green energy from palm-based biogas -...
TRANSCRIPT
19 – 21 November 2013
Kuala Lumpur Convention Centre
CEO
Liana Low
BELL Group of Companies
GREEN ENERGY FROM PALM-BASED BIOGAS
“BELL Group’s Experience On Biogas Capture”
At PIPOC 2007, I spoke on “Revenue Maximization and
Zero Waste In Palm Oil Mill - Current Development and
Future Direction”
In this presentation will be looking at some of the policies that
have held us back from maximizing this potential – as an
Industry and as a Nation.
Suggestions on the way forward will also be highlighted here-in.
• Malaysia is blessed to have a successful & progressive palm oil industry. Year after year, businesses and our country are benefiting tremendously from the industry’s palm products.
After all is said and done, it is the Sustainability of the palm
oil industry that is the main objective of this conference &
subsequent dialogues – the Palm Oil Industry CANNOT FAIL!
If the palm oil industry fails, Malaysia’s Economy will face
challenges and loose its competitive edge.
Now is the time for aggressive innovation within the public and
the private sectors – Total Waste Management and Biogas
Capture Technology is a step in that direction.
Oil Palm Plantation Sector is now facing chronic labor problems
caused by limits on immigrant plantation labor, which is already
a serious impact to the Industry.
• 21st CENTURY CHALLENGES FOR THE PALM OIL
INDUSTRY
• POLICIES - THE WAY FORWARD
• TECHNOLOGY - OUR APPROACH
• THE INDUSTRY’S RESPONSE
The modern palm oil mill faces many unique challenges
today compared to several years ago:
High Volumes of waste (Solid and liquid Biomass):
As the throughput of palm oil mills gets higher over the
years, the volumes of waste they churn out also increase
proportionally. These high volumes have become very
cumbersome to handle.
• 21st CENTURY CHALLENGES FOR THE PALM
OIL INDUSTRY
GHG Emmissions: The large volumes of waste
generated and decompose, they emit Green House
Gases (GHG) into the atmosphere.
ANAEROBIC POND
Methane
(CH4)
POME (Palm Oil Mill Effluent) in particular emits Biogas
containing 65% Methane which 21 times more harmful
than CO2e.
To address these challenges, the palm oil milling industry
has rapidly evolved into a one stop centre for Innovation
and Sustainability solely based on 100% private sector
initiative.
Milling activities have long since grown from just traditional
milling to more value-added downstream production.
We are now witnessing a transformation of Palm Oil Mills into
Food Processing Plants with other integrated downstream
activities on site. At the heart of all of this, is the Boiler
Station, which is a RE Power Plant that provides steam
and power to all the facilities on site
• THE INDUSTRY’S RESPONSE
The Modern Palm Oil Mill
At BELL, we are passionate about
Renewable Energy Technology;
we are one of the pioneers of this
Innovative Business Model in
Malaysia
Emphasis is on a power
plant as the primary, stand
alone component
supplying steam and
power to the palm oil mill,
and other surrounding
downstream facilities
BELL BDP (Biogas Digestion Product) answers the needs for enhancing the production of biogas. By improving the efficiency of the microbes, the substrate load can be increased. This results in more – and cleaner – biogas being produced.
• TECHNOLOGY - OUR APPROACH
Digestate treatment is part of the biogas process that is difficult to deal with. As the digestate contains nutrients useful for plants as well as other organic matter, it can be used as bio-fertilizer. The solid-liquid separation, which is one of BELL’s key competencies, enables nutrient recovery and recycling into the bio-fertilizer.
BELL Biogas Program is a combination of application know-how & high performance products. We manage the whole process from Feed to Hydrogen Sulphide removal with better process economics & higher efficiency.
We have a Biogas Flaring Facility at BELL Green Power Sdn. Bhd., Melaka.
Our CDM based Biogas Power Plant is at BELL Eco Power Sdn. Bhd., Batu Pahat, has a capacity of 2MW and currently generating green electricity to the National Grid
.
Anaerobic
Digester
Tanks
Carbosys
Mixers
Scrubbers
Gas Engines
Glass-Fused Steel Tanks Mild Steel Tanks
BIOTANQ® structures are engineered with a
predicted minimum 30 year design life in
accordance with the requirements of ISO
15686 Part 1, & incorporate the relevant
international design standards.
The life span of the mild steel tank is very
much dependant on the application & the
process environment. Most mild steel
digester will operate for 10-15 years.
Corrosion set in during 3rd year of usage.
The BIOTANQ® tanks can be coated to suit
the pH range of 1-14. With the corrosion
resistance of the glass application the
waste/gas is not in contact with the steel.
There is no corrosion protection for the mild
steel tanks & the waste/gas will be in contact
with the tank walls.
The installation of a 4000m³ tank took approx
12-14 days to complete.
The installation of the mild steel tank 4000m³
takes approx 1 month.
Versus
Glass-Fused Steel Tanks Mild Steel Tanks
Glass-Fused Steel Tanks Mild Steel Tanks
For the installation of the Glass Fused to Steel
tanks, the works are carried out at ground
level with the use of specialised Jack
equipment. Therefore, from a Safety aspect,
no work is carried out at height.
The welded mild steel tank is constructed
from the ground upwards & therefore the last
ring of the tank is install at approx 12m above
the ground, having a requirement for
workers, tools, equipment & materials to be
at height increasing the risk of hazards &
accidents.
Installed on the BIOTANQ® digester tanks are
double membrane gas holders having a
storage volume of 810m³.
From a calculation of the mild steel tank with
22.2m diameter & 1 m high roof the gas
volume would be 129m³ Calculation, V = ⅓ (
π x r 2 x h )
The gas holder provides a constant pressure
output of 8bar for the use with the gas
engines, regardless of the volume of gas
within the BIODOME there will be an output
under pressure.
The fixed mild steel roof only allows gas to be
withdrawn under pressure when the roof
space is full; once the volume within the roof
is reduced the pressure is lost & therefore gas
to be drawn out with the use of a pump
which creating potential vacuum situation.
Chopper Pump
POME
Biogas
Air pipe
Glass fused wall
Chopper pump draws POME from tank,
pumps it to ventury chamber.
Chopper Pump
POME
Biogas
Air pipe
Glass fused wall
Biogas is aspirated through air pipe,
mix with POME and injected into the tank.
3-Dimensional mixing pattern eliminates formation of surface scum
Higher efficiency Clog-free operation
The Carbosys equipment is the main component of an integrated system we use to analyze the methane that is captured from biogas
Carbosys Integrated System
To remove Hydrogen Sulphide (H2S) from biogas, we use three Scrubber Towers
If Hydrogen Sulphide is not removed, it undergoes chemical reactions with sulphur dioxide (a product from the internal combustion) to form an acid which causes corrosion and wear on the Gas Engines
Three (3) Scrubber Towers
The physical principle prevalent in the gas engines is Internal Combustion
Here biogas is used as fuel and burnt in the presence of oxygen to generate electricity
The electricity, generated, is exported to the National Grid
Gas Engines
Continual success of Palmbased Biogas Program depends on the sustenance of the project
One major source of sustenance for this project is its revenue landscape. These include:
The Malaysian Feed-in Tariff system is the main source of revenue for our Renewable Energy projects
It provides a platform where:
individuals or companies (who are eligible to sell renewable energy) can sell electricity
at a certain rate (FiT Degression rate)
for a period of time
to companies that are licensed distributors of electricity (e.g. TNB, SESB, NUR)
It was brought into force by the Renewable Energy Act 2011, enforced by the Sustainable Energy Development Authority Malaysia (SEDA)
CDM is another landscape through which we have obtained revenue for this project in the past
This is usually verified by Designated Operational Entity under the Kyoto Protocol
Each unit of CER can be traded or sold
One unit of CER is equivalent to 1Mton of Carbon Dioxide Reduction
We were issued carbon credits by UNFCCC for emission reduction achieved by our CDM Biogas project
The CDM initiative encourages institutions and countries to reduce their carbon emission and rewards them for doing so.
In implementing this system, we have faced many challenges
The main challenge we have faced is that supply of CERs for trading is high while demand is low.
As a result of low demand, we have not been able to sell all
our harvested CERs.
At BELL Eco Power Sdn. Bhd., we have harvested a total of
19,000 CERs then but only sold 7,000 CERs at a rate of
16USD per unit of CER.
Thomson Reuters Point Carbon predict that oversupply in
carbon credit market could hit 1.4 billion credits by 2020
How high supply and low
demand of CER have affected
price ($) of CER
This surplus has resulted in the continuous fall of carbon prices
It has also caused a reduction in the amount of CERs that are sold
Dewatered Solid
Besides the generation of biogas, the Anaerobic Digester Biogas System also helps in the separation of the liquid and solids that constitute POME
The digestate solids obtained from the Anaerobic Digester are sent to a Dewatering machine where residual liquid is removed from the solids
The dewatered solids are then sold as bio-fertilizers
With BELL strong dedication to
water chemistry and water
treatment, BELL is able to offer
application know-how to improve
quality of water recovery from
the residual liquid.
Reducing our carbon footprint should be the collective goal of all key players in the Palm Oil Industry
It is important to identify and maintain the revenue landscape so as to ensure sustenance of the project
For continuous success in greening the Palm Oil Industry, It is important to utilize the resources available to continuously develop and improve People, Process and Product (3Ps)
People = Engineers &
Technicians replace
unskilled workers
Process = Reduce Process Time
Reduce Process Space
Increase Process Output
Process Automation
Product = state-of-the-art
innovative
products
• THE WAY FORWARD
Through the Entry Point Project 5 (EPP 5) under the National Key Economic Areas (NKEA) formed in 2010, Malaysia is set on course to implement biogas technology in all palm oil mills across the country by the year 2020.
In line with this, MPOB has proposed that with effect from 1st January 2014, all new palm oil mills and existing ones are mandated to install full biogas capture or methane avoidance facilities.
As of September 2013, only 60 out of 430 mills have installed biogas facilities and only 4 RE Producers are exporting green electricity to the National Grid. WHY?
COMPANY CAPACITY
(MW) FiT CD
1. BELL Eco Power Sdn. Bhd. 2.0000 Nov-12
2. Achi Jaya Plantations Sdn. Bhd. 1.2500 Feb-13
3. Felda Palm Industries Sdn. Bhd. 1.1000 May-13
4. Biopower Climate Care Sdn. Bhd. 2.1260 Aug-13
Source : SEDA Malaysia Official Website (http://www.seda.gov.my)
QUESTION:
Why so few palm oil millers installed biogas capture systems
from the time the EPP was introduced in 2010 until now???
The Problem ?
1. High Capital Cost
We have spent over RM 20 Millions on our 2MW Biogas
Plant since project inception till date. This is because as
pioneers, we faced a very steep learning curve.
We deployed the most advance Biogas Digestion Product
taking Energy Recovery to the next level.
“At RM 9 Millions per MW, newer biogas plants can be set up for RM18 Millions
– still a relatively high figure. “
2. Economic Viability
“A 60 MT/hr palm oil mill installing a biogas power plant of 1.8-2.0 MW capacity
will gain about RM 3.34 Millions in revenue, RM 1.84 Millions in net profit and a
payback period of 9-10 years.“
Current FiT rate is non competitive and unduly lengthens the project payback period.
With the yearly degression mechanism, the FiT rate will eventually be on par with the Coal-fired power plant electricity rate.
Low Price of CERs – Gas Flaring is no longer an attractive revenue landscape for palm oil millers.
“ A 60 MT/hr palm oil mill will generate an estimate of 30,000-40,000 tonnes of
CO2eq. With the current market price of € 0.60/tCo2e, the revenue generated for
such a mill would be approximately RM 90,500 per year – not even enough to
cover the consultation fees!! “
3. Non- favorable RE Policies
Conditions for revocation of Approval:
The Renewable Energy Act 2011 makes it very easy for licenses to be revoked even though the testing, commissioning and approval of biomass and biogas projects (under this Act) already make it very tedious for palm oil millers to comply.
" Clause 10 (1) (a) allows for revocation of feed in approval for ANY non-
compliance with any provisions of the Electricity Supply Act or Regulations.
This provisions is unnecessarily restrictive and not necessary as there are
already several levels of penalty provided for under the Electricity Supply Act
and Regulations. This legislative requirement causes the bankability of the
project to be called into question. "
3. Non- favorable RE Policies
Additional Technical Requirements:
The Renewable Energy Act 2011, Regulations and
Guidelines stipulate numerous technical requirements,
most of which are already provided for or can be provided
for under the Electricity Supply Act 1990 or Electricity
Regulations 1994.
It would be appropriate to allow for all statutory technical
requirements in respect to RE power generations or
distribution to fall back to Energy Commission; or the
Department of Occupational Safety and Health under the
Factories and Machinery Act. This will simplify
compliance.
3. Non- favorable RE Policies
Fluctuation of Green Technology Financing Scheme Policies
As at 11th October 2013, the GTFS policy has changed
overnight without notice; to either 30% Government
guarantee or 2% bank interest rebate (as opposed to the
60% Government guarantee and 2% bank interest rebate
in force for over the last 2 years). This sort of change is
not healthy for GTFS applicants who already began the
process long ago. It upsets initial banking projections and
forces a recalculation of the same.
Criteria for Green Technology Financing Scheme
- should be open to new and also existing Palm Oil Mill
Waste Management Renewable Energy projects.
• The Government of Malaysia is focusing on the wrong
renewables like Solar Photovoltaic Energy. Solar PV is the
energy of the future, possibly ten years from now. Solar PV
Technology needs further development to reduce its carbon
footprints.
What happen at the end of solar PV lifetime??
The solar PV product cost is dropping as technology
improved & solar PV technology is changing rapidly. The
cost of solar PV product may drop by about 50 % within the
next five years, only then should the government consider
subsidizing solar PV energy through the RE Act.
For now Malaysia has a viable alternative in renewable
energy - Palm Oil Waste from Palm Oil Mills.
• The government ought to be dealing with the palm oil
industry’s immediate problems – huge Biogas and
Biomass waste from palm oil mills.
• Energy from POME is a Waste Management Issue and
NOT just ‘Power Generation Plants’. They are there to
manage our waste more sustainable; to treat our waste
safely and effectively and the benefit of a modern POME
waste facility is that we get energy or electricity.
That’s the way to look at it.
Hence, our challenges must be addressed from this
perspective if we are to see lasting results for the palm oil
industry.
• We recommend as the following:
Our recommendation to the Government
Our recommendation to the Government
1. Revision of FiT Rates and Simplify the Process:
We recommend higher FiT rates and/or a wider range of
applicable Bonus FiT to make Biogas capture projects more
competitive & attractive especially for the palm oil millers.
Also, installing, testing, commissioning and approval of
biomass and biogas projects should be simplified.
2. Financial Support/Incentives:
Financial support should be given especially to Independent
Commercial Millers to ease the burden placed on them by
the high project capital outlay.
The Independent Commercial Millers are vehicles assisting
Smallfarmers in processing their crops.
POLICY REVIEWS
Our recommendation to the Government
“Thailand’s RE sector has had intensive support from the
domestic government through several support schemes.
Examples of these schemes include, funding on Research
and Development and Demonstration (R&D&D), direct
subsidies (10% – 30%) on biogas, 8-year tax holiday, soft
loans and government joint investment schemes“
CASE STUDY
The Thai Government is absolutely supportive of its own
Energy Security & passionately works for its own
National Interests.
The Thai RE Domestic Mandates are Game Changers.
Our recommendation to the Government
3. Offering Renewable Obligation Certificates:
Our Malaysian government should support conversion
technologies by offering Renewable Obligation Certificates
(ROCs) to energy producers. These ROCs can be traded
between energy producers and buyers, thus creating a liquid
market to generate extra revenue for RE power generation.
One ROC =1 Mwh of green electricity
POLICY REVIEWS
Distributibution
Licensees RE Producers
Uses ROC as a tool to meet
quota for % RE contribution
of Total Energy sold to
Consumers.
OR
“No individual can bear the cost of this alone. When approached collectively, contribution by each is less so output will be greater.”
Our recommendation to the Government
4. Collaboration between Ministries and Stake-holders –
There must be cohesive collaboration between Ministries
and Industry to support Waste Management Initiatives. This
collaboration could be through technology transfer and/or
funding.
PUBLIC /PRIVATE PARTNERSHIPS
“R & D on Total Waste Management &
Biogas Capture Technology Must Be Centralized by Government Initiative before its implementation is made Mandatory!”
Our recommendation to the Government
4. Collaboration between Ministries and Stake-holders
PUBLIC /PRIVATE PARTNERSHIPS
INDUSTRY
STAKEHOLDERS
TECHNOLOGY
PROVIDERS
TECHNOLOGY
+
FUNDING
• We are all moving
towards the same
goal!
• We must work
TOGETHER to draft
policies and share
technology that will be
beneficial to ALL.
GOVERNMENT
MINISTRIES
(MPOB/NRE/PEMANDU
/SEDA)
Our recommendation to the Government
5. We propose a redefining of SEDA Malaysia’s Roles -
SEDA should move from its current Micro Role to a more
important Macro Role
REVIEW THE ROLE OF SEDA MALAYSIA
Waste Management Strategies
Municipal Waste Palm Oil Mill Waste (Biogas & Biomass)
Implement Mechanisms to address
the Logistics of Distribution and
Management of Municipal Waste into
Clean Efficiency Renewable Energy
instead of Landfills.
Spearhead and Centralize R & D on Energy
Technology for Total Waste Management for
the Palm Oil Milling Industry. Take advantage
of the High Technologies available to
revolutionize RE.
Our recommendation to the Government
6. We propose the establishment of a localized Carbon
offsetting Mechanism
Establishing localized Carbon offsetting Mechanism
Once the mandatory Biogas capture regulation is enforced in Malaysia, palm oil millers are automatically disqualified from applying for CDM.
Now the government and the industry must move towards developing localized carbon offsetting mechanisms for Voluntary Emission Reductions (VERs)
These offsetting mechanisms could either be inter industry based or intra industry based wherein Organization A (offset buyer) purchases emissions reductions from Organization B to offset its carbon emissions – The overall aim is to walk towards a carbon neutral industry
The Validation and
Verification of the VERs
can be done by a local
agency – SIRIM
Benefits
• Cleans the Environment
• Provides Funding for
Innovative Low Carbon
Projects
• Moves Malaysian Industries
towards Carbon Neutrality.
Our recommendation to the Government
Establishing localized Carbon offsetting Mechanism
• The Malaysian Palm Oil Industry has been utilizing co-generation RE long before the issues of climate change. As such, our Palm Oil Industry must be the Forerunner in the RE Marathon and take the lead in the Green Revolution.
We have the opportunity to beautify, clean up and
modernise the Palm Oil Industry and change the western
world’s perspective on our methane emissions, dirty POMs
and climate change.
Methane could be upgraded to Biomethane as Vehicle Fuel, will significantly reduce the clout of the NGOs & actually shame western government who have only TALKED about a Low Carbon Transport Fuels.
• Mandatory Biogas Capture Regulations are here to stay!
• Waste Management is a National Issue. The Palm Oil
Industry is already facing immense pressure and competition
from the rest of the world. High technology is needed to
remain competitive – but this is not cheap. We need a lot of
support from the Government.
To encourage palm oil millers to build biogas plants, the FiT
rates need to be reviewed and more government-backed
incentives need to be administered.
Once all these are done, Malaysian Palm Oil Millers will have
no problem with executing World-Class, State-of-the-Art
Biogas Capture Projects.
