19/11/2002 (Business Times) - CONSTRUCTION of the first three of 26biomass-based power plants in Malaysia will start soon.Malaysia Energy Centre (MEC) chief executive officer Dr Hassan Ibrahimsaid civil engineering works for three small power producers (SPPs) willbegin anytime now.

The SPPs are Bumibiopower Sdn Bhd, TSH Resources Bhd in Sabah and JanaLandfill Sdn Bhd.

“The Government has given licences to the three SPPs,” he told reportersafter signing a memorandum of understanding (MOU) with the Malaysian PalmOil Board (MPOB) on biomass-based power generation in Kuala Lumpuryesterday.

MEC is a unit of the Energy, Communications and Multimedia Ministry.

Biomass refers to renewable agricultural waste generated by oil palmplantations, padi cultivation, forestry activities, sawmilling, sugarcaneplanting, dried grass, municipal refuse and other related operations.

Based on a price of between RM4,000 and RM5,000 per kilowatt hour (kWh), abiomass-based power plant of 10-megawatt (MW) capacity would cost betweenRM40 million and RM50 million to build.

Bumibiopower’s renewable energy plant, which uses oil palm waste asbiomass fuel, will be located in Pantai Remis, Perak. The plant isexpected to be completed in two years’ time and will have a generatingcapacity of 5.2MW.

Jana Landfill’s energy plant in Puchong, Selangor, will have a generatingcapacity of 2MW and will use landfill gas as fuel. Jana Landfill is awholly-owned subsidiary of Tenaga Nasional Bhd.

Tenaga had in September last year signed a renewable energy purchaseagreement (REPA) each with Jana Landfill and Bumibiopower under the SmallRenewable Energy Programme (SREP).

Under the agreement, TNB agreed to purchase electricity from Bumibiopowerat 16.7 sen per kWh for 21 years, and from Jana Landfill at 16.5 sen perkWh for 15 years.

Janalandfill will obtain its fuel through the natural decompositionprocess of municipal waste at the landfill site.

"The 23 companies have been given the approval to build their plants butthey have yet to negotiate with TNB on the selling price of itselectricity to the national utility company," Hassan said.

He added negotiations may take a year. TNB is the only buyer ofelectricity in Peninsular Malaysia from the SPPs and independent powerproducers (IPPs).

IPPs include YTL Power International Bhd, Port Dickson Power Bhd andMalakoff Bhd.

"TNB has shown its support for the project by agreeing to buy powergenerated from biomass-based plants by SPPs at 17 sen per kilowatt-hour,"said Hassan.

TNB currently buys power from the IPPs at between 11 sen and 14 sen perkWh.

It is expected that by 2005, renewable energy will comprise about five percent of Malaysia’s energy supply or equivalent to about 700 MW. Thenational electricity supply is projected at 15,000MW by 2005.

Hassan had earlier signed a Memorandum of Understanding with the MalaysianPalm Oil Board (MPOB) on how Malaysia can fully generate power by usingbiomass by 2007.

MPOB was represented by its deputy director general (I) research anddevelopment Dr Ariffin Darus.

The event was witnessed by Energy,Communications and Multimedia DeputyMinister Datuk Tan Chai Ho and MEC board of director Datuk Dr Mohd AriffAraff.

The RM150 million project is called the Biomass-based Power Generation andco-generation in the Malaysian Palm Oil Industry and will be completed in2007.

It is jointly funded by the Government, United Nations DevelopmentProgramme and its unit, Global Environment Facility, MPOB and the privatesector.

The project’s aim is to reduce the growth rate of greenhouse gas (GHG)emissions from fossil fuel fired combustion processes and unutilisedbiomass waste through the acceleration of the growth of biomass-basedpower generation.

It also aims to reduce GHG emissions by the power sector by three to fourper cent or about 1,300 kilotonnes by 2005.

Malaysia’s palm oil sector has been identified as a source of renewableenergy in which 360 mills churn out 30 million tonnes of empty fresh fruitbunches (EFB).

These does not include the trunks and fronds, which are either thrownaway, used as fertilisers or burned to generate energy.

At present, some millers generate its own in-house power using palm oilwaste and planss are underway to connect extra power to the national powergrid.

But the task is not easy due to the high cost involved such as connectingtransmission lines to mills of which, some are in located in remote areas.Low usage or low load factor is also taken into account.

Financial institutions are also reluctant to give loans as they are notsure of the commercial returns in the long run.

The Government under the fifth Fuel Diversification Policy has identifiedbiomass as the fifth source of energy. They include solar, wind, minihydro and ocean or river wave. The other sources are crude oil, naturalgas, hydro or water-based and coal.