Periodic Reporting for period 1 - RENEGAS (RENewable AdvancEd GAsification FeedstockS)
Reporting period: 2015-08-01 to 2015-12-31
Refgas Ltd has developed a high quality advanced downdraft gasification system that uses bio waste in the form of low grade waste wood or waste such as SRF or RDF to produce clean and high quality synthetic gas (syngas) that can generate heat and electricity (CHP). During the SME-instrument Phase 1 project RENEGAS it was confirmed that there is a market demand for this technology. For the use of bio-waste the economic feasibility is depending on public support for bio-energy, while for waste as feedstock there is a clear business case without public support. Therefore, Refgas will continue the commercialisation of the advanced gasification focussing on waste as feedstock. The main added values that were confirmed to be relevant for ender users contain: 1) reliable energy and heat generation 24/7, 2) ability to use a wide variety of types and quality of feedstock, 3) small footprint enabling to place it in relative small plots of land and relocating it 4) modular building of the system, giving flexibility to increase the size of the system in 1MWe increments to be able generate the specific amount of heat/electricity that is requires to cope with growth in energy demand or available funding for projects. 5) possibility of ‘end-of-waste’ energy solution using waste as feedstock. An in-depth competition analysis revealed that no company has been able to meet the ‘end-of-waste’ requirements for waste gasification systems available on the market on this scale
During Phase 1 RENEGAS project, a business model for the successful commercialisation was developed. Refgas will partner with existing and other financial intermediaries for building waste gasification systems and agree long-term energy supply contracts with industrial parks or manufacturing companies producing waste. This will make it possible for companies to benefit from the gasification system without the need to make large investments to buy the system. In order to scale the technology outside UK, Refgas will licence out the technology for investors, such as waste management companies. The licencing business model will involve for Refgas lower market entry costs, lower opportunity costs and lower financial risk, while at the same time enabling faster scaling of the technology outside UK. The next steps for commercialisation are the building of a demonstration unit for demonstrating to the market the reliability of the gasification system on alternative waste fuels such as SRF. The Refgas demonstration facility has already achieved over 2000 hours of operation on low grade waste wood, whilst achieving end of waste status using this fuel, this process would like to be replicated on other fuels that command a gate fee. The gasification system will support the trend for distributed energy production and will simultaneously contribute to reduce the growing waste problem, by converting it to clean energy.
During Phase 1 RENEGAS project, a business model for the successful commercialisation was developed. Refgas will partner with existing and other financial intermediaries for building waste gasification systems and agree long-term energy supply contracts with industrial parks or manufacturing companies producing waste. This will make it possible for companies to benefit from the gasification system without the need to make large investments to buy the system. In order to scale the technology outside UK, Refgas will licence out the technology for investors, such as waste management companies. The licencing business model will involve for Refgas lower market entry costs, lower opportunity costs and lower financial risk, while at the same time enabling faster scaling of the technology outside UK. The next steps for commercialisation are the building of a demonstration unit for demonstrating to the market the reliability of the gasification system on alternative waste fuels such as SRF. The Refgas demonstration facility has already achieved over 2000 hours of operation on low grade waste wood, whilst achieving end of waste status using this fuel, this process would like to be replicated on other fuels that command a gate fee. The gasification system will support the trend for distributed energy production and will simultaneously contribute to reduce the growing waste problem, by converting it to clean energy.
Refgas Ltd has conducted a group of activities during SME-instrument phase 1 project RENEGAS in order to assess the feasibility of the commercialisation of the gasification system and to develop a commercial business plan. The following activities were conducted:
1. Analysis of the identified markets. A market analysis of Europe, Canada, Australia and United Kindgom has been conducted in order to assess which markets are most suitable for launching the gasification system. The Main findings were:
- For Europe, most attractive markets are: Italy, Croatia, Germany and Finland, considering their feed-in tariffs, current size of the bio-energy market and availability of feedstock.
- In the Canadian market, Refgas could target certain locations which are off the national grid and do not have access to cheap electricity, such as remote off-grid communities and extraction / mining sites.
- The opportunities of the Australian market are limited; due to climate conditions it is hard to utilise heat energy, making electricity produced by the plant more expensive. Also, the feedstock availability in large areas of the country is relatively small.( Note, hot water from the CHP system can be used to produce cooling for air conditioning via an absorption chiller)
- For UK market, the biomass gasification opportunities are highly reliant on the RES (Note ROCs and in future CFDs in the UK) support scheme. To hedge this risk it is recommended to create a new stream of revenue: waste gasification (waste gasification modules will not rely on support and will be profitable even without it). The best waste gasification business opportunities in UK are to target operators of industrial zones and (or) companies in industrial zones who would use waste as feedstock and to target renewable energy developers.
2. Analysis of target groups’ needs, requirements and expectations related to the product
Three broad groups of potential customers were formed according to the projects Refgas is currently developing, enquiries from potential customers and results of identified markets analysis:
- Industry
- Remote communities and companies at remote locations
- Renewable energy developers
The main findings are that for each target group, Refgas was able to identify specific targeted value propositions aligned to the specific needs and requirements of each target group. The needs and requirements were categorised into the functional requirements for the system and the specific needs and demands regarding the process of decision making and the economic and financial needs.
3. Elaboration of the Business Plan. Based on the results from the other activities, a tailored business model was elaborated and a business plan for commercialisation was developed.
The main finding were:
The value proposition of Refgas is the offer of small, easily scalable combined heat and power generation solution which can use low quality feedstocks and meets end-of-waste requirements. It is based on 5 selling points which all together provide the uniqueness of Refgas solution:
- Small footprint
- Scalability
- Combined production of heat and
- Ability to use low quality feedstock
- Meeting “end of waste” requirements.
Two different business lines will be applied when dealing with home market (UK) and export markets (Canada, Australia and rest of EU):
1. Current model for UK market – Refgas plans to expand in the UK using the current business model. The model consists of Refgas dividing operations between in-house and outsourced tasks.
2. Licensing for overseas – for other markets. Refgas plans to expand to other countries by selling country-exclusive licensed production deals.
1. Analysis of the identified markets. A market analysis of Europe, Canada, Australia and United Kindgom has been conducted in order to assess which markets are most suitable for launching the gasification system. The Main findings were:
- For Europe, most attractive markets are: Italy, Croatia, Germany and Finland, considering their feed-in tariffs, current size of the bio-energy market and availability of feedstock.
- In the Canadian market, Refgas could target certain locations which are off the national grid and do not have access to cheap electricity, such as remote off-grid communities and extraction / mining sites.
- The opportunities of the Australian market are limited; due to climate conditions it is hard to utilise heat energy, making electricity produced by the plant more expensive. Also, the feedstock availability in large areas of the country is relatively small.( Note, hot water from the CHP system can be used to produce cooling for air conditioning via an absorption chiller)
- For UK market, the biomass gasification opportunities are highly reliant on the RES (Note ROCs and in future CFDs in the UK) support scheme. To hedge this risk it is recommended to create a new stream of revenue: waste gasification (waste gasification modules will not rely on support and will be profitable even without it). The best waste gasification business opportunities in UK are to target operators of industrial zones and (or) companies in industrial zones who would use waste as feedstock and to target renewable energy developers.
2. Analysis of target groups’ needs, requirements and expectations related to the product
Three broad groups of potential customers were formed according to the projects Refgas is currently developing, enquiries from potential customers and results of identified markets analysis:
- Industry
- Remote communities and companies at remote locations
- Renewable energy developers
The main findings are that for each target group, Refgas was able to identify specific targeted value propositions aligned to the specific needs and requirements of each target group. The needs and requirements were categorised into the functional requirements for the system and the specific needs and demands regarding the process of decision making and the economic and financial needs.
3. Elaboration of the Business Plan. Based on the results from the other activities, a tailored business model was elaborated and a business plan for commercialisation was developed.
The main finding were:
The value proposition of Refgas is the offer of small, easily scalable combined heat and power generation solution which can use low quality feedstocks and meets end-of-waste requirements. It is based on 5 selling points which all together provide the uniqueness of Refgas solution:
- Small footprint
- Scalability
- Combined production of heat and
- Ability to use low quality feedstock
- Meeting “end of waste” requirements.
Two different business lines will be applied when dealing with home market (UK) and export markets (Canada, Australia and rest of EU):
1. Current model for UK market – Refgas plans to expand in the UK using the current business model. The model consists of Refgas dividing operations between in-house and outsourced tasks.
2. Licensing for overseas – for other markets. Refgas plans to expand to other countries by selling country-exclusive licensed production deals.
The company’s overall objective is to solve two societal challenges: firstly to reduce the reliance on fossil fuel by enabling and contribute to fighting climate change by creating a consistent 24/7 renewable energy supply and secondly to reduce the amount of waste by creating an ‘end-of-waste’ gasification system that will use waste for the production and electricity and heat . It is important to note that the ethos of Refgas is to be a renewable energy producer not a waste destroyer, if waste can be used as a fuel then that is a bonus.
The gasification system developed by Refgas is uniquely positions to generate reliable 24/7 energy for industrial clients at a competitive price, creating therefore a very compelling offer for manufacturing companies to decrease their reliance on fossil fuel.
Additionally, Refgas gasification system could bring distributed, reliable and cheaper energy to remote communities such as islands and communities not connected to a national grid. This would empower these communities to become less dependent on expensive imported fossil fuels and create the opportunity to decrease their carbon footprint while also decrease the cost of energy.
The gasification system developed by Refgas is uniquely positions to generate reliable 24/7 energy for industrial clients at a competitive price, creating therefore a very compelling offer for manufacturing companies to decrease their reliance on fossil fuel.
Additionally, Refgas gasification system could bring distributed, reliable and cheaper energy to remote communities such as islands and communities not connected to a national grid. This would empower these communities to become less dependent on expensive imported fossil fuels and create the opportunity to decrease their carbon footprint while also decrease the cost of energy.