MARKET DEVELOPMENT
12-03-2002
Tap into lucrative biomass sector, palm oil miller
12 March 2002 (Business Times) - MALAYSIA’S 360 palm oil millers shouldtap into the lucrative biomass sector which is largely wasted, and convertthe renewable energy into a potential income earner.Biomass is renewable agricultural waste such as oil palm planting waste,forestry wood waste, cuttings and grass, waste from sawmills, palm oil,wind and solar.Biomass energy is produced through the incineration of agricultural wastein a steam boiler.High-pressure steam is produced and expanded in a steam engine whichgenerates mechanical energy. This energy is then converted into electricalpower at the generator.Primary Industries Ministry secretary-general Datuk Dr Abdullah Mohd Tahirsaid currently only 5 per cent or 20 millers are keen to venture in aGovernment-initiated biomass programme.“Last year, the 360 palm oil millers in the country produced 14 milliontonnes of biomass waste, out of which 8.5 million tonnes was in the formof fresh fruit bunches and 4.3 million tonnes fibre and shell,†he toldreporters in Bangi, Selangor, yesterday.“Only a small percentage of these products was used to produce renewableenergy and a large quantity of them was either dumped in the mill compoundor thrown away,†he said.Abdullah had earlier officiated a seminar on the inaugural roadshow onSmall Renewable Energy Programme (Srep) for the palm oil sector.Also present were Malaysian Palm Oil Board (MPOB) director-general DatukDr Yusof Basiron and Malaysia Energy Centre chief executive officer DrMohd Zamzam Jaafar.The Government through the Energy, Communications and Multimedia Ministryhad launched Srep in May last year, aimed at encouraging the exploitationof renewable energy.Renewable energy has been identified as Malaysia’s fifth fuel resourceunder the Government’s Fuel Diversification Policy. The other fuelresources are fossil fuels, gas, coal, wind and solar.Srep applies to all sources of energy including biomass, biogas, municipalwastes, solar, mini-hydro and wind.“Due to the dominance and abundant availability of oil palm biomass, theindustry is the logical choice to spearhead the Srep,†said Abdullah.The Government has identified biomass from the palm oil sector as a sourceof renewable energy, targeting to generate up to 5 per cent or 700MW ofthe national grid by 2005.“For the palm oil sector to generate 700MW of the national grid, it needsat least an additional 100 millers from the current 20 interestedmillers,†said Abdullah.He added that if a mill has the capacity to produce and supply 5MW powerto the national grid for 10 hours a day, at a rate of 16 sen per unit orRM8,000 a day, a miller stands to earn about RM2.5 million a year.Abdullah said Srep also aims to encourage the palm oil sector and otherindustries, such as rice and paper millers, to achieve zero waste in theiroperations.Abdullah said some of the palm oil millers are already generatingelectricity via biomass, but most use the energy for in-house purposesonly."These millers are small, producing only 1.5MW each. What is needed now isto connect the electricity generated at the mills to the national grid fordistribution,†he said.Abdullah said for a miller to venture into biomass, an investment of lessthan RM10 million is needed to upgrade or buy locally-made generators ormodify existing plants or build new ones.Abdullah said the roadshow will take place in Kuantan, Pahang, on April30; Johor Baru, Johor, on May 28 and Kota Kinabalu, Sabah, on August19-20.Under the Srep, a successful power-generating project is required tonegotiate directly with the relevant power utilities such as TenagaNasional Bhd or Sabah Electricity Sdn Bhd.A power developer, which is capable of converting renewable energyresources into electricity of not more than 10MW, will negotiate allaspects relating to the renewable electricity power purchase agreement,including the selling price on a willing buyer, willing seller basis.The successful renewable energy producer has to register with the EnergyCommission, and will be issued a licence for a period of up to 21 years,effective from the date of commissioning of the plant.
