Renewable, local electricity generation from palm oil mill residues : a case study from Peninsular Malaysia.

Abstract

The potential for generating renewable electricity from palm oil mill residues (POMR) has received policy support from the Malaysian Government for almost two decades. However, uptake of the technology is still relatively low. A significant issue dominating the discussion for many years is how to translate the renewable electricity generation potential from POMR into actual implementation. The research seeks to understand the opportunities and barriers for the use of POMR for a Renewable Electricity System (POMR-RES) in Peninsular Malaysia by assessing the technical, techno-economic and environmental feasibility of generating renewable electricity from palm oil mill residues focusing mainly on empty fruit bunches (EFB) and biogas. A combination of mathematical analysis and simulation using Aspen PlusTM software was employed to assess the technical feasibility of the system. Techno-economic analysis was combined with Life Cycle Assessment (LCA) to integrate the environmental impact perspective into the POMR-RES evaluation. The results show that EFB has better technical and techno-economic performance than the biogas. Furthermore, the on-site POMR-RES with an installed capacity of 5.70 MW or greater is technically feasible, economically viable and environmentally favourable. The electricity generated from a POMR-RES of this scale is sufficient to meet a mill’s operational electricity demand, the parasitic load of the POMR-RES and provide surplus electricity to the national grid. An economically feasible size POMR-RES are expected to provide: 1. a 20% return on investment (ROI) with five to seven-year payback period (PP). 2. a positive net present value (NPV) with break-even point (BEP) of five to seven-year. The electricity generated in POMR-RES emits 95% less GHG emissions compared with current Malaysian electricity grid average when the emission from LUC is excluded from the electricity generation process. Thirty-five mills in Peninsular Malaysia were identified as having sufficient EFB supply to operate at or above this economically feasible size with the total accumulated generation capacity of 200 MW. This accumulated capacity would account for 25% of the 2020 target for palm oil biomass under National Renewable Energy Policy and Action Plan. This research provides a positive case for generating local, renewable electricity from EFB that can be used as evidence and practical recommendations for various actors such as prospective investors, analysts, stakeholders, mill owners and policymakers and government agencies such as the Sustainable Energy Development Authority Malaysia (SEDA) for efficient and sustainable utilization of POMR. This study also makes a positive contribution towards achieving the national renewable energy target for additional renewable power supplies and as a contribution towards improved global sustainability.