VIASPACE Inc. announced that the comprehensive, independent feasibility study conducted by Pelican SA of the 12 MW biomass power plant and co-located 834 hectare (2,060 acre) Giant King® Grass plantation project in Nicaragua has been completed. The feasibility study addresses the technical and economic issues of both the plantation and power plant, including connection to the Nicaraguan power grid. The six month feasibility study is 147 pages long, plus major appendices.

It is now being provided on a confidential basis to bankers and potential investors in the project. Energia Reino Verde (Green Kingdom Energy in English) is the special-purpose company formed to own and operate the Nicaragua power plant and plantation. Summary and Conclusions of the Feasibility Study: the proposed integrated Energia Reino Verde 12 MW biomass power plant and co-located Giant King Grass (GKG) plantation is both feasible and bankable.

In addition to GKG, the power plant will be fueled by rice husk as a secondary fuel and rice straw as a backup fuel. The main conclusions of the feasibility study are: Giant King Grass is suitable as the fuel. Rice husk is available at the site as an additional fuel, and rice straw is available at the site and nearby areas as an auxiliary backup fuel.

The Giant King Grass plantation is very similar to a sugarcane plantation and will utilize best practices from the sugarcane industry. The Giant King Grass plantation will be located on the 4,200 hectare Miramontes plantation that is currently growing rice on 2,800 hectares. Irrigation from Lake Nicaragua is available as are plantation and power plant workers in the region.

A major advantage is that the Giant King Grass plantation and power plant will be co-located and the average distance between the GKG fields and the power plant is 3 km, which considerably simplifies logistics and minimizes need for storage. Based on the experience of the sugarcane industry, a semi-mechanized approach to cutting and loading is recommended. In most of the world, these activities are done fully manually and this is certainly feasible in Nicaragua.

The biomass power plant will be nearly identical to a bagasse co-generation power plant at a sugar mill, except that the boiler will be replaced with a boiler that can handle the proposed fuels that have specific corrosive properties related to chlorine content, and the propensity for slagging due to low melting temperature ash. The proposed boiler technology is well proven for corrosive fuel such as straws and grasses. The EPC contractor proposed by the Project developers is very experienced and has built many power plants throughout the world.

The biomass power plant is located 9 km from a grid connection point, which is a reasonable expense for the proposed size of the project. Power plant operations are planned to be contracted to an experienced company. The costs and financial projections for the ERV project have been validated.

The renewable low carbon electricity produced will be sold under a Power Purchase Agreement. The plant will produce reliable base electricity and would also be eligible for capacity contracting.