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The new Minister for Energy and Environment of Malaysia, Yeo Bee Yin, has declared that 20 per cent of the energy demand of the country should be covered by renewable energy by 2025. To reach this target, significant efforts are necessary as the country is currently generating only 2 per cent of its electricity by exploiting renewable sources. Alongside solar power, renewable energy produced out of biomass or biogas can play a major role in the future.
As a tropical country Malaysia can benefit from an abundance of biomass resources. Particularly the palm oil sector can be regarded as one of the most important contributors to the biomass resources available. Approximately 5.75 million hectares – an area almost equalling the state territory of Croatia – are used for palm tree plantations resulting in Malaysia ranking second in the global palm oil production. Apart from residues generated in the palm oil industry, plenty of biomass can be sourced from the production of sugar cane, rice, maize, kenaf and coconuts as well as municipal waste and manure from the animal breeding industry.
To benefit from these resources and make use of an estimated biogas potential of more than 500 MW in Malaysia, the government decided to accelerate the development of the biogas sector. A concrete example for its ambitions is the target to equip all palm oil mills with a biogas plant until 2020 under the EPP5 programme. By means of this measure the contamination of the environment by the disposal of sewage generated in the palm oil production shall decrease. Additionally, all owners of palm oil mills aiming to enlarge their business by adding new mills are obligated to install a biogas plant. So far only 35 per cent of palm oil mills are equipped with such a plant. Moreover, the generation of biogas can benefit the palm oil producer as it might facilitate receiving the certification for sustainably produced palm oil. For instance, in Europe the possession of this certificate has been introduced in 2009 as a requirement in order to be eligible for government subsidies for plant-based oils utilised in energy generation.
A concrete tool to foster the development of the biomass and biogas sector is the feed-in-tariff (FiT) enabling a producer of renewable energy to feed in the generated renewable energy into the network of the national grid operator TNB (or SESB in Sabah/ Borneo) for 16 years applying a fixed tariff for the remuneration of the producer.
Recent feed-in-tariffs for biogas in Malaysia (RM = Malaysian Ringgit), source: SEDA Malaysia
However, despite of this support mechanism, the development of the biogas sector is not as successful as for instance in the neighbouring country Thailand where more than seven per cent of the electricity are produced using biomass resources. One reason for this is that the new capacity which may be added each year is limited. Furthermore, there is no system of preferential feeding in of renewable power in place as for instance in Germany. At the other hand especially in remote regions the missing grid connection and the high capital costs inhibit the further expansion of biogas plants. Rather, biomass is utilised for the production of pellets, biofibers and Bio-CNG aimed at the export to markets in Eastern Asia. While foreign business delegations increasingly analyse the potential of Malaysian bioenergy, local players assess the utilisation of biogas to be more a challenge than a chance. Hence, a major part of the biomass is burned or disposed in the environment.
This ignores the fact that significant potential exists for biogas or biomass plants constructed next to the ca. 450 existing palm oil mills. As they are often located in remote areas biogas plants can ensure the decentral and non-volatile provision with green electricity while saving costs for grid expansion. Particularly the concentration of several closely located biogas facilities in energy clusters can help to provide a decentral energy supply in regions not connected to the grid. However, this does not only entail energy generation but also the decentral production of Bio-CNG by means of biogas upgrading. This allows for the local provision of trucks and buses with gas. As a result, cost can be saved as the price of diesel fuel amounting to ca. 2,32 RM per litre (0.49 EUR) is higher than the 1.90 RM (0.41 EUR) needed to cover the costs for 1 litre of Bio-CNG. Still, this green fuel is not price-competitive compared to conventional CNG being heavily subsidised (0.50 RM/ 0.11 EUR per litre) by the state reaching a price of 1.05 RM (0.22 EUR) per litre only. Nonetheless, this renewable fuel can play an important role in remote areas: Local communities and palm oil producers can save costs as the resources required for CNG fuel production are available locally and transport costs do not exist leading to a lower price compared to diesel.
The biogas required for this purposes can be generated by the two essential substrates of the palm oil production: Firstly, solid biomass in form of palm tree leaves or empty fruit bunches (approx. 80 million tons a year available in Malaysia). At the other hand, POME (Palm Oil Effluent) is another important resource. Ca. 60 million tons of this sewage incur during the production process of palm oil in Malaysia and – if not treated – pose a threat to the environment due to their high chemical oxygen demand. One cubic meter of POME can be converted into 28 cubic meters of biogas while one ton of empty fruit bunches can deliver 0.6 cubic meters of POME. Palm oil production is subject to seasonal volatility in production volume and therefore, the co-fermentation with empty fruit bunches is recommended to increase yields in times of lower POME output.
In general, the generation of biogas in Malaysia takes place by means of two methods: The first form dominating the biogas generation in Europe comprises the deployment of a fermenter tank and offers the opportunity to combine different substrates. However, this alternative requires one or several mixing devices to prevent sedimentation and ensure the equal distribution of the biomass. Apart from that, the substrate needs to be chopped before inserting it into the tank. These requirements make this type more expensive than the second alternative featuring a lagoon with a non-permeable cover that does not depend on these (pre-) treatment measures. In return, the methane yield is lower for this type due to lower efficiency. Apart from that, this alternative is rather suitable for POME.
Particularly with regard to the first type, experts point out that many even recently finalised biogas plants are out of operation due to quality problems. This is the result of the integration of low quality components in order to reduce investment costs. The latter aspect also leads to insufficient storing capacities for POME and the refusal to invest in mixing and measuring devices resulting in lower efficiency as well as higher operational costs. Consequently, the focus of the Malaysian biogas sector increasingly shifts to providers of reliable components and products such as to specialised German companies – even though their prices exceed the offers of their Asian competitors by 20-30 per cent. At the other hand, Malaysian operators of biogas facilities often lack know-how with regard to the operation of their plant. For instance, this pertains to the correct setting of the temperature, pH-values and the mixing speed, pre-treatment of substrates, etc. Experienced companies can offer their assistance at an early stage and provide staff trainings and seminars. Apart from that, after-sales services are increasingly important: By means of modern measuring technology control of important parameters such as the CO2, hydrogen sulphide or methane concentration can be organised even from abroad. This kind of services can be crucial to ensure the efficient operation particularly of decentralised plants and reduce the maintenance as well as travel and transport costs in remote locations.
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