consultant to conduct FEASIBILITY STUDY OF BIOMASS CO-GENERATION AT PT PERKEBUNAN NUSANTARA II SUGAR FACTORY.

As part of Low Carbon Strategy Project, the UK Climate Change Unit, a joint unit of UK Foreign Commonwealth Office (FCO) and Department for International Development (DFID) is seeking for consultant to conduct FEASIBILITY STUDY OF BIOMASS CO-GENERATION AT PT PERKEBUNAN NUSANTARA II SUGAR FACTORY.

Detailed information can be found in Term of Reference below.

To obtain full Invitation to Tender documents, Expression of Interest should be sent to dfidjktconsultancy@dfid.gov.uk by Friday, 30 September 2011 at 13.00 pm.

Contract will be issued by the Department for International Development (DFID)


Procurement Officer
UK Climate Change Unit


FEASIBILITY STUDY OF BIOMASS CO-GENERATION AT PT PERKEBUNAN NUSANTARA II SUGAR FACTORY

Objective
1. The purpose of this consultancy is to support Indonesia Investment Agency (IIA), Ministry of Finance, in the assessment of a proposal for biomass-cogeneration at PT Perkebunan Nusantara II (PTPN II) Sugar Factory in Medan, North Sumatera Province.
Background
2. This consultancy will be supported by the Low-Carbon Strategy (LCS) Project - a collaboration between the Ministry of Finance (MoF) and the UK Department for International Development (DfID). The LCS Project aims to support MoF in the development of an integrated low-carbon growth strategy. The Ministerial Assistance Team on Climate Change (MAT-CC) and the Indonesia Investment Agency (PIP) are implementing the project on MoF’s behalf.
Rationale
3. The delivery of a pipeline of bankable projects in the renewable energy sector is a key result area of the LCS project. It addresses the demand side of low-carbon development, thereby supplementing project efforts addressing the supply side, such as the development of enabling low-carbon policies, supporting fiscal and financing instruments and implementation mechanisms.
4. The results of the investment mapping exercise, commissioned by PIP in 2009, flagged biomass-based cogeneration in the sugar sector as a cost-effective long-term investment area for clean power generation and GHG emission reductions. Co-generation projects in sugar factories have proven to be cost-effective, efficient, and reliable around the world.
5. An assessment of the Indonesian sugar sector conducted by the low-carbon investment mapping study (2009) suggests a potential capacity in excess of 396 MW and a mitigation potential in excess of 376 million tCO2e per annum. Recently issued government policies target an expansion of the sugar sector from the current annual production of 2.2 million tonnes to 5.7 million tonnes of white sugar by 2014. This expansion would more than double the sector’s potential for power generation and GHG mitigation.
6. Previous scoping and pre-feasibility studies jointly commissioned by MoF and the LCS project included 8 sugar factories located in East Java and Sumatera. A joint fact-finding mission conducted by MoF and the project in May 2011 flagged the PT PN II Sugar Factory in Medan as a potential candidates for a more detailed feasibility study.    
Scope
7. The assignment outlined in these ToR comprises two stages: (i) a brief pre-feasibility study to confirm the viability of the project, followed by (ii) a full-scale investment-grade feasibility study, provided the results of the pre-feasibility study provide sufficient justification for a detailed feasibility study.
8. The pre-feasibility study would clarify project goals and potential barriers, and include an energy and efficiency audit of the sugar plant and a brief economic analysis to validate the basic parameters for project viability. Results should be accurate enough to support a decision about taking the project forward
9. During the 2nd stage, all relevant technical and non-technical information needs to be collected and analysed in-depth. The feasibility study should be of the highest possible quality to permit a full technical design of the project in ways that maximize the energy, economic, social and climate benefits, meet specific site operational needs, and allow a seamless integration into existing mechanical and electrical systems. In addition, the study should determine final system pricing and return on investment, and provide recommendations on project execution.
Deliverables and Specifications
10.  The main deliverables are a set of reports covering the results of the pre-feasibility study and, if commissioned, the feasibility study
11.  The report on the pre-feasibility study should include:
·        An investigation of all potential regulatory or external barriers that would prevent this project from going forward. Obstacles could include existing power purchase agreements that prevent the installation of onsite power generation capacity, or local utility and regulatory policies that prevent or hamper distributed generation. If any barriers identified are non-prohibitive but only hamper implementation, coasted action for overcoming them should be included in the report.
·        An analysis, clarification and alignment of all goals of potential investors and the company including energy savings, power generation, GHG reductions and other potential environmental and socio-economic objectives. These goals should reflect control, monitoring, and maintenance needs, as well as the need for off-grid capabilities (if the system will be designed to run in the event of a utility outage).
·        An energy and efficiency audit of the sugar plant to identify a preliminary system size, based on estimated loads and schedules for thermal and electrical demand at the site. [1] Load profiles and power-to-heat ratios ascertained during this study should be used to investigate the applicability of various types of technologies for the site. To the extent possible, hard data shall be used to develop these profiles, pulled from electric utility interval data, existing controls systems, and the installation of measurement equipment at the site. Pending load growth due to planned site expansion or new construction will also need to be considered.
·        A tentative estimate of costs and an economic analysis to support a decision whether to take the project forward and commission a full-scale feasibility study.
12.  The report on the feasibility study should detail the information gathered during the pre-feasibility stage and provide an in-depth analysis, including:
·        Conceptual engineering work, including reviews of existing electrical, mechanical, and structural drawings, will be required to complete the study. The Consultant should work closely with factory management to ensure that to determine a feasible design and accurate system pricing. This might include decisions regarding system specifics (e.g., size and location, prime mover type, heat applications), along with design drawings that include flow diagrams, equipment specifications, monitoring and control specification, piping and wiring, and tie-in to existing building systems.
·        Conceptual engineering work should consider, among other factors, the following points:
o       Site load profiles
o       System operational schedule (including projected down-time)
o       Capital, operational and maintenance costs
o       Heat recovery
o       Mechanical system components
o       System efficiency
o       Emissions
o       Permits
o       Utility interconnection
o       System performance during utility outage
·        A detailed estimate of costs and an economic analysis of costs and benefits, including an analysis of capital, construction, operation, and maintenance costs, final project economics, a simple payback schedule, a life-cycle cost analysis of the total investment and other relevant analysis.
·        An environmental impact assessment.
·        Recommendations on project execution, including a draft plan for project execution, preliminary project schedules and financing options.
13.  It should be possible to model revenue and costs across several different scenarios. Energy prices and potential subsidies, if any, should also be part of the analysis.
Activities
14.  Activities to be undertaken by the Consultant include, but are not limited to:

a)     Preparation:
·        conducting an inception workshop to agree the approach to services, milestones and timelines;
·        submitting a brief work plan and delivery schedule to IIA and LCS project staff;
b) Pre-feasibility study:
·        conducting desk studies, including a review of relevant laws, regulations and relevant contextual factors;
·        liaising with key stakeholders from the private, public and civil sector, including local government and the Department for Renewable Energy in the Ministry of Energy and Mineral Resources;
·        liaising closely with factory management and conducting fact finding missions, investigations, surveys and consultations with key stakeholders;
·        compiling and analysing all data gathered during this stage to draft a pre-feasibility report;
·        submitting the pre-feasibility and presenting findings, emerging options and recommendations to selected stakeholders so as to facilitate a decision on whether to go ahead with the full-scale feasibility study;
·        only if required, conducting a site visit with IIA staff, project staff and selected stakeholders;
b) Feasibility study:
·        liaising closely with factory management and conducting in-depth investigations, surveys and consultations with key stakeholders;
·        compiling and analysing all data gathered to draft a feasibility report including potential engineering design options and an in-depth assessment of their economic, financial, social and environmental feasibility and risks involved;
·        presenting the final findings and recommendations to key stakeholders.
Management arrangements
15. The Consultant will report to IIA’s and DFID’s designated project managers, who will jointly review outputs and progress versus milestones of the Consultant. If the progress and/or outputs are deemed unsatisfactory, IIA’s and DFID’s project managers will discuss ways to improve progress and/or outputs within an agreed time frame with the Consultant.
16.  The Consultant shall liaise closely with designated IIA staff and the management and designated staff of the PTPN II Sugar Factory.
17. Payments to the Consultant will be made in arrears based on an agreed schedule against the satisfactory delivery of outputs and/or the meeting of workflow milestones, as indicated in the above chapter. Reimbursable expenses, as agreed in the contract, will be paid upon the submission of an invoice and supporting documents (eg, receipts.)
Timing
17. The consultancy will commence in October 2011 and end latest by December 2011.
Qualifications
18.  The Consultant’s qualifications should include:

at least 5 years of related work experience in the energy sector and a proven track record on the development of biomass-based co-generation projects, and other activities related to those outlined in these ToR;
specific knowledge of Indonesia’s sugar sector will be considered an advantage;
experience and track record of working in Indonesia’s renewable energy sector;
experience and track record of working with relevant Indonesian institutions;
experience and track record of performing consultancy for international organisations;
knowledge of relevant Indonesian policies, legislation, regulations and institutions;
a team of experts that can demonstrate the level of expertise required to conduct the activities and deliver the outputs outlined in these ToR in accordance to internationally accepted standards; and
evidence of any licenses required to perform the outlined tasks.





[1] Ideally, other types of energy conservation measures will have been considered or implemented prior to consideration of onsite generation.