Everyone in the know of renewable energy agrees that the best investment and what should be done first is energy efficiency. Energy efficiency is the low hanging fruit in the economy’s transition to less greenhouse gas emissions. Let’s look at it from the perspective of our Utility Power Stations.

Public in the Know and their Participation requires Transparency and Timeliness of Information – Energy Commission Annual Reports

Public in the know and their participation in the well being of the energy industry has usually been a force of motivation for utilities to pick the low-hanging fruits, than leaving it to rot and pollute the environment. Public involvement is important as they are the biggest stakeholder in the energy industry; they consume and pay for the energy, and are concerned about how clean is that energy. The public need transparency and timeliness of relevant information for their participation. The annual report of the Energy Commission of Malaysia on utility energy efficiency can enhance transparency and timeliness to encourage the public participation. The way the statistical information is currently presented in their annual report reveals only half the picture and is insufficient for public to understand what is going on in the industry.

Power Plant Thermal Efficiencies and Pollutant Emissions

When one examines the operational thermal efficiencies of the power stations in Peninsular Malaysia (as reported in the ‘Performance & Statistical Information 2008’ published by the Energy Commission), and compares those figures against corresponding known design efficiencies of the said power plants it is apparent that the losses due to inefficient operations are staggering, as indicated by an example of an operating TNB power station, where a 2100 MW power plant loses RM 300 million a year in burning extra coal to make up for the inefficiency. Burning extra coal translates to emitting that much unnecessary greenhouse gas emissions.

The statistical information currently published by the Energy Commission reveals an incomplete picture of power plant performance i.e. it shows only the efficiency as a ratio of electrical energy produced against fuel energy consumed. It does not compare the efficiency of the power plant operation against its design efficiency. The design efficiency and its design capacity are what the capital cost has been paid for. The report also does not reveal the operating capacity at which the plants are being used. To reveal the whole truth Energy Commission needs to declare the design efficiencies of every power plant in the system for comparison and policy formulation purposes.

Tabulating the operational thermal efficiencies against the design (or ‘Acceptance Test’) thermal efficiencies for every machine operating in the power system will show a clearer picture of the extent of degradation but at the same time, indicate the potential for financial and environmental improvement. Thermal efficiency degradation has three direct consequential detrimental effects on the electricity power industry:

1. Additional fuel cost;
2. Additional emission of greenhouse gasses and other pollutants; and
3. Loss of generation capacity requiring power capacity addition.

To reiterate, when there is degradation in thermal efficiency this will lead to a concurrent reduction in generation capacity. A further tabulation of the operational unit capacity factor based on rated capacity for every machine operating in the power system could provide additional valuable insights into some of the reasons behind the efficiency and capacity degradations. The operational unit capacity factors will further reveal how well the installed plant capacities are used.

As an example, when TNB had to resort to purchasing distillate fuel on the spot market costing RM 3.0 Billion to operate the aging gas powered plants, the question arises whether the newer more efficient and economical power plants using coal as fuel were operating at design efficiencies and capacities? Another question is whether any open cycle gas turbine power plant that guzzles fuel at low efficiency were in operation? These are the first thoughts that come to the public’s mind in view of the much debated ample generation reserve margin capacity that the power generation industry enjoys at present. It is incumbent upon the Energy Commission to reveal these information to the public as the public need to know the information to appreciate the true situation.

It is suggested that the above two tabulations are included annually in the Energy Commission’s ‘Performance and Statistical Information’ to enhance transparency in the power generation industry.

It is established knowledge that power plants can maintain their design efficiencies and capacities throughout their life, and even after decades of operation, by putting in place good maintenance programmes. In fact, in many utilities, the operational thermal efficiencies have even surpassed their original design efficiencies by taking advantage of new technologies in repowering older machines. Therefore, there is an urgent need to scrutinise the reason for the huge degradation of thermal efficiencies reported and the ensuing increase in greenhouse gas emissions. Here we need not elaborate the massive financial expenses incurred by the government, principally due to the mechanism of fuel pass-through subsidies to the independent power plant operators.

We are given to understand that commencing in the year 2007, TNB and IPP’s have begun introducing voluntary initiatives to improve the thermal efficiencies of their power plant in view of the demand for a reduction in emission of greenhouse gases and other pollutants from the power plants. It will be interesting to assess their achievement in this regard to-date, when the pending final report for the year 2009 and interim report for the 2010 are released by the Energy Commission.

Surprisingly, we note that there is limited publication and a general lack of active discussion by TNB or IPP’s on work related to clean energy development or climate change remedies related to the power generation industry, an area of immense global concern today.

To improve transparency, the Energy Commission should be encouraged to publish current thermal efficiencies and capacity factors alongside with the corresponding targets TNB and IPP operators have set for each of their generating units in their portfolio (the final target being their respective design efficiencies and capacities).

Based on the last four years’ results of these voluntary efforts to recoup lost thermal efficiencies by TNB and IPP operators, the Energy Commission could consider whether regulatory measures are required to motivate TNB and IPP operators to meet their machine design efficiencies. This may be necessary to bring about the desired reduction in emissions of greenhouse gases and other pollutant caused by these inefficiencies, let alone the government having to bear the additional fuel cost due to these inefficiencies.

This will be a prudent action inline with the country’s aspirations and promised commitment in emission reduction.

Capacity Addition

From the news media, it would appear that TNB and the Energy Commission are preparing to add new power plants to augment the installed generation capacity by two plants of between 800 and 1000 MW. Thus it would be timely and prudent to examine the current extent of capacity degradation and potential for restoration of the lost capacities in the present generating plants before embarking on the expensive new plants.

With the present installed capacity of 20,000 MW, by merely improving the capacity factor through thermal efficiency restoration and other schemes, the existing plants should be able to increase the actual generating capacity by 1000 MW (5%) much earlier than the four years it would take for the new plants to come on stream, especially with the initiatives already underway with TNB and IPP’s. This will serve to not only avoid or delay capital expenditure, but also save on fuel cost and protect the environment. These are bonuses to be reaped by these measures of efficiency/capacity improvement.

Clean Coal Technologies

It is evident that TNB and the IPP’s are competing for the proposed generating capacity and the Energy Commission has already indicated in the news media that a study is underway to select the most appropriate site. We consider it prudent that the Energy Commission informs the public of the clean coal technologies that the three competing operators have proposed for consideration. At the proposed plant capacity level of between 800 MW and 1000 MW, there are several competing advanced technologies as listed below that provide significant higher economics of operation through higher thermal efficiencies coupled with near zero emission levels:

1. Ultra Super Critical Pulverised Coal (USC PC)
2. Super Critical Circulating Fluidised Bed Combustion (SC FBC)
3. Integrated gasification Combined Cycle (IGCC)

These three clean coal technologies are proven advanced clean electricity generation technologies to meet the challenge of Climate Change by offering:

1. Lower fuel cost through high thermal efficiencies (more than 44% on GCV)
2. Lower greenhouse gases and other pollutant emission (near zero-emission)
3. Fuel flexibility (use of low grade coals, and even co-firing biomass)

Considering the uncertainties of fuel supply and prices in the future, it is judicious to explore the new technologies from different aspects that would have a bearing on economic operation. A comprehensive justification from all angles for the proposed technology should be presented to the Energy Commission for consideration. With TNB and IPP’s having several years of experience with coal-fired power plants one would hope that any one of technologies mentioned above will be proposed for the near future. These technologies could be a prelude (or preclude?) to our embarking on nuclear fuel. However, it is puzzling to note that to-date there is absolute silence on this matter. Public participation should be encouraged through providing them with necessary information.

Marine Eco-System Protection

As part of the overall efforts to care and preserve our environment, power plant operators need to pay special and urgent attention to the effects of their operations on our marine eco-system. Almost all the existing thermal power stations use seawater for their cooling.

To control the inevitable bio-fouling in the cooling system, Chlorine as a strong oxidant is currently used to kill the bio-organisms that foul the system. A typical 3 x 700 MW power plant discharges about eight tonnes of Chlorine daily into the sea. This causes serious damage to our marine eco-system.

With our heightened regard for protection of marine eco-system, TNB and IPP’s should be encouraged to look at mild and safe non-oxidant alternatives to Chlorine as is actively being pursued in advanced countries.

It is commendable that the Bill attempts to create a predictable regulatory framework including grid integration. However, there are some shortcomings in the Bill that need further scrutiny. This is an important Bill having far fetching consequences because it involves public funding for long-term contracts the government will be engaging with the private sector. The fund is expected to be raised through higher electricity rates to the public.

The most glaring shortcoming is that the Renewable Energy Bill has not set efficiency standards for harnessing renewable energy. This is a fundamental requirement because renewable energy must meet certain objectives such as environmental sustainability and energy security through diversity. The reason that RE low efficiency is not acceptable is because then it does not contribute to net carbon footprint reduction and therefore does not comply with the duty to contribute towards environmental sustainability, in particular Climate Change. The Renewable Energy Bill has overlooked this fundamental premise of why the world is pursuing RE with such vigour.

A survey of countries which offer public subsidy to encourage renewable energy generation reveals that in most countries the subsidy is mandatorily tied to minimum efficiency standards. For example, in the European Union, for any public subsidy to apply, efficiency for harnessing renewable energy from biomass and biogas are enforced through the concept of “CHP Quality” where progressively higher tariffs are offered as the efficiency increases above a minimum threshold where the minimum threshold efficiency itself is set high to begin with.

The Renewable Energy Bill 2010 offers a bonus for efficiency levels reaching 14% and above. This is a very low figure. A further limitation is that, the Sustainable Energy Development Authority (SEDA) within their authority will not be legally able to impose efficiency criteria, because stating an efficiency figure in the Bill becomes an implied term that efficiencies below 14% are allowed.

If one reads through the Bill, it appears to be a hastily assembled copy and paste document from some assorted sources without much thought given to local situation. We are to seek our own tailor-made solutions after taking into account our resources, conditions and needs.

This important regulatory framework should be structured to promote and prioritise renewable energy technology options that are appropriate for the local state of affairs. Before a renewable energy regulation is embarked upon a good understanding and knowledge about the potential and resource availability of each technology should have been studied. After all we have had about 9 years since the Energy Policy in the 8th Malaysia Plan, which introduced renewable energy for the first time. This should be ample time to grasp the state of affairs and requirements and sufficient opportunity for this purpose.

The Bill appears to be satisfactory perhaps for solar photovoltaic, where efficiency is not much of an issue. It is easy to implement solar photovoltaic systems where no special knowledge or skills is required; it can be considered a technician’s job whether small or large capacity is involved. Unfortunately, it’s not the same with other forms of renewable energy, especially where biomass and biogas are concerned, which require some innovative thinking for its success.

Some questions to ponder are:

• Exactly which biomass and biogas are we targeting?
• Which geographic regions are we considering?
• What is hindering its development?
• What is required to develop these resources?
• What are the special issues with these resources?

Answers to the above must be known with reasonable accuracy and certainty before any policy can be formulated.

The government is heading in the right direction, but it seems to have stopped short. We are aiming for environmental sustainability by reducing harmful greenhouse gases and enhancing energy security because we want independence from fossil fuel and diversification in fuel supplies. Solar energy may be in abundance but its harnessing technology is not affordable at the present time. On the other hand biomass and biogas are scarce resources in the renewable energy mix but there are dire urgent needs to utilise them for several pressing reasons, main reason being if biomass and biogas are left unutilised they will emit enormous amounts of lethal greenhouse gas, far more than when fossil fuel is burned, affecting Climate Change even more adversely.

Biomass and biogas can offer carbon emission reduction when they displace fossil fuels, but only if they are used efficiently and this is established science. Renewable energy regulations must reflect the scarcity of the resource and findings of the science. Unbelievably, the Renewable Energy Bill sets no minimum efficiency for biomass energy resource. Unless it is corrected early we are going to be saddled with 16 to 21 year contracts with the damaging mistake.

Shockingly, the new regulations give private biomass energy plants special status to receive public subsidy for their energy under the “community feed-in tariff” without attention to efficiency.

In Malaysia, biomass and biogas are predominantly from the Oil Palm industry. Other sources of biomass are timber industries, rice mills, and sugar mills but these are a small portion, whereas municipal solid waste needs special treatment.

The Oil Palm industry has been for quite sometime under severe pressure to move the industry towards environmental sustainability. This pressure comes from several fronts, one from their own conscience of Corporate Social Responsibility (CSR) and the other from Western Environmental NGO’s which continue to pursue relentless campaigns against unsustainable Oil Palm industry activities.

All these are influencing European Community trade policies. The Americans are pacified for the moment but they are watching us too. In actual fact the industry has the means to reduce carbon footprint by a whopping 30 million tonnes of Carbon Dioxide per year that would contribute significantly towards global environmental sustainability in respect of Climate Change. This amounts to CO2 emission equal to almost half the coal burning in the UK.

The good news is the Oil Palm industry has the capacity to provide up to 2,000 MW of Green Energy to the national power grid and another 4,000 million litres of fuel oil equivalent per year by solid biofuel for industrial heating purpose. However they are unable to exploit it because of the lack of grid access for electricity export and market access for its biofuel. Presently this amount of renewable energy is shamefully left wasted to pollute the environment. In another perspective, 2,000 MW of electricity generating capacity is the capacity of three nuclear power plants that is currently under review by the government.

Funnily enough the Oil Palm industry has never asked for any public subsidy but instead local market access for the excess energy. They need Feed-in-Grid to harness the renewable energy in the biomass and biogas to move the industry forward to environmental sustainability. Only about 25% of the palm oil mills are located within five (5) kilometres from the nearest power grid access point and laying electric cables to carry the power to the grid cost about RM 1 million per kilometre. Presently the conditions imposed for export of electricity to the power grid are too stringent for a process industry. The market for solid biofuel is yet to be established.

As far as the Oil Palm industry is concerned, the present electricity purchase price provided in Renewable Energy Power Purchase Agreement (REPPA) is satisfactory for undertaking investment into efficient energy generation for export. This is because the mills already can have good profits but they are unable to develop it further because of problem with power grid access. The REPPA electricity purchase price is set at 21 sen per kWh, which is about the present displaced cost to the distribution licensee.

The conditions dictated for export of electricity to the power grid under the REPPA are too stringent for a process industry. It is very difficult for a process industry to meet the conditions of a dedicated electricity generating utility. Therefore, whatever Feed-in-Tariff is offered, the industry’s quest or the country’s desire to push the renewable energy agenda cannot be accomplished, unless the power grid infrastructure and the appropriate conditions of supply-intake are ready.

We should take note that if ever there is some screaming for higher tariff, they are not the palm oil millers but corporate entrepreneurs who intend to purchase the Empty Fruit Bunches (EFB) from the mills and set up cheap low efficiency power plants. These operators are in desperate need for higher tariff subsidy to show their investment as viable. These power plants are run typically at about 14 – 17 % efficiency and at these low efficiencies the electricity produced is not considered renewable energy as the operation does not reach net carbon footprint reduction, neither does it meet the vision for “enhancing the utilisation of indigenous renewable energy resources”!

Further, the investments are not viable without high purchase price and soft loans. It is therefore unconscionable to tax the public to subsidise for someone’s inefficiency! In contrast, energy produced at the mills will be by means of cogeneration at above 80% efficiency. Further, the mills have a greater stake at running the integrated power plants reliably as it has a bearing on their core-business of milling the palm oil fruits. Therefore, a scientifically proven minimum efficiency level for green energy will keep at bay undesired consequences.

Biomass Lessons of the Past not to be Forgotten

We need to revisit our past experience to gain insight into the future.

The United Nations Development Programme (UNDP) and The Global Environment Facility (GEF) came forward in 2002 to support the UNDP/GEF Biomass Power Generation & Demonstration (Biogen) Project to assist in implementing a high efficiency renewable energy cogeneration plant for the Oil Palm industry with technical assistance and substantial combined funding from UNDP/GEF and the Malaysian Government.

The project was implemented as the MHES Asia Biomass Power Plant in Negeri Sembilan and undertaken jointly with the Ministry of Energy, Green Technology and Water. It is to be noted that the project was originally conceived as a high efficiency renewable energy cogeneration (Combined Heat and Power) project specifically to integrate with a palm oil mill to serve as a showcase or demonstration project for the Oil Palm industry in view of the vast amount of biomass available in the industry. However, it turned out to be a tragedy and a disaster that the project ended up as just a standalone low efficiency empty fruit bunch incineration plant that failed to live up to its purpose. There is no evidence to show that anyone from the Oil Palm industry was consulted on the project.

It is now reported that the project developer has abandoned after a last drawdown of a government guaranteed loan from a local bank even before completing the commissioning. How did UNDP/GEF an international trusted body get hoodwinked into the project when the funding was originally allocated to showcase and demonstrate a cogeneration project to the Malaysian Oil Palm industry? One wonders whether the UNDP/GEF was under so much pressure to show timely statistics on spending the fund? A minimum efficiency level would have averted such an embarrassing disaster. A recent speculation is whether the bank saddled with bad loans to the MHES Asia Biomass Power Plant will seek Feed-in-Tariff subsidy from the public to package with and sell off an otherwise useless project.

Another case in point is the recently announced Felda-TNB joint venture project in Jengka. This is again a standalone low efficiency empty fruit bunches incineration plant consuming 660,000 tonnes of EFB per year to export 10 MW to the power grid. Its operation at about 16% efficiency will not scientifically qualify it as a renewable energy plant. Neither can the project be justified as a rural electrification program as the electricity is exported to an existing power grid and distribution system. It is quite difficult to comprehend the objective of TNB getting involved in this project as a strategic partner considering they should be more on their guard with their know how and all! Their Japanese joint venture partner had pulled out just before the contract award for the plant construction. The parties involved have been warned of its untenable renewable energy and the menace created to public safety and peace and harmony by the sixty odd round trips by 40-foot trailer lorries having to ply the public road per day transporting the water-laden empty fruit bunches to the power plant. Now, the speculation is rife whether the joint venture partners will seek Feed-in-Tariff subsidy from the public to sustain such a wasteful project.

There are lot more examples, but only two are quoted here with the intention of showing just how disastrous it can be to all stake holders if the Renewable Energy Act is not well thought out and structured to achieve the desired outcome in the years to come, bearing in mind we are dealing with long-term contracts. Minimum efficiency level is a safety net in regulation to harness renewable energy.

Solar Photovoltaic

Solar photovoltaic is included as one of the renewable energy technologies promoted in the Renewable Energy Bill 2010. However it is noteworthy that the Economic Transformation Programme (ETP) in its final report published in October 2010 has made reference to solar photovoltaic renewable energy. ETP has rightly reported that solar photovoltaic is not an economical option at the present time and that it may be considered when it becomes cost-effective say in about 6 – 7 years. This is the finding with public consultation.

The ETP Laboratories, where the Ministry of Energy, Green Technology and Water participated, with public consultation input identified that based on analysis of costs and benefits solar PV may become a viable option in about 2017 or 2018 when the cost comes down and however, that skills and learning need to be built in the form of small amounts of solar generation leveraging on the proposed feed-in-tariff mechanism. The Malaysia Building Integrated Photovoltaic (MBIPV) projects funded by EU since year 2005 should have given ample learning opportunities for building integrated photovoltaic designs, installations and operation. Therefore, the further learning leveraging the feed-in-tariff should not be directed to photovoltaic technology of solar energy installation (not roof top, building integrated, solar farm or any other) unless there is a specific special feature in integrating into a Malaysian environment with tremendous potential identified for further learning. Almost zero technology is involved in the present solar PV installation and operation. Public funding should be utilised prudently and not for an individual’s learning experience.

It must be mentioned that in eight EU countries, the uptake for solar PV installation was so rapid that their Feed-in-Tariff law needed to be suspended prematurely. The International Energy Agency (IEA) has recently reported that uptake is slow around the globe for lack of encouragement apart from the stated eight EU countries.

Another way of looking at public subsidy for renewable energy is that the promoted technology should attain grid parity within no longer than 7 – 10 years. For instance, Thailand’s renewable energy subsidy contact is for a period of 7 – 10 year depending on the technology. We are generous in offering 16 – 21 year contracts and therefore it is prudent that we promote technologies that have the potential to at least reach grid parity in a shorter time of 7 – 10 years. We do not want to see promoted technologies not survive long-term without aid or government backing.

It is therefore prudent for the Hon. Minister to forestall bringing into operation the provision relating to solar photovoltaic technology in the Bill until the feed-in-tariff has digressed to about 50 sen per kWh say, by 2017.

A solar thermal electric project for purposes of research, for instance should be considered, but unfortunately this technology is not one included in the Renewable Energy Bill.

Effort should be put in where innovative thinking is required and measure the success in that endeavour where the minds of engineers and scientists are a necessary input for success.

Small Hydro

It is commendable that the Renewable Energy Bill 2010 has considered small hydro for renewable energy promotion through public subsidy.

However, one thing that draws attention is whether a 30 MW capacity hydro plant stated in the schedule of the Bill is a small hydro plant that requires public subsidy to promote it. TNB has built and been operating about 50 mini hydro plants of about 1 MW capacity. In Thailand incentives are given to develop only hydro electricity plants not more than 200 kW (yes 0.2 MW).

It appears that Feed-in-Tariff subsidy in the Bill is structured to finance the development of hydro electricity plant and the power transmission grid to carry the power produced to the nearest TNB substation.

Further, it is not clear from reading the Bill whether the Feed-in-Tariff subsidy is meant to develop new hydro plants or extends even to operating existing mini hydro plants.

Renewable Energy for Heating

The government in the 8^th Malaysia Plan when proposing 5% renewable energy mix did not restrict to electrical energy alone and therefore due consideration should be given to heating energy, that requires burning millions of tonnes of fuel oil. This is an even bigger potential to reduce carbon footprint and mitigate global warming. The government should be committed to developing biofuels infrastructure and production capacity to serve domestic industrial heating needs to go hand in hand with cogeneration. This will enable biomass and biogas to be extensively exploited on a commercial scale for electricity production and heating to replace fossil fuel. It takes concerted and sustained effort.

Solar Water Heating for Homes and Commercial Buildings

Electricity consumption for home water heating using a premium energy source for heating is a present day transgression where there is an alternative. The housing ministry can make it a requirement for housing developers to install solar water heater as one of the mandatory facility. Almost every home has an electric hot water heater. We can look into implementing solar hot water heating systems on a large scale as a priority until solar PV gets affordable in 2018.

Conclusion

It is judicious upon the Minister to indicate the potential plants (palm oil mills, industrial cogeneration plants, rice mills, timber industries, sugar mills, small hydro and future solar energy plants) that are identified to be developed under various technologies using the Renewable Energy Bill Feed-in-Tariff subsidy scheme. The power grid development master plan with grid route indicated to harvest the power from the distributed generation should also be revealed for public consultation. With the above information the public will be inspired to appreciate what they are going to pay for and participate whole-heartedly in the promotion of renewable energy.

Power grid access should be made available to the renewable energy sources identified and the terms of the supply condition should be reasonable for a process industry. One way to solve this issue is to introduce the concept of “Renewable Obligation”, very successful in the UK, where an obligation is imposed on distribution licensee to source a specified and annually increasing proportion of their electricity sales from renewable sources, or pay a penalty, in which case the distribution licensee will be motivated to go to the renewable energy supplier with amenable supply conditions.

Efficiency of operation for the various renewable energy technologies must be a mandatory term embedded in the Renewable Energy Act.

The Renewable Energy Act will have far fetching consequences and therefore public participation is vital for a sense of ownership and its success!

Any technology that does not project grid parity within a period of 7-10 years should not be allowed public subsidy and therefore the provision should not be allowed to come into operation. This goes to the objective of the Feed-in-Tariff to jump start a technology for skills and learning purposes until the cost come down to affordable level. If necessary, special fund can be allocated by the government for skills and learning purposes.

The development of a power grid to harvest renewable energy in manner of distributed generation in the country due to future trend should be taken as a separate exercise by the government rather than through the Feed-in-Tariff subsidy scheme. Otherwise this could end up as unsystematic power grid development without a co-ordinated scheme.

Final word: Withdraw the Bill! It should be taken back to the drawing board where the properly constituted dedicated personnel of SEDA should be allowed to formulate the Renewable Energy Bill, subsequently table it for public consultation and only then submit for Parliament’s consideration.

Back in the 70′s there was a wave by countries to promote energy savings and energy efficiency driven by economic reasons following a hefty rise in oil prices. Today again there is another wave, and even more vigorous, but this time exerted by environmental considerations. The call is for sustainability, and more specifically to reduce harmful greenhouse gas (GHG) emission urgently to protect the world against climate change. Reducing greenhouse gas emission also goes hand in hand with enhancing our energy security, i.e., reducing dependence on fossil fuel and diversifying energy resources.

As global attention increasingly focuses on the environmental impact of economic activities, any unsustainable activity, particularly one that has adverse effects on the environment, is increasingly criticised. Where there exists an opportunity to reduce the negative impact on the environment any disregard of the said opportunity is also criticised as every industry is expected to find and implement ways to address this issue.

These environmental considerations are increasing the economic interest in technologies which can bring about efficient energy production and energy usage coupled with low emission. One way to achieve this is by means of an efficient use of biomass, which is a proven way to abate damage to the natural environment by displacing the use of fossil fuel. At the same time we must also take note that biomass is a scarce energy resource and therefore it is imperative that not only must we find a way to unleash the energy potential in biomass but find the most efficient use for its energy potential in order to displace the maximum amount of fossil fuel and to reverse the harmful effects of fossil fuel burning on the environment.

In this regard, of late, industries are coming under heavy criticism for not fulfilling their corporate social responsibility that is, for not doing more to contribute towards environmental and economic sustainability and the oil palm industry is not spared in this respect. While palm oil extraction and its processing technology are not new, increasing energy savings, by way of harnessing renewable energy in biomass residue, has not been fully exploited. Clearly there is a golden opportunity for the palm oil industry to develop further the technologies of energy production and usage because it is in the enviable position of having access to an abundant source of biomass plus a ready and growing demand for process heating within the palm oil mills and elsewhere to displace the burning of fossil fuel. Therefore there is merit in examining in greater depth on how to harness the renewable energy content in its biomass residue in an optimal manner.

On this note, it is commendable that Malaysia has volunteered to contribute toward this urgent international need to abate GHG emissions by setting voluntary targets for GHG emission reduction as its contribution as a nation sensitive to the pressing needs of the international community.

How Malaysia can contribute: What can we do to meet our targets for boosting energy savings and diversifying energy sources?

1. On the energy supply side, maximise the usage of renewable energy resources (carbon-neutral energy sources) available, consistent with our geographic location and economics to displace as much as possible the usage of fossil fuels, which is one of the biggest contributors of GHG.
2. Minimise avoidable losses (whether it is heat or electricity) by improving energy generation / conversion efficiency.
3. Abate sources of GHG emission – e.g. methane emission in uncontrolled biomass decomposition.
4. Manage energy demand efficiently, like better use of steam/heat, efficient industrial process design and operation, use of energy efficient motors and variable speed drives, automation, LED lights.

What are the Objectives for Using Renewable Energy (Biomass)?

1. Sustainability of the Environment
   • Reduce Greenhouse Gas emission from untreated biomass disposal
   • Displace fossil fuel usage elsewhere
     • Electricity generation at utility or industry
     • Heating at industry
2. Sustainability and Security of Energy Supply
   • Reduce dependence on depleting fossil fuels
   • Diversify fuel resources

The Oil Palm Industry as a Contributor

The oil palm industry can make a huge contribution towards achieving our goal of sustainability and reducing Malaysia’s GHG emissions economically and rapidly as many avenues are available in palm oil mills that can be exploited towards realising this objective.

While this industry has the capacity to generate huge revenues for its operators, its energy plants were designed in an era when the adverse effects of its operations on the environment were not as well understood. From the energy usage point of view, the present design and operation of the mills are extremely inefficient. This is mainly because of the availability of large amounts of excess biomass fuel from process residue and further because the mills are all dispersed and isolated that it is perceived to have no marketable avenue for the excess energy. This situation has contributed to the very inefficient energy usage of the mills, where energy is considered to be virtually free.

Some of the measures that can be taken to address this state of affairs are as follows:

1. Design palm oil mills to operate as centres of energy efficiency, where a 20% cumulative energy savings is easily achievable. This amounts to a staggering savings of an equivalent to burning 700 million litres of industrial fuel oil per year by the general industry where the excess energy can be used. This staggering figure should not be a surprise when we take into consideration the size of the industry. The mills should consider wider usage of efficient boilers, steam turbines, process design and operation, efficient electrical motors, variable speed drives and automation to be energy efficient. The mill personnel should be prepared for this cultural change (shift in mindset) to achieve this, through campaigns, demonstrations and training.
2. Maximise the export of excess electrical energy to the grid and at the same time liberate the maximum amount of unused biomass fuel for general industries’ heating needs once palm oil mills operate energy efficiently. Suitably treat and package excess biomass at the mills as a valuable by-product which can then be easily transported and burned at the end user site.
   The national grid will play an important instrument to harvest the excess electrical energy available at the mills distributed throughout the country, the purchase price being determined by public policy.
3. Encourage and motivate general heat consuming industries to use biomass efficiently for their heating needs displacing fossil fuel by providing appropriate rewards. This can be promoted through public policy incentives/ subsidy adjustments. This will motivate larger industries to also embark on combined electricity generation while meeting their primary heating requirements.
4. Compel mills to capture the biogas containing methane from the decomposition of palm oil mill liquid effluent (POME) in their holding ponds. The methane, being a lethal GHG is 21 times more destructive to the environment as Carbon Dioxide. This would serve as a huge GHG emission control measure.

The Malaysian Oil Palm Industry

Malaysia is blessed with a healthy oil palm industry which is an important contributor to the national economy. Palm oil mills that extract crude palm oil and palm kernels are dispersed throughout the country and discharge large quantities of biomass as a waste product. In this article we will consider the energy potential of the waste biomass discharged at palm oil mills and the means to optimally exploit this very important renewable energy resource at the mills. (This article does not consider agricultural wastes at oil palm plantations, such as pruned fronds and fallen tree trunks.)

There have been several other uses propounded for the biomass wastes discharged at the palm oil mills in the past like the use of it as cellulose fibre, bioplastics, fertilizer etc. , however very little commercial use has been made of it to-date.

Biomass as a Renewable Energy Resource

From the perspective of harvesting renewable energy from Mother Nature, utilising biomass has significant differences as compared with other forms of renewable energy like Solar PV, Wind, Hydro-power and Geo-thermal. These latter forms of renewable energies are generally capable of being directly converted as electrical energy for end usage. This is not so in the case of biomass where its energy potential in is chemical or thermal in nature like coal, oil, combustible gas and therefore its exploitation technologies are different.

Biomass first needs to be combusted in order to release thermal energy (heat) that can then be used for heating applications and/or the heat is subsequently converted to electro-mechanical energy. When the heat energy is converted to electrical energy only a small fraction (circa 40%) of the heat can be theoretically converted to electro-mechanical energy and this is a limitation by physical laws. To maximise the usage of the biomass energy, use has to be found for the balance of the heat energy that cannot be converted to electrical energy. Typically in a small scale electro-mechanical power generation using biomass, the net electro-mechanical energy conversion efficiency rarely exceeds 18%. In large scale utility electrical power plants the limit is stretched to about 38% to 54% by use of sophisticated technologies.

Thus, where the primary objective is to maximise the usage of renewable source of energy to displace fossil fuel with a collateral reduction in Carbon Dioxide emission, the above limiting phenomenon in the conversion of the biomass renewable energy dictates that pure electro-mechanical power generation without the use of the balance of the heat energy must be discouraged. The rational for this is to promote the use of the majority of the heat energy released from the biomass, which is considered carbon-neutral.  Because the Combined Heat and Power (CHP) systems can use fuel so efficiently, it is encouraged through public policy and regulatory tools.

Combined Heat and Power (CHP) System

CHP system is viewed primarily as a source of heat, with electricity as a higher valued by-product. The heat output by the CHP system typically displaces an onsite thermal-only system and the power output typically displaces power generated remotely at the utilities and purchased through the Grid.

Combined heat and power systems and power recovered from waste biomass energy can represent important contributions to meeting national Energy Efficiency standards and complying with carbon reduction policies.

The energy contained in the waste biomass from the palm oil mills can be efficiently utilised to provide the heat and power needs of the mill and the surplus electricity subsequently exported to the grid, such that very little energy is wasted. The ensuing surplus of the biomass can be produced as fuel products for the general industry that are in dire need of heat.

The general industry can in turn use the biomass fuel and operate their own combined heat and power systems to supply their heating and power needs, thereby displacing fossil fuel that had previously been used for their heating and electricity generated at the utilities that they purchase from the Grid.

Efficiency of Biomass Renewable Energy Utilisation

The following renewable energy utilisation efficiencies generally hold true for the various proven economic biomass renewable energy utilisation technologies and varies slightly with characteristics of the biomass fuel:

1. Combined Heat and Power (CHP):  86 %
2. Pure Heating: 68 %
3. Pure Electro-mechanical Power Generation: 16 – 18 %

From the foregoing utilisation efficiencies, where the primary objective is to optimise the usage of renewable energy to displace fossil fuel with a collateral reduction in Carbon Dioxide emission there from, CHP and Heating usage should be encouraged in that order of priority and usage through pure electro-mechanical power generation should be discouraged.

The Malaysian Oil Palm Industry Statistics

Statistics released by the Malaysian Palm Oil Board (MPOB) indicate that in the year 2010 Malaysia is expected to output 17.8 million tonnes of Crude Palm Oil (CPO) from a harvest of 85 million tonnes of Fresh Fruit Bunches (FFB) from the plantations.

There are 435 mills operational in the country processing the annual FFB crop output from the plantations and the processing capacities of these palm oil mills vary from 10 tFFB/h to 80 tFFB/h (tonnes of Fresh Fruit Bunch per hour). Of these, 250 palm oil mills operate at a processing capacity between 30 tFFB/h and 60 tFFB/h and a further 150 mills above 60 tFFB/h. There are only 35 mills that operate below the capacity of 30 tFFB/h.

On the basis of the above statistics, the palm oil mills generate solid waste biomass that can yearly contribute a renewable energy resource equivalent to 6,528 ktoe (kilo-tonnes oil equivalent), (in other words energy content in 6,528 million litres of fuel oil).

Of the total amount of renewable energy resources, the mills currently consume about 60% for their own use and the remaining 40% is disposed as solid waste biomass.  In monetary terms the disposed biomass has energy value of RM 8.12 billion calculated using fuel oil price of RM2.50 per litre. In addition to the solid waste biomass, the mills also discharge liquid biomass in the form of Palm Oil Mill Effluent (POME). The renewable energy resource in this waste is a further 730 ktoe ( = 730 million litres of fuel oil).

The Present Malaysian Oil Palm Industry Scenario vis-à-vis Renewable Energy

Palm oil mills use biomass to power itself in the form of Combined Heat and Power usage, albeit, in an inefficient manner. A portion of the solid waste biomass from the mills is used to power the mill processing both in terms of heating and electro-mechanical power. The biomass is combusted in boilers to produce steam. The steam is passed through steam turbine generators that produce electrical energy and the exhaust steam is used for all their heating needs. The heating and electrical energy needs of the palm oil mills consume about slightly more than half the potential energy constituted in the waste biomass.

As the mills have excess biomass over their need, the palm oil mills economise on their capital expenditure by employing low-cost low-efficient steam boilers and steam turbines to just about meet their energy requirements. Typically their boiler and steam turbine efficiencies are below 60%. Any higher efficiencies will cause too much of surplus biomass creating a bulky disposal problem. Mills today typically use all their waste fibre and most of palm kernel shells waste for their energy use and dispose off the empty fruit bunches.

For the optimum exploitation of the biomass renewable energy, market should exit to use both heat and electrical energy. Commercially marketable use need to be established for the potential energy in the surplus biomass. An object of this article is to suggest methodology/technologies towards public policy for such a full exploitation of the renewable energy potential in the palm oil mill waste biomass and thereby enabling avoidance of maximum amount of fossil fuel with its collateral reduction in Carbon Dioxide emission and lay a roadmap for its implementation.

Basis of Analyses of Biomass Energy Availability

On the basis of the above stated oil palm industry statistics for the year 2010 and in order to facilitate our analyses and presentation of the distributed nature of the potential renewable energy available in the mill wastes biomass, it is proposed that we look at the industry of an average of 394 mills each processing at 30 tonnes FFB per hour x 24 hours/day x 300 days per year.

Waste Products at the Palm Oil Mills

Palm oil mills discharge both solid and liquid biomass as follows:

1. Mesocarp fibre – solid
2. Palm kernel shells – solid
3. Empty fruit bunches – solid
4. Palm oil mill effluent – liquid

Suggestion

1. Promote palm oil mills in the country to operate as renewable energy-efficient factories themselves by:
   1. Encouraging them to employ efficient power plants with efficient boilers and steam turbine generators. Improve energy efficiency of processes for better utilisation of heat and electrical power, such as to minimise biomass usage and export surplus power to grid.
   2. Encouraging them to produce biomass fuel pallets/ briquettes as a marketable by-product using the excess residual biomass for general industry power/heating needs.
2. Create a market for the excess electrical energy they produce with national electricity grid co-operation.
3. Create a marketable condition for the biomass fuel pallets/briquettes produced (encourage general industry’s use of biomass fuel for CHP and heating in that order of priority).

Renewable Energy Efficient Palm Oil Mill

It is estimated that a renewable energy efficient palm oil mill of 30 tFFB/h capacity will be able to power itself meeting all of its heat and energy needs and still be able to export to grid between 1.2 and 2.5 MW electricity depending on their energy plant efficiency. In addition it will have excess residual waste biomass to produce 70 tonnes per day of marketable biomass fuel (equivalent to 8.2 million litres of fuel oil per year) for general industry use. However, this requires installation of new CHP facilities at existing palm oil mills with grid interconnection.

In such an operation the additional maximum revenue for a 30 tFFB/h mill would be:

Sales of electricity per year @ RM 0.21 per kWh:                 RM 3,780,000/-

Sales of solid bio-fuel per year @ RM 450 per tonne:           RM 9,050,000/-

Total Revenue                                                                              RM 12,830,000/-

In such an efficient operation, the averaged 394 numbers of 30 tFFB/h palm oil mills will be able to export to grid:

394 x 2.5 MW = 985 MW for 7200 hours per year

and in total produce 394 x 70 = 27,580 tonnes of biomass fuel per day equivalent to a capacity to displace 3,250 million litres equivalent of fuel oil per year in the general industry.

The palm oil mills can further exploit the renewable energy potential in the liquid effluent biomass which is equivalent to a further 72 MWh energy output per day.

This evaluates to a further 725 million litres equivalent of fuel oil per year total for the industry.

Total National Potential in Financial terms:

• Potential in electricity export from mills @ 0.21 per kWh:                RM 1.5 B
• Potential in utilisation of energy from excess of solid fuel:                 RM 8.1 B
• Potential in utilisation of energy from liquid Biomass (Biogas):         RM 1.8 B

• Total Energy Potential from the biomass from the mills:  RM 11.4 billion per year

When the general industries fulfil their heating requirements through Combined Heat and Power they will have potential for a capacity of about a further 1000 MW for 7200 hours per year valued at RM 1.5 billion.

Greenhouse Gas Abatement through Palm Oil Mill Effluent (POME)
Treatment

Palm Oil Mill Effluent (POME) is the liquid effluent discharged from the palm oil mills. This is currently treated through biological digester pond/tank treatment to reduce the pollutants to regulatory limits before it is discharged into waterways. However, large quantities of biogas containing methane are emitted into the atmosphere from the biological digester ponds/tanks.

The methane thus released to the atmosphere presents special challenge to the environmental protection authorities. Methane is considered to be 21 times lethal on greenhouse effect compared to Carbon Dioxide emission in the atmosphere. A 30 tFFB/h palm oil mill emits methane that is equivalent to about 32,400 tonnes Carbon Dioxide per year (equivalent to yearly burning of 12.0 million litres fuel oil).

Thus if the biogas from the POME digestion containing methane is captured for useful purpose, a two way benefit is derived i.e. direct GHG emission reduction to the atmosphere and renewable energy recovery.  Further, as methane is a combustible gas, renewable energy is recoverable from the biogas captured and is equivalent to 725 million litres of fuel oil. From the GHG abatement point of view the mere capture of the biogas is more than the renewable energy benefits that could be accrued from the use of the entire solid and liquid biomass residue from the palm oil mill. Thus public policy attention should be directed towards abatement of this source of GHG.

How Oil Palm Industry activities can contribute towards Carbon-Neutrality and Environmental Sustainability

If we consider the regional natural forests’ carbon sequestering capacity to be about 3.88 tC/ha/yr, then by implementing the above remedial suggestions for the Oil Palm industry in Malaysia, the annual savings in carbon emission compared to the present operation can compensate substantially for the loss in sequestering capacity of the original forest land displaced by the Oil Palm plantation. This means that the activities of the Oil Palm industry will now positively contribute toward global carbon-neutrality and thereby environmental sustainability in respect of Climate Change.

Market Potential

Palm Oil Mill Revenue

The additional revenue a 30 tFFB/h capacity palm oil mill can make through sales of surplus electricity and biomass fuel pellets is RM 17.5 million and this compares well with the current revenue of RM 10 million through processing charge for an average 30 tFFB/h mill operating at 7200 hours/year. The revenue can be enhanced by a factor of 1.75!

General Industry Energy Needs

Some industries that are potential users of biomass fuel are as follows:

• Rubber products (Gloves, tires, etc)
• Palm Oil refineries and Oleo-chemical plants
• Pulp & paper
• Textiles
• Food processing
• Chemical/Pharmaceuticals

From statistics available for the consumption of petroleum products in Malaysia we estimate that the heating requirement of these general industries is three (3) times that which can be supplied through biomass fuels by the whole oil palm Industry!

With the above scale of economics, we should strive to encourage the exploitation of the renewable energy in the oil palm biomass residue.

Some Benefits that could Accrue through Optimising the Utilisation of Renewable Energy

1. Reduce dependence of fossil fuel, and thereby improve fuel diversity and security of energy supply
2. Abate emission of Greenhouse Gases (GHGs, particularly Carbon Dioxide )
3. Enhance revenue for palm oil mills
4. Generate business for the biomass supply chain and local technology collaborators
5. Improve demand for knowledge workers
6. Encourage technology innovation, R&D in green technologies
7. Reduce local environmental impacts

Roadmap for initiating the Biomass Usage

1. Palm oil mills should be encouraged to be efficient CHP plants.
2. Palm oil mills should be encouraged to produce biomass fuels from their excess residue.
3. General industry should be encouraged to use biomass fuel for their heating needs
4. CHP technology should be encouraged in the general industry.

Public Policy, Technology Assistance, Campaign, Demonstration Plants, Training

An appropriate set of public policy and technology assistance, showcase plants would encourage the uptake of ideas propounded herein by both the oil palm industry and general industries to optimise the usage of biomass to bring about the benefits listed in the above paragraph. Where the government is vigorously pushing renewable energy developments, this initiative would provide an immediate jump start as a ready market potential already exists.

A meeting of the minds of all stakeholders (KeTTHA, DOE, MPOB, MPOA, TNB) can be a good starting point followed by public consultation to brainstorm the ideas put forth in this article.

An idea would be to start off this initiative with the larger plantation companies since they have both upstream and downstream energy activities (i.e. they are both a supplier and consumer of renewable energy).