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October 1, 2013

Bunge's Sugar Mill Produces more Electricity Than it Consumes

The advantage of making ethanol from sugarcane in Brazil is that the sugar/ethanol mills can produce more energy than they consume. That was demonstrated again when Bunge announced that its new sugar/ethanol mill in Pedro Alfonso in the state of Tocantins would start selling its excess electricity back into the electrical grid.

The process of cogeneration burns the sugarcane residue to produce electricity to run the mill and the excess is sold into the local electrical grid. The Pedro Alfonso mill has the initial capacity to generate 80 megawatts of electricity of which 45 megawatts could be put back into the electrical grid. When the plant is in full operation, the capacity is expected to increase to 163 megawatts per year.

The Pedro Alfonso sugar/ethanol mill has the capacity to process 2.5 million tons of sugarcane per year with the most up to date technologies including totally mechanized planting and harvesting while still generating 1,300 jobs in the region. The original plant cost R$ 600 million to construct and an additional R$ 70 was invested in the cogeneration unit. Bunge is also investing in worker training by funding the Bunge Foundation which in cooperation with the local Secretary of Education and the Technical College, helps to train local youths in sugar and ethanol production.

In addition to making ethanol from sugarcane, local and state governments in Mato Grosso are also exploring the possibility of producing ethanol from the excess corn production in the state of Mato Grosso. The state produced in excess of 20 million tons of corn in 2013, but the domestic consumption in the state is only about 3 million tons. The remainder of the corn must be shipped out of the state to livestock producers in southern Brazil or exported out of ports in southern Brazil. The cost of moving the corn is actually more expensive than the current purchase price of the corn, so the thought is to convert the corn into ethanol and then ship out the fuel.

There are no commercial stand-along ethanol plants in Mato Grosso that use only corn as the raw material, but there are mills that use corn and/or sorghum to make ethanol during the three or four months when sugarcane is not available (December to March). Without government assistance, a stand-alone ethanol mill that uses only corn would not be economically viable in Mato Grosso, but local authorities are hoping to convince the Minister of Agriculture that subsidies for a mill using corn would probably be cheaper than subsidizing the transport of corn out of the state, which is what the federal government has been doing for the last several months.