August 25, 2014

Brazilian Sugar Mills Generate Revenue by Selling Excess Electricity

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

One of the benefits of using sugarcane to produce sugar and ethanol in Brazil is that the sugarcane residue that is left over can be used to fire boilers to generate electricity used to run the facility. Not only does this make the sugar mill energy independent, many mills generate excess electricity which they can then sell back into the electrical grid for added revenue.

According to the Secretary of Energy for the state of Sao Paulo and the Bio-electricity Sector of the Union of Sugarcane Industries (Unica), 12% of the electricity generated at sugar mills in the state of Sao Paulo last year was fed back into the electrical grid and there appears to be much more that can be done in this area.

According to the director of bio-electricity at Unica, Zilmar de Souza, during the last sugarcane harvest season, on average there were 24kWh of electricity generated for each ton of sugarcane processed in Sao Paulo. Souza feels that with the right investments and modernization, that figure could increase to 100 kWh per ton of sugarcane.

There are more than 400 sugar mills in Brazil, but according to Souza, 200 of those sugar mills do not generate excess electricity during the processing of the sugarcane, but with the right investments, they could all be selling electricity back into the grid.

Observers of the sector feel that not using the residue to generate extra electricity is a missed opportunity for mill operators. The sugarcane residue is always going to be there so why not make the investments needed to increase the electrical generation. The Brazilian government is actually looking at this additional source of electricity to complement their hydroelectric capacity which has been struggling due to low water levels in the state's reservoirs.