Site selection ........................................................................................................... 22 

3.4.2 Transportation ......................................................................................................... 22 

3.5 Environmental impact analysis...................................................................................... 22 

3.6 Investment estimation and financing resources............................................................. 23 

3.6.1 Investment estimation ............................................................................................. 23 

3.6.2 Financing................................................................................................................. 23 

3.7 Fiscal analysis................................................................................................................ 23 

3.7.1 Basic data ................................................................................................................ 23 

3.7.2 Operation cost ......................................................................................................... 24 

3.7.3 Fiscal assessment .................................................................................................... 24 

3.7.4 Sensitivity analysis.................................................................................................. 24 

3.7.5 Analysis of investment benefits............................................................................... 25 

3.8 Annex............................................................................................................................. 25 

iv
Feasibility Research Report on the Agricultural and Forestry Solid Wastes 

Power Generation Demonstration Project 

1 Rudong Biomass Direct-fired Power Generation Project of Jiangsu 

1.1 Project background 

Rudong County of Jiangsu province locates in the Eastern China region along the eastern coastline, 

which is the downstream plain of Yangtze River. The total area of the county is 1873 km2

, among which 

the arable land is around 1.58 million Mu. The annual agriculture yield is over 900,000 Ton, with stalk 

productions of 790,000 ton. This area basically depends on agriculture. Meanwhile, the industries grow 

very fast. Rudong enjoys plenty of stalk resources, and its utilization will positively contribute to the 

energy consumption in Jiangsu province, which is significant to improve the economic and social 

development. 

 

Currently, the stalk is basically used for cooking (roughly 30%-40%), with direct combustion. The 

utilization efficiency is only 5-8%. On the hand, there are substantial stalks that are burned directly inside 

the plowing field, which may influence the transportation, and even airport regulation. It wastes the 

precious energy resources, as well as seriously pollutes the environment. Stalk generation could not only 

address the fuel and electricity supply deficiency issue, but also replace the fossil fuel, so as to deploy the 

energy resources in a more reasonable approach. 

1.2 Project introduction 

Rudong stalk generation project is one of the important components of the new energy base 

construction in Rudong County. The total capacity is 24MW, with electricity generation of 156Gwh, 

133Gwh of which is connected to the grid. In line with the National Renewable Energy utilization target, 

this project aims to import the oversea mature stalk generation technology and devices through 

international cooperation, so as to absorb and achieve the commercialization and scaling up of the stalk 

generation. 

Rudong stalk generation project is located in the middle of Rudong project in Jiangsu province. It 

enjoys nice construction condition. This project could provide clean and reliable energy to the local 

economy development, and contribute to the local power grid. It could also replace the small steam 

coal-fired power plants whose development has been strictly controlled by the government, so as to 

reduce the coal consumption for power generation, which will be beneficial to the local environment and 

ecology protection. It is consistent with the government’s sustainable energy strategy. 

1.3 Straw resource and cost survey 

1.3.1 Straw availablity 

Through the spot survey of rural resident about 1000 household in Rudong, the output of straw for 

purchasing is about 7130 thousand tons (showns in Table1-3-1). Furthermore, the density of straw 

resource is high, and the production of straw is not effected on the climate. In 25km radius, the output of 

straw for purchasing is about 7600 thousand tons, which can fully supply the project. 

1
Table 1-3-1 Straw resource output in Rudong (in 25km radius) 

Type 

Planting 

area 

(10000 Mu) 

Total 

output 

(tons) 

Tatio of grain 

to straw 

Output 

(tons) 

Availability 

rate 

(%) 

Availability 

amount 

(tons) 

Wheat 48.26 140999 1:1 140999 25 35250 

Barley 35.19 91769 1:1 91769 27 24778 

Bean 22.79 45483 1:1 45483 21 9551 

Rape 23.96 37285 1:1.6 59656 23 13720 

Rice 84.86 501952 1:0.623 312716 45 237664 

Corn 15.63 63832 1:1.5 95748 68 65109 

Tuber 1.70 5634 1:0.5 2917 

Peanut 3.77 7771 1:1.2 11657 

Cotton 11.12 9929 1:3 29787 24 7149 

Sesame 0.18 431 1:2 862 

Husang 12 120000 100 120000 

Bulrush 20 200000 100 200000 

Total 905085 1111594 713221 

Table 1-3-2 Sraw resources in the vicinity of Rudong (in 25km radius) 

Item Qian country Shizong country Shigang country Total 

Planting area(Mu) 69841 73325 85415 

Crop output(tons) 39843 22909 53085 

Straw output(tons) 43827 25200 58394 127421

Straw availability (tons) 16873 9702 22482 49057 

1.3.2 Straw charcteristic 

The four swatches, which are cotton, wheat, rice and rapeseed in six months, are delivered to test in 

Spain. Table1-3-3 lists the straw component and charcteristic. 

Table 1-3-3 straw component and charcteristic 

Straw properties Unit Average fuel Min. Max. 

Moisture content % 11.0 7.0 25.0 

Ultimate analysis (dry) 

- Fixed carbon % 18.7 16.5 21.5 

-Volatiles % 76.1 71.9 80.9 

Ash content (815C) % 5.2 2.6 11.5 

Elementary analysis (dry) 

- Carbon % 45.4 41.5 47.8 

-Hydrogen % 6.1 5.7 6.7 

-Nitrogen % 0.60 0.40 0.96 

-Sulfur % 0.08 0.05 0.17 

-Oxygen % 41.16 36.77 43.36 

-Chlorine [n] % 0.41 0.07 1.19 

-Ash content (5.50C) % 6.26 2.6 14.66 

LHV, dry MJ/kg 17.04 15.60 17.60 

LHV, as received MJ/kg 14.97 

2
1.3.3 Straw cost 

The straw cost includes collecting, handling and transporting cost. 

 

1.3.3.1 Collecting cost 

Through the survey, the purchase price is about 84-196Yuan/tons, which is shown in Table1-3-4. 

Table 1-3-4: straw purchase price 

Type Availability (tons) Share (%) Purchase price 

(Yuan/t)

Wheat 60028 15.3 104 

Rice 237664 60.4 96 

Cotton 7149 1.8 196 

Corn 65109 16.6 82 

Bean 9551 2.4 150 

Rapeseed 13720 3.5 84 

Based on Table1-3-4, the average price is 97.5 Yuan/t. If the straw is collected in large scale, the price 

of straw will increase. Furthermore, because the purchase amount is large, the project need set up about 

10 collecting site, which will increase the collecting cost. Therefore, the collecting cost in practice is 

about 200Yuan/tons (the cotent of water is below 11%). 

1.3.3.2 Handling cost 

The straw for the project need be handled by machine. The denisity of each bale is 1t/m3 and the 

weight is 340-380kg. Based survey and evaluation, the handling cost is about 30Yuan/ton. 

1.3.3.3 Transporting cost 

In 15km, the transporting cost of straw is about 25Yuan/ton. Beyond 15km, the cost will reach 

50Yuan/tons. 

In conclusion, the total cost of straw is 280Yuan/ton 

1.3 Construction condition 

1.3.1 Resource 

Rudong is within the JiangHai plain, and occupies abundant stalk resources. The arable land is 1.58 

million Mu with 900,000 ton agricultural production. Taking into consideration of the mulberry and weed, 

the annual stalk production is accumulated to 1.11 million ton. Within 25km, the stalk production is 

1.237 million ton, 0.76 million of which could be commercialized. 

A sample survey within 1000 households in Rudong County indicated 713,000 ton of stalk could be 

commercialized given the price is within the scope of the farmers’ anticipation. Since the stalk resource 

density is high, and seldom influenced by the climate, a commercial 760,000 ton can absolutely meet the 

requirements of this project when considering a 25km collection radius and a high commercial awareness 

from the farmers. 

1.3.2 Transportation 

The dense roads and rivers note the Rudong County. The possession proportion of agriculture 

vehicles is quite high. Villages are connected by road. Groups are reachable by any vehicles. This means 

a sound condition for stalk transportation. There are three candidates location for this project, which is all 

3
within 1km distance from the national road line 317 and fourth level canal. All of them could be reached 

directly by waterage or road carriage. This convenience could absolutely meet the requirements in terms 

of the devices or feedstock transportation. 

1.3.3 Power grid 

Rudong County power grid is the end of the JiangSu provincial power grid. The basic power plants 

are the nearby NanTong Power plant (1.4 GW), TianShengGang plant (550MW). There are 2*220KV, 

6*110KV and 10*35KV substations. The power supply grid is based on the MaTang Substation of 

220KV, with the main 110KV substation and 110KV transmission lines, and supplemented by the 35KV 

substations and 35KV transmission lines. The three candidate sites are all close to the 220KV MaTang 

substation, and are quite easy to connect to the grid. 

1.4 Technology introduction 

The stalk resources come from the local farmers or the feedstock trader. In sequence with the 

collection, package, and transportation through rivers or vehicles to the factory storage, there comes to 

the following steps: 

z Stalk transported from conveyor and shredder to the boiler 

z Steam that produced from stalk combustion propels the steam turbines and generates electricity. The 

un-combusted stalk will stay at the bottom of the boiler. Meanwhile the ash enters the smoke filer 

chamber and emit through the chimney. 

z The residues inside the boiler and the ash could be harnessed as the agricultural fertilizer. 

A detailed technique flow can be as following: 

4
1.5 Economic assessments 

This project is composed by the storage, boiler chamber, turbine etc. It occupies 101,000 m2. The 

gross investment is 333 million RMB. After two years construction period, the power capacity could 

reach 24MW, and annually consumes stalk 140,000 ton. The annual operation hours is 6500, and thus 

produces 156 GWh and sale 132.6 GWh to the grid. The annual sale value could reach 106 million RMB. 

Around 150 employments could be created. 

The investment category is: 30% from capital cost, 67% from commercial bank loan, and another 20 

million US$ is needed to import the key devices. 

z Total investment: 333.22 million RMB (inclusive of 20 million US$) 

z Unit investment (KW): 13885 RMB 

z RMB currency exchange rate: 100 US$=826 RMB 

The bank loan period started from 21th Feb 2004 with the interest rate of 5.76%, and 15 years payback 

period. In addition to that, the flow capital during the first year was 15 million RMB, among which 5 

million is self-capital, and 10 million comes from the flow capital bank loan. 

 

z Power generation capacity: 24MW; 

z Annual electricity output: 156 GWh; 

z On-grid electricity: 132.6 GWh; 

z Construction period: 2 years 

Table1-5-1 Fixed asset investment assessment (Unit: 10,000RMB)

No. Cost Subtotal 

1 Fixed asset investment 31992.80 

1.1 Engineering cost 27580 

1.1.1 Civil work and workshop construction(10108m2

) 2525 

1.1.2 Production sector 20582 

1.1.2.1 Boiler (Denmark, FLS MIACJO) 14382 

1.1.2.2 Other devices 6200 

1.1.3 Supplementary production sectors 4214 

1.1.4 Other expense 259 

1.2 Contingency 4412.80 

1.2.1 Basic contingency(8%) 2206.40 

1.2.2 Contingency for price ascend(8%) 2206.40 

2 Regulation tax on fixed asset investment direction (0%) 0.00 

3 Interest during construction 1330.03 

Total investment:1+2+3 33322.83 

1.6 Finance assessments 

Power generation capacity: 24MW; annual electricity output: 156 GWh; Ongrid electricity: 132.6 

GWh; construction period: 2 years 

The finance assessment work is as per the requirements of “Economy assessment approach and 

parameters for the construction project”, which is jointly issued by the National Development and 

Planning Commission, and Ministry of Construction, and carried out in line with the current finance and 

5
tax policy as well as the current price systems. The calculation focused on cost and benefit, so as to 

explore its capability to make profit, payback ability etc finance condition, and further its finance 

feasibility. 

The calculation period assumed 20 years, 2 construction years, and 18 operation years. 

1.6.1 Cost estimation 

The generation cost includes: depreciation, O&M, salary and welfare, other cost and interest cost 

The integrated depreciation rate: 6.67%; O&M rate: 1.0%; Staff number: 150; average salary: 

20,000 RMB/a 

The annual gross cost and operation cost is calculated to 78.86 million RMB (first year after 

operation) and 45.16 million RMB respectively. 

1.6.2 Generation benefits 

1.6.2.1 Grid connection price 

The IRR is generally accepted as 12-15% by the similar foreigner project developer. Combined with 

the domestic situation, the IRR is taken as 12% for this project. Taking into account of the favorable 

policies for the grid-connected power plants, the grid-connected electricity price during operation period 

with and without VAT is 0.731 RMB/kWh and 0.806 RMB/kWh respectively. 

1.6.2.2 Sale revenue, tax and profit 

z Sale revenue 

The grid-connected electricity: 132.6 kWh; grid-connected electricity tariff: 0.806 RMB/kWh; sale 

revenue: 106.88 million RMB. 

z Tax 

The tax levied for the power projects include: VAT, sale surtax, income tax. 

VAT: 17%, exclusive of the price; 

Sale surtax: inclusive of urban construction tax and education tax, 7% and 3% respectively; 

Income tax: 33% 

z Profit 

Generation profit= (Generation income)-(generation cost)-(sale surtax) 

After-tax profit= (generation profit)-(income tax) 

1.6.3 Profit making ability analysis 

z The total FIRR (hereafter means after tax): 6.75% 

z Investment payback period: 10.26 years (ic=6%, excludes the construction). 

z Average investment profit rate: 4.97% 

z Average investment tax rate: 10.94% 

z Capital cost IRR: 12%, which means it is financially feasible. 

1.6.4 Conclusion 

The average grid-connected tariff during the operation period: Without VAT: 0.731 RMB/kWh; 

Include VAT: 0.806 RMB/kWh; Investment return period: 9.6 years; Capital cost IRR: 12%; overall 

project IRR 6.75%; higher than the coal-fired baseline IRR (6%). Accordingly, it is financially viable. 

6
1.7 Conclusions and suggestion 

1.7.1 Conclusions 

1.7.1.1 Necessity 

The RuDong 48MW stalk generation project is consistent with the 21st sustainable energy strategy plan, 

which is a positive contribution to JiangShu energy consumption. Meanwhile, this region has the 

advantageous generation and resource condition. The social and environmental benefits are also evident. 

Therefore, it is desirable to explore the local stalk resources. 

1.7.1.2 Technology availability 

 The 24MW stalk power plant has been successfully operated for 2 years in foreign countries. The 

combination of direct combustion technology and gasification technology has been quite mature. An 

environmental friendly biomass power plant with the most advanced technology in western country could 

consume 160,000 tons of stalks annually, and produce 200GWh/a. Its overall investment is 51 million 

Euros. The commercial operation proves to be very successful and technically viable. 

The overall capacity is 24MW, only 0.1% of the total capacity in JiangShu province. The electricity it 

produced could the power grid accept all. 

There are no major disadvantageous geology problems that could bring negative influences to this 

project according to the geology materials. 

The current road and transportation condition meet the requirements that the construction and 

feedstock transport need. 

The local government is willing to offer positive support by providing the necessary land. 

There are no negative factors that limit the project construction from the environment protection point 

of view. On the contrary, the project is beneficial for the environment. 

1.7.1.3 Evident social and environment benefits, desirable financial indicators 

Stalk is renewable resource. The RuDong power plant is positive contribution to JiangSu energy 

consumption as well as is environment friendly. It fills the blank in China in terms of the stalk utilization, 

which is significant for both the local economy development and improving the farmers’ life quality. The 

project capacity during phase I is 24MW, with total investment 33.322million RMB. The unit investment 

is 13,885RMB, which is substantially lower in comparison with the foreign biomass power plant with the 

similar scale. The local manufactured devices, except the imported boiler, conveyor systems etc, 

contributed to the lower cost. The financial analysis shows that the financial payoff ability is quite strong. 

The on-grid tariff is acceptable and financial indicator is reasonable. 

 

1.7.2 Suggestion 

With the high-speed development of the science and technology, the stalk power generation 

technology is becoming mature. Up to now, the foreign stalk generation is shifting from the pilot phase to 

the scale-up commercialization. As an emerging energy, government strong support is crucial to increase 

its competitively. In the worldwide, particularly in Germany, USA, Denmark, Spain etc, a series of 

favorable policies to promote the biomass resources utilization have been worked out, and has also 

achieved well effects. 

JiangSu province is one of the developed provinces in China. There is a large energy demand. 

However, the primary energy resources are quite limited. It is necessary to make efforts to develop the 

7
provincial stalk resources to make up the primary energy deficiency, so as to satisfy the national 

economy development and improve the provincial environment. There is a need to formulate some 

favorable policies in line with JiangSu’s condition to promote the stalk resources utilization and promote 

its commercial and scale-up development. 

z There should be favorable policies in terms of the tax, land utilization for the stalk generation 

as high- and new-technology. 

z Since the biomass raw material is generally collected from the farmers without any offset. 

However the present VAT has no definite regulation on this issue. It is recommended to 

provide 10% offset for buying the stalk from the farmers that is equivalent with the other 

agricultural productions. 

z All of the produced electricity should be bought strictly as per “Renewable Energy Law”. The 

stalk power plant does not need to regulate the peak load. The power transmission work, 

starting from the substation outlet of the power plant, to the designated substation for 

transmission and distribution, should be built by the utility. 

z It is recommended to offer bank loan plan, preferential loan interest, innovation fund and other 

policy support etc.

1.8 Annex 

z Annex 1-1:Investment plan and financing 

z Annex 1-2:Operation cost and income 

z Annex 1-3:Total cost 

z Annex 1-4:Repay capital with interest of loan 

z Annex 1-5: Profit and loss statement 

z Annex 1-6: Cash flow (capital fund) 

z Annex 1-7: Cash flow (total capital) 

8
2 Gaoyou Biomass Fixed-bed Gasification power generation 

2.1 Introduction 

Gaoyou city is located in an economic zone along the north of Yangtze River of Jiangsu province, and 

in the middle of Jiangsu province of Yangtze Delta and on the western fringe of Lixia River. Gaoyou city 

is neighbor with Xinghua city, connected with Jiangdu city, Hanjiang district and Yizheng city in the 

south, linked with Tianchang city (in Anhui province) and Jinhu county in the west, and bordered on 

Baoying county in the north. Total area of Gaoyou city is 1963 square kilometer, in which area of land 

covers 1175 square kilometer and water area 788 square kilometer. In 2004, there were 19 towns, 1 Hui 

nationality village (Xiang) and 1 provincial level economic development zone in Gaoyou city. The Basic 

information is shown in Table 2-1-1. 

Table 2-1-1 Basic Information of Gaoyou city(in 2004)

Items Amount Ranking* 

Population (104) 82.71 35

Local GDP(108 RMB Yuan) 85.3 35

Value-added of the first industry(108 RMB Yuan) 22 20

Value-added of the second industry(108 RMB Yuan) 35 37

Value-added of industry(108 RMB Yuan) 28 37

Value-added of the tertiary industry(108 RMB Yuan) 28.3 32

Per capita local GDP(Yuan/person) 10291 31

Total investment in fixed assets of urban (108RMBYuan) 32.8 36

Total revenue (108 RMB Yuan) 7.2 33

Per capital revenue(RMB Yuan) 873 29

Yield of grain (104 tons) 58.5 14

Output of oil crops(104 tons) 0.7 22

Output of meat(104 tons) 5.3 49

Total pre-tax profits of industrial enterprises with above

designated scale (108

 RMB Yuan) 4 35

Total retail sales of social consuming products (108 RMB Yuan) 24.3 31

Total amount of export(104US$) 9500 18

Actual direct investment from foreign merchant (104US$) 4072 35

Average wages of works and staffs at post (Yuan/year) 11814 29

Per capita net income of rural residential(Yuan/year) 4420 28

Per capital deposits of residential(Yuan/person) 7296 24

* It refers to Gaoyou city ranking within Jiangsu province.

Gaoyou city is located in the areas of Lixia River of Jiangsu province with a great quantity of straw 

resource. In 2004, yield of grain and oil crops was 585 thousand tons in Gaoyou city, and the amount of 

9
straw was 900 thousand tons. Because it has already applied harvester to gather in crops, the stalk of 

crops is left relatively high. The amount of straw available was about 450 thousand tons. If it considers 

that some of them were consumed by farmers themselves and some of them were crushed and returned to 

the farmland, the real amount of straw that can be used for power generation was about 300 thousand 

tons, among them stalk of wheat was 100 thousand tons, stalk of rice 170 thousand tons and stalk of rape 

(Brassica napus) 30 thousand tons. In addition, there are 100thousand mu reed growing at Gaoyou 

lakeside, so the stalk of reed can be also used for gasification power generation. 

2.2 Introduction of owner 

The owner of this project is LinYuan Science & Technology Development Ltd. Company (LinYuan 

Company) of Gaoyou City. 

2.2.1 Basic information and assets of LinYuan Company 

LinYuan Science & Technology Development Ltd. Company was established in 1991, and is an 

agricultural management entity integrated gain, forestry, fishery and seedling, and an agricultural 

comprehensive development and management ecological enterprise. LinYuan Company is located within 

Gaoyou city. It has 3000 mu wood of poplar, 1000 mu aquatic base, 500 mu seedling base and 1000 mu 

high quality and improved varieties of grain. 

LinYuan Company is a shareholder enterprise with 25% shared by collective and 75% shared by 

private. Registered capital is 6 million RMB Yuan, and currently it has 46.5 million RMB Yuan of fixed 

assets (excluding the land). Total assets owned by LinYuan Company is 53 million RMB Yuan with zero 

liabilities. In 2004, it materialized over 3 million RMB Yuan of revenue. 

2.2.2 The qualifications to undertake this project 

LinYuan Science & Technology Development Ltd. Company is always to dedicate itself to local 

agricultural comprehensive development, and to implement projects integrated agriculture, ecology and 

environment protection. In order to better use waste straw resources, LinYuan Company invested 1 

million RMB Yuan in the test of straw briquetting and carbonization in 1995, and had a series of data 

available for purpose of development and mastered practical experience. However, due to technical and 

external reasons, it has a slow progress in this. China Renewable Energy Promotion Law has been issued 

in this year, and renewable energy technology has been developed greatly, all of which make LinYuan 

Company’s envisagement about greatly utilization of straw become possible. Through a series of 

investigation and on-site survey, LinYuan Company decides to closely cooperate with enterprises that 

willingly do something in renewable energy industry and makes contributions to straw 

commercialization utilization in large scale. 

2.3 Options of technical processes 

According to the current status of straw power generation at home and abroad and real situation of 

Gaoyou city, it plans to select the technology of fixed bed countercurrent gasification. The reasons for 

this selection are: 

In Gaoyou city, it takes a household as a unit to make agricultural production. Each household may 

provide about 30 thousand tons straw every year. If it adopts a technology of direct combustion power 

generation, the installed capacity of power plant will be 25 MW, and it will consume about 200 thousand 

tons of straw every year. If calculation based on 30 thousand tons straw provided by a household each 

year, it needs collect and purchase straw from 67 thousand rural households. In Gaoyou, the harvest of 

agriculture is two seasons per year, so it will try to complete the purchasing trade of 130 thousand straws 

collecting every year. This is really a huge workload for them, and causing quite high cost for straw 

collecting. And thus, it is obviously the direct combustion is not suitable for real situation of Gaoyou. 

At present, boiler using for straw direct combustion power generation is often to consume one kind of 

raw fuel, whereas, one kind of biomass material cannot satisfy the needs by 25 MW straw power plant. 

10
Therefore, it chooses technical process of straw gasification power generation that can consume various 

biomass materials. 

2.4 Targets of project construction 

The overall targets of project construction are: 

z Total installed capacity of 4000kW; annual power generation of 26 GWh; power connected with 

grid of 22.88 GWh annually. 

z About 28-30 thousand tons of stalks of crops and forestry residue are consumed each year. 

z The system of gas combustion purification and wastewater disposal facilities discharging satisfies 

the national standards. 

z This project is run in a way of commercial business. 

z The installed capacity of this project is 4000 kW, and the period of construction is one year. 

2.5 Technical routes 

Through the analysis on existing technology of straw power generation at home and abroad, it will 

adopt fixed bed straw gasification power generation as technical process route for this project. The 

technical flow chart is shown as following: 

 Power connecting with grid

Crushing Solidifying 

Crushing Solidifying 

Crushing Solidifying 

Crushing Solidifying 

Gas generator 

Gas purification system 

Gas reserve holder 

Internal combustion 

power generator 

As shown in above-mentioned chart, the technical route used by this project is: after stalks of crops are 

crushed and briquetted, and then making it ready for raw materials that is needed for gasification. All of 

raw materials is collected and transported to straw gasification power generation plant. With gasification 

generator, the gas is generated. After gas is gong through a series of such processes as cooling, de-tarring 

and de-sulfuring, and then put purified gas into gas reserve holder; the clean gas is sent to internal 

combustion power generator for power generation. 

The construction of this project consists of two systems: straw preparation system, including straw 

collecting, reserve, crush, briquette and transport; the other one is straw gasification power generation 

system, including straw gasification, gas purification, power generation and power transmission and 

distribution. 

11
2.6 Straw collection system 

The operation of straw power plant depends on the supply straw to a great extent. Therefore, it is 

important to built straw collection system. 

2.6.1 Collection system frame 

The straw for generation power comes from 10 straw processing sites. (The economic analysis of these 

sites is shown in the tenth part of this report). Each site has 30-40 agents for straw collection, and then 

each agent purchase the straw form 100 household rural residents (shown as Figure) 

Straw power plant 

Straw processing site (ten site) 

Straw collection agent (200-300 peoples) 

Farmer 

(Each agent takes charge 50 household farmers. Each farmer provides 1.5 tons straw)

2.6.2 Collection process 

2.6.2.1 Straw processing site 

The straw power plant will establish 10 straw processing sites in certain radius. The distance between 

these sites from the power plant is about 5-10 kilometer. Furthermore, the distance between two sties is 

about 5 kilometer. The main assignment of these sites includes: 

z Collect and storage straw 

z Smash and solidify straw 

z Transport straw according to the arrangement of the biomass power plant 

The production of each straw processing site is 4000 tons every year. Each site has tow straw 

solidifying machines, and the matching equipment, such as smash, drying and transportation. 

Each straw process site manages 30-40 agent of straw collection. These agents will collect straw from 

the farmer to directly deliver to the straw process sites and contracts with each farmer to confirm the 

number, quantity and price of straw. 

2.6.2.2 Agent of straw collection 

The agent of straw collection is the key of relation between farmers and straw process site, therefore, 

which is main the peasant in the local area of the site. In the light of the scale of village, each village will 

select 3-4 agents and each agent will be charged with 50 household farmers. 

12
2.6.2.3 Farmer 

In the collection system of this project, the main task of farmer is only agreeing with the straw bargain 

according to the acceptable price. The farmers need not consider the transportation and drying of straw. 

2.6.3 Straw price 

For correctly confirming the straw price, the investor test for the straw purchase in the summer in 2005. 

The result is shown in Table2-6-1 

Table 2-6-1 Straw collection cost 

Item Cost (Yuan/tons) Note 

Purchase cost 50 Exclude collection, drying and delivering 

Collection worker salary 50 The worker is charged with collecting the 

straw in the cultivated field 

Worker salary for raw 

straw transportation 

20 The transportation distance is between the 

cultivated field and the straw drying site 

Keeper salary 30 The keeper is charged with incepting, drying, 

stacking and keeping straw in the straw 

drying site 

Dry straw transportation 

cost 

10 The transportation distance is between the 

straw drying site and the straw processing site 

Total 160 

The table shows the total cost form the cultivated filed to the processing site is about 160Yuna/tons. If 

the site purchases the straw in the light of 190Yuan/tons price, the profit of agent will be 30 Yuan/tons. 

2.6.4 Prevention of price risk 

With straw power plant operating, the straw consumption will increase, which can induce the straw 

price increasing to some degree. 

For preventing the risk of straw price increasing, the two measures will be adopted. 

z Enlarge straw collection radius. In the range covered by the straw collection system, the straw 

supply should exceed the straw demand. 

z Increase straw purchase price of processing site. Because the worker salary is decided by the 

manpower resource in the local, the salary will not increase with straw power plant operating. 

Therefore, the uncertain factor of straw price increasing is the purchase price for raw straw, which 

can be confirmed 70-80 Yuan/tons to remain the room for price increasing. 

2.7 Main technical and economic indicators of system 

2.7.1 Technical indicators 

z Straw use 28535 t/year 

z Capacity of maximum gas generated 10000 m3

/h 

z Heat value of gas 1350 kcal/m3

z Capacity of generator 4000 kW 

z Annul power generation 26 MWh 

z Annual power grid connection 22.88 MWh 

z Area covering (gasification power station)10000m2 

z Rate of gas generated by straw 1.86 m3

/kg 

z Straw use by unit power generation 1.098 kg/kwh 

z Gas tar content <10 mg/m3

13
z Gas sulfur content <20 mg/m3

z Life-span >15 years 

7.2 Economic indicators 

z Total investment 33.826 Million Yuan 

In which: interest during construction 682 Thousand Yuan 

z Investment in fixed assets 33.14 Million Yuan 

In which:Straw power plant 28.48 Million Yuan 

Site for straw processing 4.66 Million Yuan 

Research & experiment 1.87 Million Yuan 

z Amount of sites for straw processing 10 

z Annual net revenue from each straw processing site 28.6 Thousand Yuan 

z Annual net revenue of straw power plant (before tax) 5.36 Million Yuan 

z Annual net revenue of straw power plant (after tax) 3.577 Million Yuan 

z IRR (before tax) 10.85 % 

z IRR (after tax) 7.59 % 

z Investment payback period (before tax) 7.59 Year 

z Investment payback period (after tax) 9.04 year 

z Self-owned capital IRR (after tax) 12.02 % 

z Self-owned capital NPV (after tax) 6.469Million Yuan 

z Self-owned capital investment payback period (after tax) 10.11year 

2.8 Economic analyses 

We adopt the method described in “Economic Analysis of Feasible Study for Construction Project” 

issued by the National Development and Reform Commission to make our economic analysis 

2.8.1 Basic data 

z Scale of project (Installed capacity) 4000 kW

z Amount of site for straw processing 10

z Construction period 12 months 

z Share of self-owned capital 30% 

z Annual interest rate 5.76% 

2.8.2 Equipment and construction 

Main equipment of straw power generation plant includes systems of gasification, gas purification, 

power generation, power transforming & transmission and auxiliary. The detail information is shown in 

Table 2-8-1. 

Table2-8-1 Main equipment of straw gasification station 

No. Equipment Amount Unit price Total price 

1 Machines for straw crushing and briquette 20 23.3 466 

2 Gasification system 1 400.5 400.5 

3 Gas purification system 1 195 195 

4 Power generation system 1 1041.5 1041.5 

5 Power transforming & transmission 1 120 120 

6 Auxiliary system 1 40 40 

7 Total 1 2263 2263 

Construction of power plant mainly consists of gasification workshop, power generation work and raw 

materials storehouse. Total area covers 1870 m2 with building cost of 1014 Yuan/m2

. Main buildings are 

listed in Table2- 8-2. 

14
Table2-8-2 List of buildings 

Buildings Area (M2

) Unit cost (Yuan/M2) Total cost (104 Yuan) 

Gasification workshop 800 1200 96 

Power generation workshop 150 1200 18 

Pump-house 20 800 1.6 

Recycled water pool 100 600 6 

Waste water disposal pool 50 600 3 

Main controlling room 50 1000 5 

Raw material storehouse 400 600 24 

Offices (Lab) 300 1200 36 

Total 1870 1013.9 189.6 

2.8.3 Investment for Straw process sites and operations 

It plans to set up 10 sites for straw processing. The power plant will provide 2 straw briquette 

machines and 2 crushing machines for each site, with annual production of 3000 tons briquette straw. For 

straw processing sites, it mainly has crushing machine, briquette machine and tractor. Among them, the 

crushing machine and briquette machine will be provided by straw power plant, so it only needs the 

processing site to prepare transporting vehicles by themselves. The investment for this is about 25 

thousand Yuan. 

The operation cost of straw processing site mainly refers to the costs of salary, electricity, raw 

materials and product transport. The power plant will purchase processed briquette products at a price of 

300Yuan per ton with net profits of 28600 Yuan. The detailed analysis please sees Table2-8-3. 

Table 2-8-3 Investment and operation cost of processing site 

No. Items Unit Annual useUnit priceInvestment

1 Input 541400 

1.1 Maintenance Yuan/yr. 10000 

1.2 Salary Person.month/yr. 48 800 38400 

1.3 Electricity fee Yuan/kWh 120000 0.75 90000 

1.4 Total cost of raw materials 384000 

1.4.1Cost of raw material purchasing Yuan/ton 2000 190 380000 

1.4.2Rent for site 2000 2 4000 

1.5 Cost of product transport Yuan/ton 1900 10 19000 

2 Output 570000 

2.1 Sales of briquette straw Yuan/ton 1900 300 570000 

3 Tax 0 

3.1 Business tax 0% 0 

3.2 Construction fund 7% 0 

3.3 Education surcharge 3% 0 

4 Net profits 28600 

15
2.8.4 Investment in fixed assets 

Total investment of this project is 33.83 million Yuan, among them investment of fixed assets is 33.14 

million Yuan, and interest during the construction is 682 thousand Yuan, research & experiment is 1.87 

million Yuan. The crushing machine and briquette machine are provided by power plan with total 

investment of 4.66 million Yuan. The transport vehicles will provide by raw materials processing site 

itself. Investment of fixed assets is detailed in Attached Table 1. 

2.8.5 Scheme of investment 

Total investment of this project is 33.83 million Yuan, in which self-owned capital accounts for 30% 

with 10.15 million Yuan, and loan from commercial bank accounted for 70% with 23.68 million Yuan. 

The rate of bank interest is based on 5.67% annually. The detailed scheme of investment is shown in 

Table2-8-4. 

Table 2-8-4 Scheme of investment 

Construction period No. Item 

1 

Total 

1 Total investment 3382.61 3382.61 

1.1 Investment of fixed assets 3314.41 3314.41 

1.2 Regulating tax of fixed assets investment 0.00 

1.3 Interest during construction 68.19 68.19 

1.4 Operating fund 0.00 

2 Capital channeling itself 3382.61 3382.61 

2.1 Itself-owned capital 1014.78 1014.78 

In which: used for operating fund 0.00 

2.2 Loan 2367.83 2367.83 

2.2.1 Long-term loan 2367.83 2367.83 

2.2.2 Loan for operating fund 0.00 

2.2.3 Other short-term loan 

2.3 Others 

2.8.6 Operation cost and profits 

2.8.6.1 Operation cost 

Annual operation cost is 10.68 million Yuan. The operation cost and total cost is detailed in Attached 

Table 2 and Attached Table 3. 

2.8.6.2 Profits 

For this project, 22.88 MWh will be put on power grid. If the price of electricity sold to power grid is 

0.727 Yuan/kWh, an annual net profit is 5.36 million Yuan (before tax) and 3.58 million Yuan (after tax). 

2.8.7 Tax 

This project mainly consists of value-added tax, sale tax surcharge and income tax. The sale tax 

16
surcharge includes city construction fund and education surcharge with rate of 5% and 3% of 

value-added tax. Rate of income tax is 33%. In this report, it does not consider any preferential for 

taxation. 

2.8.8 Analysis on cash flow 

Based on above-mentioned data, if the project is 15 years life-span (excluding construction period), the 

resulted current flow is as following: 

z IRR:10.85% (before tax),7.59% (after tax) 

z NPV (basic profit rate of 6%):11.66 million Yuan (before tax),3.58 million Yuan (after tax) 

z Investment payback period:7.59 years (before tax),9.04 years (after tax) 

z Self-owned capital IRR: 12.02% (after tax) 

z Self-owned capital NPV: 6.47 million Yuan 

z Self-owned capital investment payback period: 10.11years 

The detailed cash flow analysis is shown in Attached Table 4-5. 

2.8.9 Sensitive analysis 

It carries out the sensitive analysis on main influent factors of straw gasification power generation 

project. The basic method is to increase and decrease 10% of each influent factor, and then it calculates 

IRR before income tax of this project. It takes the following influent factors to analyze project sensitive: 

z Investment 

z Price of electricity that put on power grid 

z Price of raw material purchasing 

z Rate of interest of loan 

Data in Table 9-5 shows that price of electricity is a major factor to influence the profits of project with 

degree of sensitive of 5.12. For this regard, the rational electricity price is a key element to let this project 

obtain profits. Under the guarantee of renewable energy law, the generated power will be totally 

purchased, which can be brought about relatively good economic benefits. At time of this project is 

established, “China Renewable Energy Law” would have been put into effects. So it can get beneficial 

from “China Renewable Energy Promotion Law”, in which it stipulates that it should purchase total 

renewable generation with fixed electricity price. Therefore, it can great improve its capacity to combat 

the risk of project. 

17
Table 2-8-5 Sensitive analysis of straw gasification power generation 

Influent factor Value Rate of 

changing IRR(%)

Rate of IRR 

changing 

Co-efficiency of 

sensitive 

Production load 7150.0 10% 15.64 30.12% 

(6500 hours/yr.) 5850.0 -10% 9.69 -19.38% 2.48 

Fixed assets 3645.9 10% 9.83 -18.22% 

(33.144 M Yuan) 2983.0 -10% 16.2 34.78% 2.65 

Electricity price 0.800 10% 18.73 55.82% 

 (0.727Yuan/kWh) 0.654 -10% 6.42 -46.59% 5.12 

Rate of loan interest 0.634% 10% 12.02 0.00% 

0.576% 0.518% -10% 12.43 3.41% 0.17 

2.9 Annex 

z Annex 2-1: Investment 

z Annex 2-2:Operation coat and income 

z Annex 2-3: Total cost 

z Annex 2-4:Cash Flow (Total capital) 

z Annex2-5: Cash Flow (Capital Fund) 

18
3 Xinhua biomass fliuldized bed gasification generation power 

3.1 Project description 

3.1.1 Project introduction 

To construct a 4000 kW biomass power plant using the rice hull from rice milling plant in Daiyao 

Town, Xinghua City, Jiangsu Province. The power plant will be equipped with a 2500 kW internal 

combustion generator unit and a 1500 kW steam turbine generator unit. 

3.1.2 Project owner 

The project owner is the Xinghua Suyuan Biomass Power Generation Co. Ltd jointly set up by 

Zhenjiang Zhongke Huadian New Energy Co. Ltd and Daiyao Town of Xinhua City, Zhejiang Province. 

3.1.3 General description of project location 

Xinghua city is located at the economic belt of Yangtze River Delta, and in the influx center of Taizhou, 

Yangzhou, Tantong, Yancheng economic zone, Jiangsu Province. It has advantages in natural resources 

with abundant water. There are nearly 1 million Mu water areas with the water quality reaching Standard 

III of national land water. The air quality is higher than Standard II of national level. The total soil is 3.59 

million Mu and the soil is fertile. In 2003, the commissariat production reached 925,200 tons, the cotton, 

13,700 tons, and the oil plants 37,100 tons. The annual production of agricultural straws is 1.04 million 

tons, with the obtainable 600,000 tons. 300,000 tons of it can be used as energy (power generation). 

The project site, Daiyao Town, is located in the east of Xinghua City, which is the influxing area of 

three cities Xinghua, Dafeng and Dongtai. The area is 96.9 square meters with a population of 72,000. 

The east of Daiyao Town is 204 national road, and in the west, Ningyan first class road, Ningjingyan 

highway, in the south, provincial, and in the north first class road. Also, Xinchang railway, national 

inner-river route is along the border. Therefore, the transportation is quite convenient. 

The project is built in the industrial district of Daiyao Town. Within 30 kilometers, there are 300, 000 

mu, producing 300,000 tons crops annually. The production of straws is approximately 330,000-350,000 

tons. The project only utilizes 10% of the total production. In addition, Daiyao Town has great numbers 

of milling plants with annual production of rice hulls 10, 000 tons. The rice hulls could be used directly 

as the raw materials for fluidized bed gasification. 

19
3.2. Technical Process 

3.2.1 Technical flow 

Air Fule Water 

Ash 

Biomas

Ash 

Wastewater 

3.2.2 Gasification power system 

The biomass circulating fluidized bed gasification combined power generation device consist of 

materials feeding device, steam generating devices, waste heat boiler, tar deep cracking device, gas 

cleaning device, air pre-heating device, gas generator, steam generator unit, circulating cooling water 

device, water treatment device, electric control system, waste water and residues treatment system. 

3.2.3 Device equipping Plan 

The proposed 4000 kW biomass gasification power plant will adopt the scheme of biomass 

gasification combined circulate power generation. The specific devices are: 

z One circulating fluidized bed gasification boiler 

z Six 500 kw gas internal combustion generator (one is for spare wheel) 

z One waste heat boiler 

z One 1500 kw steam turbine generator unit 

Table 3-2-1 Energy consumption index of 4000 Biomass power plants 

No Project Parameter 

1 Capacity of gas internal combustion generator unit(kw) 5X500 

2 Capacity of steam turbine generator unit(kw) 1500 

3 Power generation of the power plant per hour(kwh/h) 4000 

4 Power generation of the power plant per year (104

kwh/y) 2600(6500 hour/year) 

5 Electricity consuming ratio of the power plant(%) 15 

6 Feed-in electricity annually(104

kwh/y) 2210 

7 Biomass consumption for power generation (kg/kwh) 1.1 

8 Annual consumption of biomass(t/y) 27000 

9 Gross heat efficiency of the power plant(%) 28 

10 Annual replacement amount of standard coal(t/y) 8000 

11 Consumption of circulating water per hour(Yangtze river m3

/h) 585 

12 Consumption of other water resources per hour(tap water m3

/h) 26 

20
3.3 Feedstock collection system 

The feedstock includes two types, the one is rice husk, and the other is straw. The rice husk need not 

be process to gasify in the gasification boiler, and the straw nee be smashed to use. Furthermore, because 

the origin of rice husk and straw is different, the collection method and collection cost are different. 

3.3.1 Rice husk 

There are many small grinding rice mills near the power plant and surrounding area, which produce 

100 tons rice husk every year. The small parts of the rice husk are sold for the feed process factory, and 

the other is use as the waste. 

Through survey and negotiate, the purchase price of rice husk will be about 200 Yuan/tons. The price 

may increase to some extent. But the range of fluctuation will not be large because the object of 

purchaser is enterprise and the rice husk is the waste. Considering 10% increasing, the price will be 220 

Yuan/tons. 

The transportation cost of rice husk is 20 Yuan/tons, which includes the distance between grinding rice 

mill and collection site, and the collection site and power plant. The rice husk need be transferred by the 

collection site because the power plant cannot store all rice husk. 

The maintenance cost of rice husk is about 30 Yuan/tons, which including the field, storehouse, keeper, 

management worker, anti-fire and profit of site. 

In the range with 5-kilometer radius, the total amount of rice husk is about 8000-10000 tons. From 

grinding rice mill to power plant, the collection cost is 250-207 Yuan/tons. 

3.3.2 Straw 

Xinhua is an agricultural country, which has abundant straw resource. The total amount of straw for 

generation power is about 300 thousand tons, which can meet with the demand of the power plant. The 

straw collection will adopts the tower structure, namely, agent will collect the straw from farmer, and 

then collection site purchase the straw form the agent. 

The tem collection site will be established to charge with the purchase of straw and rice husk. The 

distance of the site is about 2-3 kilometer. Furthermore, the distance between the site and power plant is 5 

kilometer. 

Each site will manage 30-40 agents for collecting straw. The agent will be from the local farmer and 

charge with collecting the straw form the cultivated field. The straw will be delivered to the filed with the 

agent and dried to reach the demand for straw moisture. 

Each agent will charge with 50 household farmers around the collection filed. The work of agent will 

include delivering the straw to the field owned by agents, and drying, stacking, and transportation to the 

collection site. 

Based on the survey, the detailed collection cost is as follows: 

z Purchase cost for raw straw: 50 Yuan/tons 

z Agent cost: 70 Yuan/tons 

z Collection site cost: 30Yuan/tons 

z Profit of site: 15-20 Yuan/tons 

z Transportation cost from site to power plant: 10 Yuan/tons 

21
According to the above, the total cost of collection from cultivated filed to power plant is 180 

Yuan/tons. The price increasing will be form directly collecting the straw from the farmer. The increasing 

rate is about 60%, so the total cost is 201 Yuan/tons, which can be accepted by the power plant. 

3.4 Project construction 

3.4.1 Site selection 

The initial decision of the plant site is in the industrial zone in the west of Daiyao Town, Xinghua City. 

The reasons are as follows: 

z There are abundant raw materials 

z The water resources are rich. The Chelu River can not only provide the water for production, 

but also providing water route for raw materials transportation 

z Parts of public utilities could be utilized to reduce the initial investment. 

3.4.2 Transportation 

The project site, Daiyao Town, is located in the east of Xinghua City, which is the influxing area of 

three cities Xinghua, Dafeng and Dongtai. The area is 96.9 square meters with a population of 72,000. 

The east of Daiyao Town is 204 national road, and in the west, Ningyan first class road, Ningjingyan 

highway, in the south, provincial, and in the north first class road. Also, Xinchang railway, national 

inner-river route is along the border. Therefore, the transportation is quite convenient. 

Both water route and highway can be used for transporting materials and equipments during the 

construction period of the power plant, as well as raw materials when in operation. 

3.5 Environmental impact analysis 

From the aspect of environment, utilizing biomass for power generation could obtain zero emission of 

CO2 and thus contribute to solve problem of the green house effect caused by over using fossil energy. 

As the density of biomass materials is low, it will consume more energy during the transportation 

comparing with the conventional energy. This consumption cost considerably, and must not be neglected. 

Taking into consideration the energy used during transportation, smashing and drying process, it is 

estimated that the CO2 generated will be 90% less that of fossil energy. In addition, it could also reduce 

the emission of CO, SO2, NOX and other pollutants. Therefore, it could contribute to improve the 

environment. 

22
3.6 Investment estimation and financing resources 

3.6.1 Investment estimation 

Table3-6-1 Investment estimation of 4000kw biomass power plant 

No Item Subtotal 

1 Investment in fixed assets 3675.6 

1.1 Project cost 3063.0 

1.1.1 land and plant construction 298.5 

1.1.2 Thermal power system 1057.0 

1.1.3 Fuel supply system 100.0 

Straw collection and smashing system 100.0 

1.1.4 Dust removal system 28.5 

1.1.5 Chemical water treatment system 100.0 

1.1.6 Water supply system 23.0 

1.1.7 Electric power system 399.0 

1.1.8 Hat engineering controlled system 100.0 

1.1.9 Fuel gas cleaning system 200.0 

1.1.10 Cabinet 120.0 

1.1.11 Others 537.0 

1.2 Provisional finance 612.6 

1.2.1 Basic provisional finance(12%) 367. 6 

1.2.2 Appreciation provisional finance(8%) 245.0 

3Interest during construction 75.6 

 Total investment: 1+2+3 3751.2 

Total investment of the project is 37. 512 million Yuan, among which 36.756 million Yuan are 

invested in fixed assets; the interest during construction period is 756,000 Yuan. 

3.6.2 Financing 

The finance of this project is proposed to have 30% free finance (capital investment), which is 11.254 

Yuan, 70% from the bank loan, which is 26.258 with the annual interest rate 5.76%. 

3.7 Fiscal analysis 

3.7.1 Basic data 

3.7.1.1 Project lifetime 

The calculation period of this project is 15 years (exclusive of construction period), and the 

construction time frame is 12 months. 

3.7.1.2 Component of construction investment 

z Fixed assets investment: According to the calculation, it is around 36.756 Yuan 

z The construction interest is the loan interest for the fixed assets investment. The interest during this 

period will be taken into account of total investment in fixed assets investment. It is calculated to be 

756,000 Yuan. 

z Total investment: It is 37.512 Yuan. 

23
3.7.2 Operation cost 

Please refer to the table below for the operation cost of the project and the overall cost are included in 

the appendices. 

Table 3-7-1 Operational cost of the 4000kw straw power plant Unit: 10, 000 yuan 

No Item Unit Annual cost Unit price Sub-total 

1 Input 971.8

1.1 Maintenance 70.0

1.2 Salary 100.0

1.2.1 Administrative staff 104yuan/man year 8 2 16.0

1.2.2 Operational staff 104yuan/man year 38 2 76.0

1.2.4 Maintenance 104yuan/man year 4 2 8.0

1.2.3 Assisting staff 104yuan/man year 10 2 20.0

1.3 Fuel & power 801.8

1.3.2 Water cost Yuan/ton 5687.5 1.2 0.7

1.3.3 Pollutants treatment Yuan/ton 5687.5 0.6 0.3

1.3.4 Raw material Yuan/ton 28600.0 280 800.8

1.4 Depreciation 232.8

2 Output 1646.5

2.1 Electricity sale yuan/kwh 2210.0 0.714 1646.5

3 Tax 135.0

3.1 Value added tax 122.7

3.1.1 Output tax(17%) 239.2

3.1.2 Input tax(17%) 116.5

3.2 

City maintenance 

& construction(7%) 8.6

3.3 Education add-ons(3%) 3.7

3.7.3 Fiscal assessment 

The feed-in tariff of this project is 0.745 Yuan/kwh. The internal rate of return (IRR) of the total 

finance is 6.06% (after tax), and 8.74% (before tax). The investment payback period is 11 years (after tax) 

and 9.63 years (before tax). Please refer to the appendices for cash flow. 

The capital investment IRR of this project is 12.04% (after tax). The Fiscal net present value is 1.702 

million Yuan. The payback period is 11.14 years. Please see the appendices for the project cash flow. 

3.7.4 Sensitivity analysis 

After analysis of four uncertain factors, i.e. production load, construction investment, feed in tariff, and 

interest rate of loan, it shows that the biggest factor is the feed in tariff to impact the economic benefits. 

As the renewable energy law has been in effect, and the project belongs to the renewable energy power 

generation, the access to the gird and the tariff could be guaranteed by the law. Therefore, the risk could 

be avoided. 

24
Table3-7-2 Sensitivity analysis of the 4000kw biomass power plant 

Uncertain factors Changing ratio Value IRR Changing ratioSensitivity coefficient

10% 7150.0 14.68 21.93% Production load 

(6500 hour/year) -10% 5850.0 8.96 -25.58% 2.38 

Construction investment 10% 4043.2 9.57 -20.51% 

(36.756million yuan) -10% 3308.0 14.67 21.84% 2.12 

Feed in tarrif 10% 0.820 16.96 40.86% 

(0.745 yuan/kilo hour) -10% 0.671 4.61 -61.71% 5.13 

10% 0.634% 11.96 -0.66% Interest rate of loan 

0.576% -10% 0.518% 12.15 0.91% 0.08 

3.7.5 Analysis of investment benefits 

 Please see the table below for the analysis of the project investment benefits 

Table 3-7-3 Investment benefits index of the 4000kw straw power plant 

Index Value(%)

Annual average return 164.2 

Investment return rate 4.4 

Annual average profit tax 380.1 

Investment profit rate 10.1 

Capital investment return rate 14.6 

Capital investment profit tax rate 33.8 

3.8 Annex 

z Annex 3-1: Total cost 

z Annex 3-2: Repay capital with interest of loan 

z Annex 3-3: Profit and loss statement 

z Annex 3-4: Cash flow(total capital) 

z Annex 3-5: Cash flow (capital fund)

25
26

Annex 1-1:Investment plan and financing Unit: 10,000RMB 

Construction period Operation period No. Item 

1 2 3 

Total 

1 Total investment 16325.52 16997.31 33322.83 

1.1 Fixed asset investment 15996.40 15996.40 31992.80 

1.2 Regulation tax on fix asset investment direction

1.3 Interest during construction period 329.12 1000.91 1330.03 

1.4 Flow capital 0.00 

2 Financing 16325.52 16997.31 33322.83 

2.1 Self capital 4897.66 5099.19 9996.85 

2.2 Bank loan 11427.87 11898.12 23325.98 

2.2.1 Long-term bank loan 11427.87 11898.12 23325.98 

2.2.2 Flow cash loan 0.00 

2.2.3 Other short-term loan 

2.3 Other 

Annex1- 2:Operation cost and income Unit: 10,000RMB 

No. Item Unit Quantity Unit price Total 

1 Input 6442.56 

1.1 O&M 202.62 

1.2 Salary 10,000/a/per capita 150 2 300.00 

1.3 Material RMB/ton 14 280 3913.73 

1.3.1 Collection RMB/ton 14 200 2795.52 

1.3.2 Package RMB/ton 14 30 419.33 

1.3.3 Transportation RMB/ton 14 50 698.88 

1.4 Depreciation 2026.21 

2 Output 10687.56 

2.2 Electricity sale RMB/kWh 13260 0.806 10687.56 

3 Tax 1082.66 

3.1VAT 984.23

3.1.1 Sale VAT rate(13%) 1552.89

3.1.2 Buy VAT rate(17%) 568.66

3.2Urban construction tax(7%) 68.90

3.3Education surtax(3%) 29.53
Annex 1-3:Total cost 

Construction 

period Operation period (full capacity) No. Item 

1 2 1 2 3 4 5 6 7 8 9 10 11 12 13 

1 Fuel & power 3913.7 3913.7 3913.7 3913.7 3913.7 3913.7 3913.7 3913.7 3913.7 3913.7 3913.7 3913.7 39132 Salary and welfare 300.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 300.0 3004 O&M 202.6 202.6 202.6 202.6 202.6 202.6 202.6 202.6 202.6 202.6 202.6 202.6 2025 Depreciation 2026.2 2026.2 2026.2 2026.2 2026.2 2026.2 2026.2 2026.2 2026.2 2026.2 2026.2 2026.2 20266 Amortize cost 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 07 Finance cost 329.1 1000.9 1343.6 1241.1 1129.1 1006.8 873.3 727.3 568.0 393.8 203.7 0.0 0.0 0.0 07.1 Long-term loan interest 329.1 1000.9 1343.6 1241.1 1129.1 1006.8 873.3 727.3 568.0 393.8 203.7 0.0 0.0 0.0 07.2 

Flow capital loan  interest 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0

9 Subtotal (1+2+...+9) 329.1 1000.9 7786.1 7683.6 7571.7 7449.4 7315.8 7169.9 7010.5 6836.4 6646.2 6442.6 6442.6 6442.6 6442

Hereinto:Fixed cost 0.0 0.0 2528.8 2528.8 2528.8 2528.8 2528.8 2528.8 2528.8 2528.8 2528.8 2528.8 2528.8 2528.8 2528 Variable cost (1+2+7) 329.1 1000.9 5257.3 5154.8 5042.9 4920.6 4787.0 4641.1 4481.7 4307.6 4117.4 3913.7 3913.7 3913.7 3913

10 

Operation cost (9-5-6-7) 0.0 0.0 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416

27
Annex 1-4:Repay capital with interest of loan Unit: 

Construction period Operation period (full capacity) Item 

1 2 1 2 3 4 5 6 7 8 9 10 11 12 13 

Repaying loan and interest Accumulative loan and interest in beginning year 0.0 11427.9 23326.0 21546.6 19603.0 17479.9 15160.7 12627.5 9860.3 6837.6 3535.9 0.0 0.0 0.0 0Loan 0.0 11427.9 23326.0 21546.6 19603.0 17479.9 15160.7 12627.5 9860.3 6837.6 3535.9 0.0 0.0 0.0 0Interest of construction period 329.1 1000.9 Annual loan 11427.9 11898.1 0.0Interest 329.1 1000.9 1343.6 1241.1 1129.1 1006.8 873.3 727.3 568.0 393.8 203.7 0.0 0.0 0.0 0Return loan 0.0 0.0 1779.4 1943.6 2123.1 2319.1 2533.3 2767.2 3022.7 3301.8 3535.9 0.0 0.0 0.0 0Return interest 329.1 1000.9 1343.6 1241.1 1129.1 1006.8 873.3 727.3 568.0 393.8 203.7 0.0 0.0 0.0 0Capital source for repay loan 3122.9 3184.7 3252.2 3326.0 3406.5 3494.5 3590.6 3695.6 3810.3 3933.1 3933.1 3933.1 3933Profit 1096.7 1158.5 1226.0 1299.8 1380.3 1468.3 1564.4 1669.4 1784.1 1906.9 1906.9 1906.9 1906Amortize 2026.2 2026.2 2026.2 2026.2 2026.2 2026.2 2026.2 2026.2 2026.2 2026.2 2026.2 2026.2 2026Depreciation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0

28
Annex 1-5: Profit and loss statement 

Construction 

period Operation period (full capacity) 

Item 

1 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 

Selling income 10688 10688 10688 10688 10688 10688 10688 10688 10688 10688 10688 10688 10688 10688 1068Total cost 329 1001 7786 7684 7572 7449 7316 7170 7011 6836 6646 6443 6443 6443 6443 6443 644VAT 1819 1921 2033 2156 2289 2435 2594 2768 2959 3162 3162 3162 3162 3162 316Profit 600 634 671 711 755 804 856 914 976 1044 1044 1044 1044 1044 104Income tax 1219 1287 1362 1444 1534 1631 1738 1855 1982 2119 2119 2119 2119 2119 211Profit after income tax 1219 1287 1362 1444 1534 1631 1738 1855 1982 2119 2119 2119 2119 2119 211Distributed profit 122 129 136 144 153 163 174 185 198 212 212 212 212 212 21Surplus accumulation fund No distributed profit 1097 1159 1226 1300 1380 1468 1564 1669 1784 1907 1907 1907 1907 1907 190Accumulated non-distributed profit 1097 2255 3481 4781 6161 7630 9194 10863 12648 14554 16461 18368 20275 22182 2408

Calculation indicators Investment profit rate(%) 4.97 

Investment tax rate(%) 10.94 

29
Annex1-6: Cash flow (capital fund) 

Construction period Operation period No. Item 

1 2 1 2 3 4 5 6 7 8 9 10 11 12 13 

1 Cash inflow 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 1.1 Selling income 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 2 Cash outflow 2.1 Self capital 2.2 Principal payback 5226.8 6100.1 9222.1 9317.7 9422.2 9536.3 9660.9 9797.1 9945.8 10108.2 10214.9 6542.6 6542.6 6542.6 6542.6 2.3 Loan interest 4897.7 5099.2 0.0 2.4 Operation cost 0.0 0.0 1779.4 1943.6 2123.1 2319.1 2533.3 2767.2 3022.7 3301.8 3535.9 0.0 0.0 0.0 0.0 2.5 

Sale income tax and

surtax 329.1 1000.9 1343.6 1241.1 1129.1 1006.8 873.3 727.3 568.0 393.8 203.7 0.0 0.0 0.0 0.0 

2.6 Income tax 0.0 0.0 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 3 Net cash flow 0.0 0.0 1082.7 1082.7 1082.7 1082.7 1082.7 1082.7 1082.7 1082.7 1082.7 1082.7 1082.7 1082.7 1082.7 4 

Accumulated net

cash flow 0.0 0.0 600.2 634.0 671.0 711.3 755.4 803.6 856.1 913.6 976.4 1043.6 1043.6 1043.6 1043.6 

-5226.8 -6100.1 1465.4 1369.8 1265.4 1151.3 1026.6 890.5 741.8 579.3 472.7 4145.0 4145.0 4145.0 4145.0 

-5226.8 -11326.9 -9861.4 -8491.6 -7226.3 -6075.0 -5048.4 -4157.9 -3416.1 -2836.8 -2364.1 1780.9 5925.8 10070.8 14215.8 

FIRR 12.00%

Calculation indicators Financial net value (ic=10%)6702.69

Pt(year) 9.6 

30
Annex 1-7: Cash flow (total capital) 

Construction 

period Operation period (full capacity) 

No. Item 1 2 1 2 3 4 5 6 7 8 9 10 11 12 13 

1 Cash inflow 0.0 0.0 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 

1.1 Sale income 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 10687.6 

2 Cash outflow 16325.5 16997.3 7442.8 7374.1 7299.1 7217.2 7127.7 7029.9 6923.1 6806.5 6679.0 6542.6 6542.6 6542.6 6542.6 

2.1 Fixed asset investment 16325.5 16997.3 1343.6 1241.1 1129.1 1006.8 873.3 727.3 568.0 393.8 203.7 0.0 0.0 0.0 0.0 2.2 Flow capital 0.02.3 Sale tax 1082.7 1082.7 1082.7 1082.7 1082.7 1082.7 1082.7 1082.7 1082.7 1082.7 1082.7 1082.7 1082.7 

2.4 Operation cost 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 4416.3 

2.5 Income tax 0.0 0.0 600.2 634.0 671.0 711.3 755.4 803.6 856.1 913.6 976.4 1043.6 1043.6 1043.6 1043.6 

Net cash flow value -16325.5 -16997.3 3244.8 3313.5 3388.5 3470.4 3559.9 3657.7 3764.5 3881.1 4008.5 4145.0 4145.0 4145.0 4145.0 

Accumulated net cash flow value -16325.5 -33322.8 -30078.0 -26764.6 -23376.1 -19905.7 -16345.8 -12688.2 -8923.7 -5042.6 -1034.1 3110.9 7255.9 11400.9 15545.8 

Net cash flow value before 

taxation -16325.5 -16997.3 3845.0 3947.5 4059.4 4181.7 4315.3 4461.2 4620.6 4794.7 4984.9 5188.6 5188.6 5188.6 5188.6 

Accumulated net cash flow value before taxation -16325.5 -33322.8 -29477.9 -25530.4 -21471.0 -17289.2 -12973.9 -8512.7 -3892.1 902.6 5887.5 11076.0 16264.6 21453.1 26641.7 

Calculation indicators After taxationBefore taxation

FIRR(%) 6.75% 9.66%Financial net value(Ic=10%)(10,000RMB) 1705 8955Pt(year) 9.25 8.81

31
Annex 2-1: Investment 

Estimated value 

No. Engineering or cost Construction 

Equipment purchasing Installation Others Total 

Area of cons

(M2) 

1 Investment of fixed assets 169.20 2061.50 229.80 853.91 3314.41 1870.01.1 Cost of engineering 169.20 2061.50 229.80 2460.50 1.1.1 Production 127.00 1944.50 213.50 2285.00 1.1.1.1 Gasification 80.00 320.40 80.10 480.50 800.00 1.1.1.2 Power generation 15.00 937.35 104.15 1056.50 150.00 1.1.1.3 Gas purification 4.00 165.75 29.25 199.00 100.00 1.1.1.4 Raw material preparation 24.00 5.00 0.00 29.00 400.00 1.1.1.5 Crushing and briquette machines 466.00 466.00 1.1.1.6 

Power transforming andtransmission 4.00 50.00 0.00 54.00 50.00 

1.1.2 Civil engineering 15.20 53.00 16.30 84.50 1.1.2.1 Water supply and discharging 3.20 41.00 11.10 55.30 1.1.2.1.1 Water discharging network in plant 1.20 5.00 2.50 8.70 1.1.2.1.2 Waste water disposal system 2.00 28.00 7.00 37.00 50.00 1.1.2.1.3 

Water for fire-fighting and safety

system 8.00 1.60 9.60 

1.1.2.2 Power line and lighting in plant 8.00 3.20 11.20 1.1.2.3 General plan 12.00 12.00 1.1.2.3.1 Wall and gate 2.00 2.00 1.1.2.3.2 Road inside plant 10.00 10.00 1.1.2.4 Power use system in plant 4.00 2.00 6.00 1.1.3 Service engineering 27.00 64.00 0.00 91.00 1.1.3.1 Office 18.00 18.00 300.00 1.1.3.2 Engineering outside plant 9.00 9.00 1.1.3.2.1 Road outside plant 2.00 2.00 

32
1.1.3.2.2 Pipeline 2.00 2.00 

1.1.3.2.3 Vegetation 5.00 5.00 1.1.3.3 Office equipment 10.00 10.00 1.1.3.4 Purchasing cost of tool and furniture 14.00 14.00 1.1.2.5 Cost of spare parts 40.00 40.00 1.2 Others 479.24 479.24 1.2.1 Cost of production preparation 40.00 40.00 1.2.2 Cost of engineering design 123.03 123.03 1.2.3 Cost of earliest stage works 20.00 20.00 1.2.5 Cost of land 60.00 60.00 1.2.6 Cost of construction management 24.61 24.61 1.2.7 Cost of construction monitoring 24.61 24.61 1.2.8 Cost of research & experiment 187.00 187.00 1.3 Cost of preparation 374.68 374.68 1.3.1 Cost of basic preparation 235.18 235.18 1.3.2 Prepared cost for price raise 139.50 139.50 2 

Regulating tax of investment for

fixed assets 0.00 

Total 169.20 2061.50 229.80 853.91 3314.41 

33
34

Annex 2-2:Operation coat and income 

No. Items Unit Annual use Unit price Sum 

1 Input 1068.08

1.1 Cost of maintenance 20.99 

1.2 Salary 74.40 

1.2.1 Managing staffs 104Yuan/person.yr. 4 2.4 9.60 

1.2.2 Leader of group 104Yuan/person.yr. 16 1.8 28.80 

1.2.4 Operation workers 104Yuan/person.yr. 30 1.2 36.00 

1.2.3 Auxiliary workers 104Yuan/person.yr. 40 0.96 38.40 

1.3 Fuel & power 972.69 

1.3.1 Electricity 104kwh 104 0.73 75.92 

1.3.2 Water fee Yuan/t 8760 1.2 1.05 

1.3.3 Pollution discharging fee Yuan/t 8760 0.6 0.53 

1.3.4 Cost of engine oil Yuan/Kg 43200 9 38.88 

1.3.5 Cost of raw material Yuan/t 28543.7 300 856.31 

1.4 Cost of depreciation 209.91 

2 Output 1724.49

2.1 Power sales Yuan/kWh 2288.0 0.727 1663.38

2.2 Tar oil Yuan/t 611.1 1000 61.11 

3 Tax 120.16 

3.1Value-added tax 109.24

3.2City construction tax(7%) 7.65

3.3Education surcharge(3%) 3.28

3.3 Education surcharge 3% 2.82 

4 Income tax 30% 143.37 
Annex2-3: Total cost 

Operation period No. Items 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 

1 Fuel & power 972.7 972.7 972.7 972.7 972.7 972.7 972.7 972.7 972.7 972.7 972.7 972.7 972.7 972.7 972.7 92 

Salary & welfare 74.4 74.4 74.4 74.4 74.4 74.4 74.4 74.4 74.4 74.4 74.4 74.4 74.4 74.4 74.4 

3 

Expenditure of maintenance 21.0 21.0 21.0 21.0 21.0 21.0 21.0 21.0 21.0 21.0 21.0 21.0 21.0 21.0 21.0 

4 Others 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 5 Depreciation 209.9 209.9 209.9 209.9 209.9 209.9 209.9 209.9 209.9 209.9 209.9 209.9 209.9 209.9 209.9 6 Allocation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 7 Financial cost 136.4 124.8 112.1 98.2 83.0 66.3 48.0 27.9 5.9 0.0 0.0 0.0 0.0 0.0 0.0 7.1 

Interest of long-term loan 136.4 124.8 112.1 98.2 83.0 66.3 48.0 27.9 5.9 0.0 0.0 0.0 0.0 0.0 0.0 

8 

Expenditure of total cost 1414.4 1402.8 1390.1 1376.2 1361.0 1344.3 1326.0 1305.9 1283.9 1278.0 1278.0 1278.0 1278.0 1278.0 1278.0 1

# Fixed cost 305.3 305.3 305.3 305.3 305.3 305.3 305.3 305.3 305.3 305.3 305.3 305.3 305.3 305.3 305.3 

 Variable cost 1109.1 1097.5 1084.8 1070.9 1055.7 1039.0 1020.7 1000.6 978.6 972.7 972.7 972.7 972.7 972.7 972.7 

9 

Cost of management 1068.1 1068.1 1068.1 1068.1 1068.1 1068.1 1068.1 1068.1 1068.1 1068.1 1068.1 1068.1 1068.1 1068.1 1068.1 1

Note:Cost of total cost=(1+2+...+8);Variable cost=(1+2+7);Cost of management =(8-5-6-7)

35
Annex 2-4:Cash Flow (Total capital) 

YearConstruction Production reaching design capacity 

No. Items 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 

1 Cash inflow 0 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 17

1.1 Income 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 17

2 Cash outflow 3383 1387 1380 1371 1362 1352 1340 1328 1315 1322 1302 1296 1296 1296 1296 1296 12

2.1 Fixed asset 33832.3 VAT and addtion 120 120 120 120 120 120 120 120 120 120 120 120 120 120 120 1

Interest 136 125 112 98 83 66 48 28 28 6

2.4 Running cost 1068 1068 1068 1068 1068 1068 1068 1068 1068 1068 1068 1068 1068 1068 1068 102.5 Income tax 63 67 71 75 80 86 92 98 106 108 108 108 108 108 108 1

3 Net cash flow -3383 337 345 353 363 373 384 396 410 403 423 429 429 429 429 429 44 

Accumulated net cash flow -3383 -3045 -2700 -2347 -1984 -1611 -1227 -831 -421 -18 404 833 1261 1690 2118 2547 29

Net cash flow before income tax -3383 400 411 424 438 453 470 488 508 508 530 536 536 536 536 536 5Accumulated net cash flow before income tax -3383 -2983 -2571 -2147 -1709 -1256 -786 -298 211 719 1249 1785 2322 2858 3394 3930 44Index After income tax Before income tIRR 7.59% 10.85% NPV Ic=6% (104 Yuan) 3.58 Million Yuan 11.66 Million YPayback period (year) 9.04 years 7.59 years 

36
Annex2-5: Cash Flow (Capital Fund) 

Construction Operation period No. Iitems 

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 

1 Cash inflow 0 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1.1 Income 0 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 1724 2 Cash outflow 1083 1588 1600 1612 1626 1641 1658 1676 1697 1704 1405 1296 1296 1296 1296 1296 2.1 Self-owned capital 10152.2 Repayment of capital 0 201 220 241 264 290 318 348 382 382 103 0 0 0002.3 Payment of loan interest 6 2 8 3 6 8 8 6 0 0 0 0 0 

68 13 125 11 9 8 6 4 2 28

2.4 Running cost 0 1068 1068 1068 1068 1068 1068 1068 1068 1068 1068 1068 1068 1068 1068 1068 2.5 VAT and addtion 0 120 120 120 120 120 120 120 120 120 120 120 120 120 120 120 2.6 Income tax 0 63 67 71 75 80 86 92 98 106 108 108 108 108 108 108 3 Net cash flow:1-2 -1083 136 125 112 98 83 66 48 28 21 320 429 429 429 429 429 4 Accumulated net cash flow:1-2 -1083 -947 -822 -710 -611 -528 -462 -414 -386 -365 -46 383 811 1240 1668 2097 

IRR(

%) 12.02 

NPV (ic=10%,104 Yuan) 646.9 Investment payback period (yr.) 10.11 

37
Annex3-1: Total cost 

Construction 

period Production period of reaching the designed capacity No Item 

1 1 2 3 4 5 6 7 8 9 10 11 

1 Fuel & power 801.8 801.8 801.8 801.8 801.8 801.8 801.8 801.8 801.8 801.8 801.8 2 Salary & welfare 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 4 Reparation cost 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 5 Depreciation cost 232.8 232.8 232.8 232.8 232.8 232.8 232.8 232.8 232.8 232.8 232.8 6 Amortizing cost 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 7 Fiscal cost 75.6 151.2 141.1 130.1 118.1 104.9 90.5 74.8 57.7 38.9 18.4 0.0 7.1 

Long-term interest rate of loan 75.6 151.2 141.1 130.1 118.1 104.9 90.5 74.8 57.7 38.9 18.4 0.0 

7.2 

Interest of loan of flow finance 

8 Total cost (1+2+...+8) 75.6 1355.9 1345.8 1334.7 1322.7 1309.5 1295.1 1279.4 1262.3 1243.5 1223.0 1204.6 

Fixed cost 0.0 402.8 402.8 402.8 402.8 402.8 402.8 402.8 402.8 402.8 402.8 402.8 

 Variable cost (1+2+7) 75.6 953.1 943.0 931.9 919.9 906.7 892.3 876.6 859.5 840.7 820.3 801.8 

9 Operation cost(8-5-6-7) 0.0 971.8 971.8 971.8 971.8 971.8 971.8 971.8 971.8 971.8 971.8 971.8 

38
Annex 3-2: Repay capital with interest of loan 

Construction period Operating period 

No Item 1 1 2 3 4 5 6 7 8 9 10 11 

1 Repaying loan and interest 1.1 Accumulative loan and interest in beginning year 0.0 2625.92450.52258.92049.71821.1 1571.51298.81000.9675.5 320.0 0.0 1.1.1Loan 0.0 2625.92450.52258.92049.71821.11571.51298.81000.9675.5 320.0 0.0 1.1.2Interest of construction period 75.6 1.2 Annual loan 2625.9 1.3 Interest 75.6 151.2 141.1 130.1 118.1 104.9 90.5 74.8 57.7 38.9 18.4 0.0 1.4 Return loan 0.0 175.4 191.6 209.2 228.6 249.7 272.7 297.9 325.4 355.4 320.0 0.0 1.5 Return interest 75.6 151.2 141.1 130.1 118.1 104.9 90.5 74.8 57.7 38.9 18.4 0.0 2 Capital source for repay loan 326.6 332.7 339.4 346.6 354.6 363.2 372.7 383.1 394.4 406.7 417.2.1 Profit 93.8 99.9 106.6 113.8 121.8 130.4 139.9 150.3 161.6 173.9 185.2.2 Depreciation 232.8 232.8 232.8 232.8 232.8 232.8 232.8 232.8 232.8 232.8 232.

39
Annex3- 3: Profit and loss statement U

Construction 

period Operation period 

No Item 1 1 2 3 4 5 6 7 8 9 10 11 

1 Product turnover 1646.5 1646.5 1646.5 1646.5 1646.5 1646.5 1646.5 1646.5 1646.5 1646.5 1646.2 

Turnover tax and add-ons 135.0 135.0 135.0 135.0 135.0 135.0 135.0 135.0 135.0 135.0 135.0 

3 Total cost 75.62 1355.9 1345.8 1334.7 1322.7 1309.5 1295.1 1279.4 1262.3 1243.5 1223.0 1204.6 4 Total profit: 1-2-3 155.6 165.7 176.7 188.8 201.9 216.3 232.0 249.2 267.9 288.4 306.8 5 Income tax(33%) 51.3 54.7 58.3 62.3 66.6 71.4 76.6 82.2 88.4 95.2 101.3 6 Profit after tax: 4-5 104.2 111.0 118.4 126.5 135.3 144.9 155.5 167.0 179.5 193.2 205.6 8 

Profit can be allocated: 6-7 104.2 111.0 118.4 126.5 135.3 144.9 155.5 167.0 179.5 193.2 205.6 

9 

Surplus accumulating fund (10%) 10.4 11.1 11.8 12.6 13.5 14.5 15.5 16.7 18.0 19.3 20.6 

10 Profit to be p aid

11 

Profit not being distributed 93.8 99.9 106.6 113.8 121.8 130.4 139.9 150.3 161.6 173.9 185.0 Accumulated profit not

being distributed 93.8 193.7 300.3 414.1 535.9 666.4 806.3 956.5 1118.1 1292.0 1477.

40
Annex 3-4: Cash flow(total capital) 

Constructio

n period Operation period 

No Item 1 1 2 3 4 5 6 7 8 9 10 

1 Cash flow-in 0 1646 1646 1646 1646 1646 1646 1646 1646 1646 1646 1.1 Product turnover 1646 1646 1646 1646 1646 1646 1646 1646 1646 1646 2 Cash flow -out 3751 1309 1303 1295 1287 1278 1269 1258 1247 1234 1220 2.1 Fixed assets investment 3751 151 141 130 118 105 91 75 58 39 18 2.2 Flow finance 0 2.3 Turnover tax 135 135 135 135 135 135 135 135 135 135 2.4 Operational cost 972 972 972 972 972 972 972 972 972 972 2.5 Income tax 0 51 55 58 62 67 71 77 82 88 95 3 Net cash flow -3751 337 344 351 359 368 378 388 400 412 426 4 Accumulated net cash flow -3751 -3414 -3070 -2719 -2360 -1992 -1614 -1226 -826 -414 12 

Net cash flow before tax -3751 388 398 410 422 435 449 465 482 501 521 

Accumulated net cash flow before tax -3751 -3363 -2964 -2555 -2133 -1699 -1249 -785 -303 198 719 Iindex After tax 

FIRR 6.06% 

FNPV Ic=10%( Unit: 104 

yuan) 15 

Investment return period (year) 11.00 

41
Annex 3-5: Cash flow (capital fund) 

Construction 

period Operation period 

No Item 1 1 2 3 4 5 6 7 8 9 10 11 

1 Cash flow-in 1646.5 1646.5 1646.5 1646.5 1646.5 1646.5 1646.5 1646.5 1646.5 1646.5 1646.5 161.1 Turnover 1646.5 1646.5 1646.5 1646.5 1646.5 1646.5 1646.5 1646.5 1646.5 1646.5 1646.5 161.2

Remain value of fixed assets callback 

1.3 Flow finance callback 2 Cash flow-out 1201.0 1484.8 1494.2 1504.5 1515.7 1528.0 1541.4 1556.1 1572.1 1589.6 1540.5 1208.1 122.1Self-raising finance 112 5.4 .0 0 2.2 Payback loan principal & interest 0.0 175.4 191.6 209.2 228.6 249.7 272.7 297.9 325.4 355.4 320.0 0.0 2.3 Pay interest of loan 75.6 151.2 141.1 130.1 118.1 104.9 90.5 74.8 57.7 38.9 18.4 0.0 2.4 Operational cost 0.0 971.8 971.8 971.8 971.8 971.8 971.8 971.8 971.8 971.8 971.8 971.8 92.5 Vendition tax & add-ons 0.0 135.0 135.0 135.0 135.0 135.0 135.0 135.0 135.0 135.0 135.0 135.0 12.6 Income tax 0.0 51.3 54.7 58.3 62.3 66.6 71.4 76.6 82.2 88.4 95.2 101.3 13 Net cash flow: 1-2 -1201.0 161.7 152.3 142.0 130.7 118.4 105.0 90.4 74.3 56.9 106.0 438.4 44 Accumulated net cash flow -1201.0 -1039.3 -887.1 -745.1 -614.4 -496.0 -391.0 -300.6 -226.3 -169.4 -63.4 375.0 8

Iindex FIRR 12.04%FNPV Ic=10%( Unit: 104 yuan) 170.24 Investment return period (year) 11.14

42
REPORT DOCUMENTATION PAGE Form Approved 

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October 2006 

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Subcontract Report 

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5a. CONTRACT NUMBER

DE-AC36-99-GO10337 

5b. GRANT NUMBER

4. TITLE AND SUBTITLE

Biomass Support for the China Renewable Energy Law: 

Feasibility Report – Agricultural and Forestry Solid Wastes Power 

Generation Demonstration, December 2005 

5c. PROGRAM ELEMENT NUMBER

5d. PROJECT NUMBER

NREL/SR-710-40627 

5e. TASK NUMBER

IGIN.6031 

6. AUTHOR(S)

Center of Renewable Energy Development, Beijing, China; Energy 

Research Institute, Beijing, China; National Development and 

Reform Commission, Beijing, China 

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Center of Renewable Energy Development, Beijing, China; Energy 

Research Institute, Beijing, China; National Development and Reform 

Commission, Beijing, China 

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14. ABSTRACT (Maximum 200 Words)

Subcontractor report on feasibility of using agricultural and forestry wastes for power generation in China. 

15. SUBJECT TERMS

International Programs; China; Biomass; agricultural waste; forestry waste; China Renewable Energy Law; biomass 

development in China 

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