Renewable Energy from Palm Oil Biomass in Malaysia

Mohd Shaharin Umar*, Philip Jennings, Tania UrmeeMurdoch University, Western Australia

World Renewable Energy Congress-Australia 2013

15 July 2013

• objectives of the research• methodology• resource availability• policy system• barriers• solutions in the FiT

• future strategies

An Overview

Objectives of the research

• To evaluate the sustainability of the oil palm biomass renewable energy downstream value chain components

• To design future strategies for a sustainable industry

3

Downstream Value Chain

Conversion

Technology

Conversion

Technology

ResourceSupply

ResourceSupply

Grid Extension System

Grid Extension System

Conventional Energy +

Renewable Energy

Conventional Energy +

Renewable Energy

Final ConsumersFinal Consumers

Palm Oil Mills Power Grid and End User

(Supply) Transmission Line (Demand)

Methodology

Literature Review

Survey Quantitative Analysis

Analysis

Qualitative Analysis

InterviewsFocus Group Meeting

Recommendations

Resource availability

6

Source: Ahmad et al. (2011)

8th Malaysia Plan (2001-2005)The 5th Fuel Diversification Policy & SREP

Renewable Share of 5% in Energy Mix 2005

9th Malaysia Plan (2006-2010)Renewable Share of 1.8% in Energy Mix

2010

10th Malaysia Plan (2011-2015) & BeyondRE Policy & Action Plan

RE Act 2011, SEDA 2011 & FiTRenewable Share of 5.5% in Energy Mix 2015

Source: Compilation from the various Policy Documents (2011)

Policy System

Renewable Energy Target for FiT

Source: MEGTW (2010)

Barriers

• Policy - Economic & Social

• Industry - Decision making, economic factors and operational complexity

Solutions in the FiT

• Eliminate economic barriers - fixed price, purchase obligation, technology bonuses, long contract, RE fund

• Institutionalise the industry – establishment of SEDA

BUT

• Absence of definite solution to improve downstream components due to non-intervention approach by the regulators to facilitate small producers

Solutions in the FiT (continued….)

• The FiT system is not optimal due to lack of sustainable options

• Need a holistic market reform strategy

• to establish a fuel collection hub

• to explore the use of a variety of residues

• to enhance R&D and research budget

Strategies for sustainable industry

• to establish a large-scale biomass energy plant

• to explore the technology hub approach

• to increase the role of local technology providers

Strategies for a sustainable industry

• to promote a decentralised system

• to improve the interconnection scheme

• to explore utility-market entities cost-sharing model

Strategies for sustainable industry

Conclusions

• Massive conversion of oil palm wastes into clean energy would help in turning Malaysia into a low carbon economy

• Future modification of the FiT system by including sustainability strategies is essential, particularly in supporting the downstream components

Thank you…

Palm oil environmental impacts

• no long-term plantation expansion plan

• industry strategy is to replant low value crops with other export crops eg: rubber, cocoa

• sustainable forest management eg: international commitment during Conference of the Parties (COP) 15 in Copenhagen 2009 to keep 50% of its land as forested areas