Biogas Efficiency

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Draft Final Report

P ROMOTION OF RENEWABLE ENERGY ,

ENERGY EFFICIENCY AND GREENHOUSE GAS ABATEMENT (PREGA)

Indonesia

Utilization of Biogas Generated fromthe Anaerobic Treatment of Palm OilMills Effluent (POME) as Indigenous

Energy Source for Rural EnergySupply and Electrification

A Pre-Feasibility Study Report 1

June 2004

1 Prepared by the National Technical Experts from P.T. Chazaro Gerbang Internasional.


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Table of Contents

Table of Contents .................................................................................................................. ii

List of Figures ...................................................................................................................... iv

List of Tables........................................................................................................................ iv

List of Abbreviations..............................................................................................................v

1 Executive Summary .......................................................................................................1

2 Map of the Project ..........................................................................................................3

3 Introduction....................................................................................................................4

4 Background ....................................................................................................................4

4.1 Sector Description..................................................................................................5

4.2 Constraints and issues related to the project sector................................................5

4.3 Sustainable development objectives ......................................................................5

4.4 Government policy and strategy relevant to the project sector..............................6

4.5 Overlap of the governments and ADBs policies and strategies in this sector.....6

4.6 Benefits of the project ............................................................................................7

5 General Description of the Proposed Project .................................................................8

5.1 About the Project....................................................................................................8

5.2 Project goal.............................................................................................................8

5.3 Project objective.....................................................................................................8

5.4 Poverty reduction ...................................................................................................8

5.5 Technology transfer ...............................................................................................9

5.6 Project partners.......................................................................................................9

5.7 Product or service generated by the project ...........................................................9

6 Project Implementation Plan ........................................................................................10

7 Contribution to Sustainable Development ...................................................................10

7.1 Long-term GHG and local pollutants reduction...................................................10

7.2 Other benefits .......................................................................................................10

8 Project Baseline and GHG Abatement Calculation .....................................................118.1 Current production and delivery patterns.............................................................11

8.2 Project boundary and monitoring domain............................................................13

8.3 Baseline methodology and calculation of the baseline emissions .......................13

8.4 Calculation of total project GHG emissions and net emission reduction ............14

9 GHG emission reduction monitoring and verification.................................................16


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10 Financial Analysis of the Project .............................................................................16

10.1 Estimation of Overall Cost Estimates ..................................................................16

10.2 Project Financial Analyses...................................................................................16

10.3 Financing Plan......................................................................................................17

11 Economic Analyses..................................................................................................1811.1 Project Economic Analysis ..................................................................................18

11.2 Statement of poverty reduction impact ................................................................18

12 Stakeholders comments ..........................................................................................18

12.1 Invitation letters to the Stakeholders....................................................................18

12.2 Comments on the Project by above stakeholders.................................................18

13 Key factors impacting project & baseline emissions ...............................................19

13.1 Key Factors ..........................................................................................................19

13.2 Project Uncertainties ............................................................................................20

14 Conclusion and Recommendation............................................................................20

Annex 1 Technical Analyses...................................................................................Annex 1-1

Annex 2 Financial and Economic Analyses............................................................Annex 2-1


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List of Figures

Figure 1 Map of the project location......................................................................................3

Figure 2 Flow chart of current production and delivery patterns.........................................12

Figure 3 Schematic diagram of project boundary................................................................13

Figure 4 Concept for Integrated Waste Water Treatment (palm oil mill with 2 separators)Annex 1-2

Figure 5 Configuration of pilot plant (D1 active digester, D2 in standby mode) ...Annex 1-4

Figure 6 System for flotation test ............................................................................Annex 1-7

Figure 7 Efficiency as function of COD-loading rate based on COD-dissolved....Annex 1-9

Figure 8 Comparison of sludge profiles in digester D1 and D2 ...........................Annex 1-10

Figure 9 The velocity of flotation and sedimentation ...........................................Annex 1-11

List of TablesTable 1 Parameters for estimating CH4 emission from POME ...........................................14

Table 2 Parameters for estimating GHG emission by fossil fuel consumption ...................14

Table 3 Baseline emission from the project activity ............................................................15

Table 4 Data to be collected in order to monitor emission from the project activity ..........16

Table 5 Financing Plan.........................................................................................................17

Table 6 Composition of Waste Water .....................................................................Annex 1-3

Table 7 Specific data of the support material..........................................................Annex 1-5

Table 8 Data of Digester D1 in up flow mode ........................................................Annex 1-7Table 9 Result evaluation for digester D1...............................................................Annex 1-7

Table 10 Data Digester D2 down flow mode..........................................................Annex 1-8

Table 11 Result of evaluation for digester D2 ........................................................Annex 1-8

Table 12 Analytical Data ......................................................................................Annex 1-11

Table 13 Nutrient content of POME .....................................................................Annex 1-12

Table 14 Mass Balance of Kjeldahl-N ..................................................................Annex 1-12

Table 15 Summary of Technical and Financial Parameters....................................Annex 2-1

Table 16 Weighted Average of Capital Cost ..........................................................Annex 2-2Table 17 Financial and Economic Price..................................................................Annex 2-3

Table 18 Financial Analysis ....................................................................................Annex 2-4

Table 19 Economic Analysis ..................................................................................Annex 2-5


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List of Abbreviations

ADB

ALGAS

BOD

BPPT

CDM

COD

CPO

EFB

FFB

GHG

GoIIPB

IPCC

IOPRI

MPR

PLN

POME

PTPN

UNFCCC

WACC

Asian Development Bank

Asia Least-cost Greenhouse gas Abatement Strategy

Biological Oxygen Demand

Badan Pengkajian dan Penerapan Teknologi

(Agency for Assessment and Application of Technology)

Clean Development Mechanism

Chemical Oxygen Demand

Crude Palm Oil

Empty Fruit Bunch

Fresh Fruit Bunch

Greenhouse Gasses

Government of IndonesiaInstitut Pertanian Bogor (Bogor Institute of Agriculture)

International Panel of Climate Change

Indonesian Oil Palm Research Institute

Majelis Permusyawaratan Rakyat

Perusahaan Listrik Negara

Palm Oil Mill Effluent

Perseroan Terbatas Perkebunan Nusantara

(Nusantara State Enterprise for Estate Crops)United Nations Framework Convention on Climate Change

Weighted Average of Capital Cost


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1 Executive Summary

Site Development Rationale

The problems associated with aerobic treatment of palm oil mill effluent (POME) using a pond system are long retention time (90-120 days), large area required, high demand for maintenance, loss of nutrition and high emission of methane. With the increasedworldwide concern on environmentally friendly production processes particularly thegreenhouse gas (GHG) emission of methane, it is important to develop an alternativeconcept for POME treatment.

With more efficient POME treatment plant, it is expected that large pond can be reducedsignificantly. In addition, the process will easily tap the generated methane gas (biogas)and utilize it for electricity generation.

Objective

The project goal is promoting environmentally friendly and clean palm oil production process. This goal in the long term will increase the value of Indonesias palm oil products

thus increasing product competitiveness. Having more competitive product means that inthe future, the palm oil industry can become one of Indonesias main income generatingindustries. Other than that the project will achieve the following targets:

a. Implementing better POME treatment using Anaerobic Treatment Plant

b. Introducing better use of POME treatment products.

Technical Description

The proposed concept will consist of the following components:

Sludge separation system Fixed Bed Anaerobic Digestion system (with CH 4 capturing capability: 0.56 m 3

biogas/kg COD degraded or 15,400 m3

CH4/day) Thermal drying unit Composting unit Biogas fuelled generation set with installed capacity of 1900 kW.

Solid material will be separated from the fresh POME using the so-called dissolvedfloatation separator. Dissolved floatation seems to be suitable for the separation of sludgefrom fresh POME. Almost all the suspended solids can be removed and the liquid phasecontained less Chemical Oxygen Demand [COD (30 50 mg/L)] and nitrogen (60 70mg/L). The fixed bed digester was successfully applied for the anaerobic treatment of POME. Approximately 90% of the dissolved COD can be degraded and transformed to

useable biogas. The effluent contained COD ranging between 1500 4000 mg/L, whichcan be directly used for land application. In addition, a specific electricity production of 26 kWh per ton Fresh Fruit Bunch (FFB) can be expected if all of the biogas is used by agas fuelled generating set.

Output of the Project

The project will be able to treat POME more efficiently than the former method of treatment. The system will be able to degrade 90% of dissolved COD and transform it to

biogas. Biogas production is 15,400 m 3 CH4 per day.


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The project will surely reduce COD to 30-50% of original condition. The project will also be able to reduce Nitrogen content to 60-70% of original concentration. Besides reducingenvironmental load, the project will generate organic fertiliser, compost, and also nutrientrich slurry that can generate more income.

The electricity production will reduce the current use of diesel fuel and can be supplied tothe grid. The annual power generated will be used 900 MWh own use, while the rest13,980 MWh will be supplied to the grid. The income from electricity selling will bearound US$ 699,067.

CO2 reduction due the project can reach 70,953 tonnes per year.

Benefit of the Project

There are many benefits of the project. The environmental benefit consists of: reduction of environmental load from effluent, less use of synthetic fertiliser and more organicfertiliser, less land is used for POME treatment and of course GHG gas recovery.

There are also social benefits such as more job opportunities for operators and plantationworkers. Selling electricity will indirectly increase workers welfare through increase of wages, annual bonuses, etc.

Conclusion

The project is financially and economically feasible. Technically, the project will improvethe performance of POME treatment and in general will improve the quality of theenvironment. The product value of crude palm oil (CPO) will be higher because it will beenvironmentally friendly CPO.

The project is financially feasible. At the discount factor of 12%, it provides the FIRR with- and without certified emission reduction (CER) of 29,92% and 17%, respectively.Similarly, it generates EIRR with- and without CER of respectively 29,78% and 19,32%.

Annual power generation is more or less 14,880 MWh, and the plant will useapproximately 900 MWh, and the rest will be fed to the grid. The electricity selling willgenerate revenue as much as US$ 699,067.


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2 Map of the Project

Figure 1 Map of the project location


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3 Introduction

Wastewater treatment facility is one of the most important components in the palm oil production. This facility is normally used to treat a large volume of POME generatedduring the production of CPO before the effluent is safely discharged to the surroundingenvironment through water canal or river.

The project is proposed based on the request of palm oil mill factory belonging to PTPNXIII located at Sanggau District, West Kalimantan province. The objective of the projectis to develop a more efficient POME treatment plant using an anaerobic fixed bed reactor and sludge separation. The produced methane gas will be used to generate electricity for supplying the electricity need of the factory.

The PTPN XIII Palm Oil Mill factory at Sanggau processes about 60 tons FFB per hour and produces approximately 13 tonnes (22% of FFB) of CPO per hour. With theconventional pond system it will require 7-10 Ha area to process of POME in order tosafely discharge the already treated POME to the environment.

The process technology will be adopted from the extensive research and development on

new process for POME treatment using anaerobic fixed bed reactor and sludge separation.The Indonesian Oil Palm Research Institute (IOPRI), Medan in cooperation with UTECGmbH, Germany, conducted this research 2.

4 Background

There is currently a worldwide discussion about environmentally friendly production processes (e.g. zero waste concept, integrated waste management, etc.), with the aim todefining standards for an eco label.

In view to the requirements of an eco label, there are needs for:

Minimisation of emissions, Utilization of nutrients, Utilization of renewable energy sources (such as biomass); the pond system is not

acceptable in its current existing form.

The problems associated with aerobic treatment of POME using a pond system are longretention time (90-120 days), large area requirement, high demand for maintenance, lossof nutrition and high emission of methane. Specifically, the generated POME isapproximately 3.8 m 3 for each ton of Crude Palm Oil produced. Thus the factory withlimited land availability will face a hard problem in managing POME.

With the above-mentioned worldwide concern on environmentally friendly production

processes particularly the emission of methane, it is important to develop an alternativeand efficient concept for POME treatment.

2 Presented on Palm Oil Workshop on Integrated Management and Environmentally Sound of Palm Oil MillIndustrial Waste ( Penanganan Terpadu Limbah Industri Kelapa Sawit yang Berwawasan Lingkungan ),Medan, 2000.


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4.1 Sector Description

World consumption for palm oil in 1993-1997 was around 92.03 million tonnes and thisnumber is expected to grow to 117.88 million tonnes in 2003-2007. Indonesia as thesecond largest palm oil producer can only supply around 6 million tonnes CPO whileMalaysia can supply more or less 8-9 million tonnes of CPO.

Indonesia is expected to be the largest CPO producer in the world. The developments below show this tendency:

a. There is continual land conversion to palm plantation in Indonesia while Malaysiasuffers from land limitation. Palm plantation area in 183 was around 405,600 ha,while in 1995 the number reaches 1,952,000 ha

b. The plantations are relatively young so in the next 15 years they will produce CPOat maximum

c. Production of CPO also increases. In 1983 the total production reached 983,000tonnes, in 1994 it reached 4,000,000 tonnes, and in 1999 the CPO productionreached 5.9 million tonnes.

Palm oil in the future might become one of Indonesias main source of income in theagriculture sector, thus the palm oil industry deserves greater attention.

4.2 Constraints and issues related to the project sector

In the Indonesias palm oil industry, the utilisation of biogas is new. This new technologyis not yet widely applied by plantations in Indonesia. In fact, there exists only a pilot plant.Therefore, the first constraint is lack of technology dissemination.

The condition is worsened by the fact that to install such technology, a significant amountof investment is needed. Compared to the currently applied wastewater treatmenttechnology, in short term the new technology is economically not feasible. Making the

condition worse is the environment awareness of plantations owners still low, despitestrong world demand for environment friendly products.

Although the government is supporting clean production concept for CPO production,there is no recommended technology that is environmentally friendly and in the long-term economically feasible. Being environmentally friendly and producer of biogas, thePOME anaerobic technology should be fully supported by the government.

Financing should not be a problem because palm oil industry is now in a very goodcondition in terms of world pricing and production. The state owned plantation or private

plantation should be able to finance the development of the new technology.

4.3 Sustainable development objectives

Important contributions of the project to the sustainable development concept are:environmental equity and social responsibility.

The new technology is proved to be able to reduce the land demand that was huge whenusing old anaerobic pond technology. This fact means that available land could be used to

plant more palm tress. Less retention time of the new technology also gives impact to the production of CPO. Production of CPO can be speeded up so that the plantation can produce more CPO.


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Production of more CPO means more people are employed. This condition opens new jobmarket for the people in the surrounding area of the plantation. More jobs to the peoplewill improve the welfare of the community and also in the long term, the regionaleconomy. More jobs also mean that less people are in poverty or in other words more jobswill reduce poverty.

The technology is proved to perform better than older POME treatment technology. Thismeans less pollutant loads are released to the environment. Less pollutant load will makethe environment able to regenerate naturally and less environmental damage will occur.Better environment quality is for sure important for the future generation.

4.4 Government policy and strategy relevant to the project sector

The government of Indonesia (GoI) is supporting the development of palm oil industry.GoI realises that palm oil industry is an important source of national income, so GoIfacilitates improvement in the sector. Environmental protection is one of the importantissues that GoI would like to address.

The world demands for CPO with inherent good environment quality. This means the

production process of CPO should be in line with environmental guidelines or no pollutionto the environment. GoI has implemented several strategies such as carrying capacity

policy and end of pipe policy. However, these two policies have not been performing verywell.

GoI finally realised that the approach should be more or less holistic. Holistic approachwill request every step of production to consider environment aspect. This holisticapproach is called clean production approach or zero emission approach.

In clean production approach, the producers should consider environmental aspect inevery step of the production line. The target is reducing pollution in every step andimproving efficiency. This approach should be used in combination with other policies i.e.carrying capacity and end of pipe policies. The combination of approaches will result inmaximal environmental performance.Cleaner production has some advantages such as:

a. There is economic benefit in the clean production practice because of efficiency

b. Prevent environmental damage and slowing down the degradation of environmentquality

c. Maintain and strengthen long-term economic development and competitiveness

d. Supporting the principle of environmental equity

e. Maintain the natural ecosystem and

f. Improving products competitiveness internationally.

4.5 Overlap of the governments and ADBs policies and strategies in this sector

At the Earth Summit held in Rio de Janeiro in 1992, 155 countries signed the United Nations Framework Convention on Climate Change (UNFCCC), which entered into effectin 1994. The goal of the UNFCCC is to stabilize concentrations of carbon dioxide andother greenhouse gases, and it calls on developed countries (including Russia and the


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countries of Eastern Europe), known as the Annex I Parties, to lead the way in taking stepsto cut down GHG emissions so that emissions in 2000 are at the same level as in 1990.

Indonesia signed the UNFCCC on June 5, 1992. On August 1, 1994, the Presidentapproved the UNFCCC Ratification Law (Law No. 6/1994), and on August 23, 1994, theinstrument of ratification was submitted to the UN Secretary General and Indonesia

became a signatory country.

Indonesia signed the Kyoto Protocol in July 1998. Subsequently, the EnvironmentMinister established a National Committee on Climate Change and Environment to tacklethe problem of global warming. The translation of the Kyoto Protocol has now beencompleted, and a translation certificate obtained from the UNFCCC. In the future, the LHis to prepare a bill for ratification of the Protocol that will be submitted to the President viathe Ministry of Foreign Affairs. It is expected that the Majelis Permusyawaratan Rakyat(MPR) ratify the Protocol after approval by the President.

Indonesia has drawn up a master plan for promoting the Clean Development Mechanism(CDM) with support from Germany and the Netherlands, and although the members of theabove National Committee on Climate Change and Environment have been chosen, thechairman has yet to be appointed. CDM approval procedures and an approval agency arealso lacking, and urgent action is required to establish the necessary agencies andstructures for the practical implementation and operation of CDM projects.

4.6 Benefits of the project

The project will benefit the environment very well. The application of improved POMEtreatment plant will reduce pollutants concentration significantly. The treated water effluent can be safely released to the water body.

Other benefits such as the production of compost and also organic fertilizer can improvethe economy of the people and the plantation owner. The use of organic fertilizer for agriculture will improve the total environment quality not only for the area in the vicinityof plantation but also other areas that are using fertilizer from the plantation.The use of organic fertilizer will also reduce the dependency to synthetic fertilizer thusreducing the dependency on fossil-based resources. In the long-term, this effort willimprove sustainable development in the area. The plantation will also be self- sustaining

by producing own organic fertilizer. Self-sustaining fertilizer demand will improveeconomic condition of the plantation in general.

The community nearby can work in the plantation. As one of the impacts is more production, more people can work, thus reducing unemployment rate and alleviating poverty.

From the selling of electricity, the plantation will improve the cash flow. One ton of FFB

equals to 26 kWh of electricity from biogas per hour, the plantation can produce 60 tonnesof FFB. That means that per hour, the plantation is potentially able to produce 1560 kWh per hour. This is a significant number because for each kWh PLN can pay more or lessIDR 500. Producing own electricity will also benefit the plantation. There will be nodependency on PLN or diesel generator. In general, the use of electricity from biogas willreduce the emission of air pollutants especially GHG.


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5 General Description of the Proposed Project

5.1 About the Project

Project Title

Utilisation of Biogas Generated from the Anaerobic Treatment of Palm Oil Mills Effluent(POME) as Indigenous Energy Source for Rural Energy Supply and Electrification

Location

Owner : PTPN XIII (PT. Perkebunan Nusantara XIII)

District : Sanggau

Province : West Kalimantan

Country : Indonesia

5.2 Project goal

As mentioned earlier, the palm oil industry will grow bigger in the future and as themarket needs environmentally friendly products, the palm oil industry should also produceenvironmentally friendly products. Therefore the project goal is promoting clean andenvironmentally friendly palm oil production process.

This goal in the long term will increase the value of Indonesias palm oil products thusincreasing the competitiveness of the product. Having more competitive product meansthat in the future, the palm oil industry can become one of Indonesias main source of income.

Promoting clean production also supports the principles of environmental equity.Sustainable development principle says that the development should satisfy current needwithout jeopardising future needs. Therefore environmental equity is one of the importantcomponents.

5.3 Project objectives

Environmentally friendly palm oil production process consists of many components. Clean production means that from the origin or raw material until the waste production,environment considerations should be involved. One important component is wastetreatment because production efficiency can only reach around 20%-25% (In the case of PTPN XIII is 22% of FFB is converted to CPO), so the objectives of the project:

a. Implementing better POME treatment using Anaerobic Treatment Plant

b. Introducing better use of POME treatment products.

5.4 Poverty reduction

The anaerobic treatment plant will need less land area, thus more land can be converted to palm plantation. Increasing the plant area means increasing the number of palm trees,increasing the need to maintain those palm trees, increasing production rate and finallyincreasing the need of manpower.


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The indirect positive impact of anaerobic treatment plant is the opening of new job market.More people can be employed by the plantation management, thus reducingunemployment rate and in the long term, alleviating poverty in the area.

5.5 Technology transfer

The technology to be transferred through this project is the POME anaerobic treatment plant technology. As mentioned earlier, IOPRI will cooperate with UTEC GmbH,Germany.

5.6 Project partners

Current project partners are:

a. IOPRI (Indonesian Oil Palm Research Institute)

b. UTEC (Umwelt Technologie) GmbH, Germany

c. PTPN XIII, Sangau.

IOPRI and UTEC GmbH will be the technology agents. UTEC GmbH, which has thetechnology, will transfer it to the experts in IOPRI. In the future, IOPRI experts shoulddisseminate the technology to all palm plantations in Indonesia.

PTPN XIII is the owner of the plantation. The bigger project will be installed at PTPNXIIIs facility. PTPN XIII will also be the disseminating agent because every one in the

palm oil business should know the success story of this advanced POME treatmentutilisation.

5.7 Product or service generated by the project

From the process flow chart on Figure 4 in the Annex, there are 5 products to begenerated, namely: biogas, treated water, treated slurry, fertilizer, and compost. Treatedwater will be released to the nearest water body. Treated slurry and fertilizer can be used

by the plantation or, especially for the fertilizer, can be sold outside to farmers or other plantations. Compost can be used by the plantation it self. Another important product iselectricity from biogas.

For products that are dependent on ambient temperature such as fertilizer or compost, the production rate will depend on the weather. When it is wet season, the production of compost or fertilizer might be lower than in the dry season. The fertilizer and compost aregood organic materials for the soil and good for plants.

As the production rate is considered to be constant at 60 tonnes FFB per hour, then the production of biogas should also be constant. This is assuming that the treatment plantworks at the same efficiency all the time. With such big production it is calculated that inan hour the biogas plant could produce electricity equal to 1,560 kWh.

Higher or lower temperature might affect the performance of the anaerobic bed. For the biogas production, lower temperature means less production of biogas and vice versa for higher temperature. As the plantation location is in the tropical area then the temperaturedifference is not so much to affect the production rate of biogas.


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6 Project Implementation Plan

The following project activities and milestones are foreseen:

Survey, investigation, preparation of FS report Mid 2004

Finalization of Technical Design and Engineering End 2004 Construction of plant End 2005 Starting commercial operation 2006

7 Contribution to Sustainable Development

7.1 Long-term GHG and local pollutants reduction

Methane (CH 4) has higher warming potential than CO 2 so recovering the CH 4 willsignificantly give positive impact to the environment. The CH 4 generated will be used togenerate power. The current generation system in the area is using Diesel Generators then

the emission factor is 1 kg CO 2/kWh electricity produced. Interconnecting the new systemto the grid means reducing possible CO 2 emission from the operation of diesel generators.

The system will reduce GHG emissions of about 70,953 tonnes of CO 2 equivalent. Thenumber will reach 1,135,248 tonnes of CO 2 equivalent in 2022, after 15 years of operation(lifetime of the system).

7.2 Other benefits

Less land will be used for POME treatment and treated effluent can be released to thewater body. Carrying capacity of the environment especially the water body will berecovered because less pollutant is released.

Other benefits such as the production of compost and organic fertilizer also can improvethe economy of the people and or the plantation owner. The use of organic fertilizer for agriculture will improve the total environment quality not only for the area in the vicinityof plantation but also other areas that are using fertilizer from the plantation.

The use of organic fertilizer will also reduce the dependency to synthetic fertilizer thusreducing the dependency on fossil-based resources. In the long-term, this effort willimprove sustainable development in the area. The plantation will also be self-sustaining by

producing its own organic fertilizer. Self-sustaining fertilizer demand will improveeconomic condition of the plantation in general.

The community near the plantation can work for the plantation. Thus unemployment will be reduced and poverty will be significantly alleviated.

From electricity selling, the plantation will improve the cash flow. One ton of FFB equalsto 26 kWh electricity from biogas and per hour the plantation can produce 60 tonnes of FFB. That means per hour the plantation is potentially able to produce 1,560 kWh per hour. This is a significant number because for each kWh PLN can pay more or less IDR 500. Producing own electricity will also benefit the plantation. There will be nodependency on PLN or diesel generator. In general the use of electricity from biogas willreduce the emission of air pollutants especially GHG.


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8 Project Baseline and GHG Abatement Calculation

8.1 Current production and delivery patterns

Considering the chemical contents and physical properties of POME, the most efficient

system used in the initial stage of the wastewater plant is the anaerobic treatment. Thecurrent system meets the requirement of the palm oil mill operator to safely discharge thetreated POME.

However, the system releases methane gas (CH 4) into the atmosphere as the by-product of anaerobic digestion of POME. The treatment of POME happens actually by ananaerobic/aerobic pond system.

In the first view the pond system has some advantages as:

a. Simple system

b. Low investment costs for technical equipment,

c. Low energy demand.

But, a more detailed investigation shows that there are several negative aspects identifiedas follows:

a. High demand for area ( 7-10 ha for an oil mill with 60 t FFB/h). The area neededto treat POME using traditional method is quite large. On average between 7-10hectares of land is needed to treat POME with production capacity of 60 tonsFFB/h

b. High demand for de-sludging of the pond and handling of the sludge

c. In oil mills, which use two-phase-separators all the fruit sludge goes to the ponds.The suspended solids, which are not degraded, settle down and are enriched. The

ponds silt up without periodical sludge removal. The consequence is that the activevolume of the ponds and the hydraulic retention time of the wastewater in the

ponds decrease and the purification capacity are reduced. Furthermore it is rather difficult to take out the sludge sediment all over the area because of the extendedarea and depth of the ponds

d. Lost of nutrients. All nutrients needed for the plantation (N, P, K, Mg, and Ca) inthe effluent are discharged to the river and pollute the environment

e. High emissions of methane. Nearly all-organic matters are anaerobic degraded andtransformed to methane and carbon dioxide. Because high volume of FFB is

processed then the emission of Methane is also high. At minimum 10 m 3 methaneare emitted per ton FFB


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Figure 2 Flow chart of current production and delivery patterns

The electricity generation in Sanggau is under the administration of PLN branchSingkawang. Diesel generators supply the grid with capacities around 140 kW to 600 kW.


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8.2 Project boundary and monitoring domain

The following is the schematic diagram of project boundary.

CPOPLANT

DIGESTERBIOGASPLANT

DIESELGENERATOR

SET

SHELL

FIBRE

EMPTY FRUITBUNCH

CPO

FRESHFRUIT

BUNCH TREATED EFLUENT

FUEL CH4

POME

ELECTRICITY

Figure 3 Schematic diagram of project boundary

The project boundary consists of the diesel generator set and the biogas digester. Other component of CPO production is not part of the project boundary. The shaded boxes arethe important components for calculating GHG emission reduction.

8.3 Baseline methodology and calculation of the baseline emissions

The baseline scenario is defined as the most likely future scenario in the absence of the proposed project activity. The baseline scenario is the continued uncontrolled release of GHG to the atmosphere, similarly to most palm oil mills in Indonesia and the use of dieselgenerator.

Methane Release

This project activity assumes the 100% CH 4 emission and will not include the recovery of CO2 emission from the biogas in accordance with the IPCC guideline.

Formulae used to estimate the CH 4 emission is as follows:CH 4 emission (tons CO 2 eq./year ) =

)()/()/(

)/()/()(

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333

CH GWP mt densityCH mmbiogasin fractionCH

mm yield Biogast m productionCPOthein yield POME t productionCPO

CPO production =

)/()/( yt received FFBt t yield CPO


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Table 1 Parameters for estimating CH4 emission from POME

Parameters Value Unit

FFB received 432,000 t/year

CPO yield 0.22 tonsCPO /tonsFFB

POME yield in the CPO production 3.86 m3

-POME/tonsCPOBiogas yield from POME 16.8 m 3-Biogas/m 3-POME

CH4 fraction in biogas 0.62 m 3- CH 4 /m3-Biogas

CH4 density 0.00071 tonsCH 4 / m3-CH 4

GWP CH 4 21 -

Using the values above CH 4 emission is 56,973 tons CO 2 eq/year .

GHG Emission due to Fossil Fuel Consumption

Formula for estimating GHG emission by fossil fuel consumption is follow.

CO2 Emission (tonsCO 2 eq./year) =

1000/)/()( 2 kWhCOkg diesel of factor emissionkWhoperateto Demand Electrical eq

Parameters for estimating GHG emission by fossil fuel consumption are shown in Table 2.

Table 2 Parameters for estimating GHG emission by fossil fuel consumption


Own electricity demand 900 MWh/year

Emission factor 3 of CO 2 1 Kg CO2/kWh

The factory needs 900 MWh per year that is supplied by local grid. The grid is suppliedusing diesel generators, so the baseline emission will be 900 tons CO 2 per year (1 kgCO2/kWh).

The project will generate electricity and be able to supply its own electrical demand. Thismeans the project will not emit any GHG.

8.4 Calculation of total project GHG emissions and net emissionreduction

As the project will use own produced electricity, there is no emission from the project(fossil fuel usage). The emission due to methane released is also minimised to 0. Theemission reduction is achieved by recovering CH 4 and also fossil fuel avoidance (from

power generation). The formula emission avoidance of fossil fuel usage is as follows.

Factor EmissionUseOwnGeneration y Electricit Gross year COkg Avoidance Emission = )()/( 2Gross annual production is:


3 Source: UNFCCC Indicative Simplified Baseline for Small Scale Project


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15

CH4 recovered 2,713 Tons CH 4 r/year

Heat value of CH 4 55,400 MJ/tonsCH 4

Conversion of coefficient from heat toelectricity

0.33 kWh/MJ

Power generation efficiency 0.3 kWh/kWh (%)

Electricity supply 13,980 MWh/year

Annual power production by the project is 13,980 MWh; using 1 ton CO 2/MWh emissionfactor then the emission reduction will be 13,980 tons CO 2/year. Reducing own use of 900MWh/year then the fossil fuel avoidance will be 13,080 tons CO 2/year. The CH 4 recoveryis 56,973 tons CO 2/year. Using the formula below the net emission reduction can becalculated.

emissionGHG project Avoidance Fuel Fossil eryCH duction Emission += )covRe(Re 4

where:

CH4 recovery : 56,973 tons CO 2/year

Fuel Avoidance : 13,080 tons CO 2/year

Project GHG emission: 0 tons CO 2/year

Using the numbers above the Net Emission Reduction can reach 70,053

Table 3 Baseline emission from the project activity

Items Unit/Year 2007 2008-2012 2013-2021 2007-2022Emission reduction

by CH4 recovery

tonsCO 2 eq/y

56.973 284.865 512.757 911.568Emission reduction

by fossil fuelconversion

tonsCO 2 eq/y

13.080 65.400 117.720 209.280Total EmissionReduction

tonsCO 2 eq/y

70.053 350.265 630.477 1.120.848


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9 GHG emission reduction monitoring and verification

For the evaluation of the effect from this project activity in PTPN XIII palm oil plant inWest Kalimantan, the following monitoring plan shall be performed.

The following data will be collected.

Table 4 Data to be collected in order to monitor emission from the project activity

No Data variable Data Unit Measured (m),calculated (c) orestimated (e)

Recordingfrequency

Proportion of data to bemonitored

For how long isarchived datato be kept

Comment

1 FFB receptionfrom plantation

t/year m Every FFBreception bytruck

100% 15 years (project period)

Data will beaggregatedmonthly andyearly

2 FFB receptionfrom other

producers

t/year m Every FFBreception bytruck

100% 15 years (project period)

Data will beaggregatedmonthly and

yearly3 POME yield

from CPO produced

m3-POME/tonsFFB

m Once a day 100% 15 years (project period)


4 Biogas yieldfrom POME

m3Biogas/m3POME



5 CH4 fraction in biogas

m3- CH4/ m3POME



6 Gross electricity produce

MWh m Once a day 100% 15 years (project period)

10 Financial Analysis of the Project

10.1 Estimation of Overall Cost Estimates

Financial analysis is prepared to provide a better picture of the profitability of the project.

Based on the technical and financial parameters as summarized in Table 15 of the Annex,

it can be seen that the total cost consist of investment, operational and maintenance cost isUSD 3,122,060. From electricity sales, the project can generate annual income of US$699.067 and CER annual revenue of US$ 354,765.

10.2 Project Financial Analyses

The financial analysis in Table 18 of the Annex shows that the FIRR at 12% discountfactor is 29,92% with CER revenue and 17% without CER revenue. Similarly at 12%


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17

discount factor provides the FNPV of IDR 24,381 million with CER Revenue and IDR 6,043 million without CER revenue.

Meanwhile if it uses the discount factor similar to WACC of 4.77% (see Table 16 andfinancial plan Table 5), the FNPV with CER revenue will be IDR 53,608 million, andFNPV without CER revenue will be IDR 23,252 million.

The above analysis shows that the project is financially feasible.

10.3 Financing Plan

Table 5 Financing PlanLocal Foreign Total %(USD) (USD) (USD)

FUND REQUIREDProposed Project

Capital Expenditure 1,364,050 1,631,668 2,995,718 95.95%Operating Expenditure 106,273 20,069 126,342 4.05%Financial charges during development - - - 0.00%

TOTAL PROJECT REQUIREMENT 1,470,323 1,651,737 3,122,060 100.00%

SOURCES OF FUNDSProposed ADB loan - 2,341,545 2,341,545 75.00%Other loan 312,206 - 312,206 10.00%Equity or capital contributions

Government 156,103 - 156,103 5.00%Other sources 312,206 - 312,206 10.00%

Subsidies for operation - - - 0.00%Internal cash generation - - - 0.00%

TOTAL SOURCES 780,515 2,341,545 3,122,060 100.00%


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11 Economic Analyses

11.1 Project Economic Analysis

The detailed economic calculation is summarized in Table 19 presented in the Annex of

the report.The EIRR based on 12% discount factor is found to be 29.78% and 19.32% for respectively with- and without CER revenue. Similarly, with CER revenue it gives ENPVof IDR 22,469 million, and without CER revenue it gives ENPV of IDR 8,734 million.

Meanwhile if use the discount factor equals to WACC of 4.77% (see Table 16 andfinancial plan Table 5), the ENPV with CER revenue will be IDR 71.978 million andENPV without CER revenue will be IDR 35,506 million.

The above shows that the project is economically feasible.

11.2 Statement of poverty reduction impact

The project will be using the skilled and unskilled labour. The unskilled labour majoritycomes from the poor village community. Realization of this project will promote thedevelopment of alternative energy for electricity in Indonesia that electricity is highly

beneficial for improving public welfare, enhancing the intellectual life of the nation,making the development of other economic sectors, and advancing the economy. It isexpected that national standards will be improved due to the creation of social capital,assurance of wage income and improvement in living conditions.

12 Stakeholders comments

12.1 Invitation letters to the Stakeholders

The project was introduced and outlined including the risks and benefits to officials/staff of related institutions and/or organizations that have been contacted personally, by fax andletters. They have been asked for their comments or no objection regarding the technical,environmental and social issues.

The stakeholders identified for the project are as follows.

Directorate General for Electricity and Energy Utilization (DGEEU) Bogor Institute of Agriculture (IPB) Indonesian Oil Palm Research Institute (IOPRI) Agency for Assessment and Application of Technology (BPPT) District Office of Environment

12.2 Comments on the Project by above stakeholders

As of date, all organizations have shown their interest to support the project concept andmost of them emphasized the socio-economic and environmental importance of the

project.


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The District Office of Environment is basically supporting the project concept, as it willimprove the environment condition particularly improving water quality of the river around the palm oil mills.

IOPRI one of the active institute active in palm oil research anticipates that the presentedstudy will be very promising to be disseminated to Palm Oil Mills in Indonesia. IPB alsoconfirmed that this anaerobic POME treatment concept is also considered as an innovativetechnique that may have a prospective future.

BPPT together with PTPN III (owner of the palm oil plantation and mill located atSangau, West Kalimantan) are expecting that full-scale plant can be introduced andinstalled at PTPN XIIIs facility. PTPN XIII will also be ready also disseminating thesuccess story of this advanced POME treatment utilisation.

13 Key factors impacting project & baseline emissions

13.1 Key Factors

Legal

The interest for the development of the anaerobic POME treatment plant is based onthe fact that this technology also produces burnable biogas as by product.Technically this biogas can also be used to generate combined heat and power (CHP) system. Having Ministerial Decree no. 1122 K/30/MEM/2002 of PSK Tersebar that encourage of private to generate electricity using renewable energysources and sell electricity to PLN grid will have an economic impact for the palmoil mill to develop the anaerobic POME treatment plant.

However, there are still some improvements of the decree that are required. Themost important item is the duration of electricity purchase contract is not specifiedin the decree. This makes PLN only agree to sign the electricity purchase agreement(contract) on yearly basis. It may become a financial problem if later the contractcannot be extended due to any reasons.

Political

The above-described Ministerial Decree on PSK Tersebar is applicable since itsissuance on 12 June 2002. However, many of PLN officials are not fully understandabout the background, aim, and benefit behind that PSK Tersebar decree.Additionally, they are also not fully aware about the simplified procedures for theimplementation of PSK Tersebar.

Economic

The base production cost (HPP) of electricity of PLN in Java is approximately 7 UScents/kWh. According to the PSK Tersebar decree, the electricity will be paid byPLN at 5.6 US cents/kWh (at medium voltage). The HPP of 7 US cents/kWh maynot become lower outside Java island as most of as most of current generating plantof PLN in outside Java is still rely on diesel oil.

Baseline GHG emissions

The government of Indonesia is introducing the so-called Green Energy Programto promote the use of renewable energy sources and energy efficient technologies.Aim of this program is to reduce the use of fossil fuel particularly for electricitygeneration in order to retard energy resources depletion. This program may


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influence the GHG emission baseline. As far as Outside Java is concerned, however,the GHG emission rate of 1 kg CO 2/kWh will more or less remain un-changed.

13.2 Project Uncertainties

The most critical aspect would be the political stability of the country and the

consistency of the related government policies (e.g. PSK Tersebar and GreenEnergy policies).

The environment damage (because of e.g. poverty and deforestation) that maylead to nature disaster such as flooding and climate change that lead to extremedrought that are beyond human control.

14 Conclusion and Recommendation

The study confirms that the anaerobic treatment plant for POME is technically, financiallyand economically viable. Furthermore, the discussions with the involved stakeholders andother related institution revealed a high interest towards the proposed development.

Technically the project will improve the performance of POME treatment and in generalwill improve the quality of environment. The product value of CPO will be appreciated

because considering the environmentally friendly process produces it.

The project is financially feasible. At the discount factor of 12%, it provides the FIRR with- and without CER of 29,92% and 17%, respectively. Similarly, it generates EIRR with- and without CER of respectively 29,78% and 19,32%.

Annual power generation is more or less 14,880 MWh, and the plant will useapproximately 900 MWh and the rest will be fed to the grid. The electricity selling willgenerate revenue as much as US$ 699,067.

The sludge generated from the process can be directly distributed to the palm estate as

fertilizer or to be dried that later can be used as fertilizer. The sale of this natural fertilizer is not considered.

However, before further steps in implementation are undertaken a more detailed case or feasibility study should be prepared to further verify the overall frame conditions of the

project. A comprehensive survey of the site must be carried out.

The detailed design of the scheme should provide an even more accurate cost estimationand financial and economic analysis.


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Annex 1-1

Annex 1 Technical Analyses

Current Practice and Proposed Concept

Considering the chemical contents and physical properties of POME, the most efficientsystem used in the initial stage of the wastewater plant is the anaerobic treatment. The

current system meets the requirement of the palm oil mill operator to safely discharge thetreated POME.

However, the system releases methane gas (CH 4) into the atmosphere as the by-product of anaerobic digestion of POME. The treatment of POME happens actually by ananaerobic/aerobic pond system.

In the first view the pond system has some advantages as:

a. Simple system

b. Low investment costs for technical equipment,

c. Low energy demand.

But, a more detailed investigation shows that there are several negative aspects identifiedas the followings:

a. High demand for area ( 7-10 ha for an oil mill with 60 t FFB/h). The area neededto treat POME using traditional method is quite large. On average between 7-10hectares of land is needed to treat POME with production capacity of 60 tonsFFB/h

b. High demand for de-sludging of the pond and handling of the sludge

c. In oil mills, which use two-phase-separators all the fruit sludge goes to the ponds.The suspended solids, which are not degraded, settle down and are enriched. The

ponds silt up without a periodical sludge removal. The consequence is, that theactive volume of the ponds and the hydraulic retention time of the wastewater inthe ponds decrease and the purification capacity are reduced. Furthermore it israther difficult to take out the sludge sediment all over the area because of theextended area and depth of the ponds.

d. Lost of nutrients. All nutrients (N, P, K, Mg, and Ca) in the effluent are dischargedto the river, pollute the environment and are for the plantation.

e. High emissions of methane. Nearly all-organic matters are anaerobic degraded andtransformed to methane and carbon dioxide. Because high volume of FFB is

processed then the emission of Methane is also high. At minimum 10-m3 methaneare emitted per ton FFB.

Proposed Concept

The concept has been proposed by IOPRI and UTEC with a process scheme as presentedin Figure 4. The process is briefly explained as follows.


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Annex 1-2

Source: Anaerobic Treatment of POME, IOPRI, 2000.

Figure 4 Concept for Integrated Waste Water Treatment (palm oil mill with 2separators)

At the first step, the suspended solids are separated using flotation plant, decanter, in order to:

a. Reduce the Chemical Oxygen Demand (COD), Biological Oxygen Demand(BOD), nitrogen and sand content

b. Minimise the problems in the subsequent treatment steps as foaming, plugging,sedimentation.

The waste water, which is polluted mainly with dissolved component, is fed to ananaerobic digester (fixed bed, UASB or other), where

a. The pollutant is mainly degraded and transformed to useful biogas,

b. The process occurs with a high performance and in a short time,

c. The produced biogas is collected.

The anaerobic pre-treated effluent can be used for land application to

a. Utilize the nutrient,

b. Save area,

c. Minimise emissions and energy consumption

Where a land application is not possible, the water can be treated aerobically (aerated ponds, activated sludge system) to fulfil the standards for discharging into a river. Thesludge phase can be digested anaerobic in a totally mixed digester for production of

biogas, if the aspect of energy is important. The digested sludge can be used for landapplication together with the wastewater to utilize the nutrients. The fresh and thickenedsludge can also be dried (rotary drier, other) to produce feedstuff or a storable fertiliser.

Furthermore the fresh sludge can be dried biologically by using the composting process.The sludge is mixed with chopped the empty fruit bunch (EFB) and the mixture is rotting


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Annex 1-3

in heaps and will be transformed to a compost, which is enriched with nutrients. Themixture must be turned from time to time to evaporate a maximum of water.

The favoured variations are marked in Figure 4. In the case that an oil mill has a 3-phasedecanter the sludge separation is not necessary, but the alternatives for wastewater andsludge treatment are identical.

The main components in the given concept for POME-treatment are:a. Anaerobic pre-treatment

b. Sludge separation.

Both steps were investigated by IOPRI through the experimental plant consists of anaerobic treatment plant and sludge separation as discussed in following sections.

Pilot Plant for Anaerobic Treatment

Anaerobic treatment of POME is performed using a pilot plant equipped with fixed beddigesters. The fixed bed technology was chosen, because this type of digester has lowenergy consumption, less risk in operation and an easy start up. Furthermore a high

performance could be expected. The following aspects are from interest:

a. performance (max. loading rate, efficiency, min. hydraulic retention time)

b. risk of plugging

c. Specific biogas production, composition of the biogas.

The pilot plant was located at Pagar Marbau Palm Oil Mill of PTPN II, Medan. The maincomponents of the plant are the fixed bed digester D1 and D2. Digester D1 was used for operation in up flow mode, digester D2 for down flow mode. Figure 5 presents theschematic configuration of the plant.

The wastewater consists of the effluent from the separators, the condensate and cleaningwater. The composition of the wastewater is given in Table 6. For comparison data from

IOPRI (28.02.97) are added.The composition of the used POME varied in a wide range according to the operationconditions of the oil mill.

Table 6 Composition of Waste Water

Parameter Unit Used POME Data of IOPRI

PH - 4.0 4.5 4.0 4.6

Tot. Solids Mg/l 10,000 30,000 30,000 70,000

Tot. Dissolved Solids Mg/l 8,000 19,000 15,000 30,000

Tot. Suspended Solids Mg/l 1,000 5,000 15,000 40,000

Total COD Mg/l 12,000 25,000 40,000 120,000Dissolved COD Mg/l 8,000 16,000 -

Total Kjehld.-Nitrogen Mg/l 90 16,000 500 800

Total Phosphate Mg/l 90 850 90 140

K Mg/l 110 924 1,000 2,000

Mg Mg/l 17 - 152 250 300

The technical data of the components:


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Annex 1-4

Storage tanks (S1, S2)

Volume : 335 L (each)

Digesters (D1, D2)

Total volume : 275 L (each)

Active volume : 250 LDiameter : 40 cm

Total height : 250 cm

Height of fixed bed : 200 cm

Material : stainless steel

Pumps

Type : processing cavity pumps

Flow rate : 60 L/h

Gas counter

Producer : Ritter

Type : wet gas flow meter, drum type

Source: Anaerobic Treatment of POME, IOPRI, 2000

Figure 5 Configuration of pilot plant (D1 active digester, D2 in standby mode)

The fresh wastewater is filled into the storage tanks S1 and S2, where the water cool downto ambient temperature, rests of oil float and are skimmed manually. The feeding pumpP1 sucks water from the storage tank S2 and feed it into the bottom of the digester D1. Thewater passes the fixed bed to the top (up flow), where the effluent flows out. A part of theeffluent is pumped by the circulation pump P2 back to the feeding system to dilute the


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Annex 1-5

influent, to lift the pH and to optimise the distribution of substrate inside the digester. Thesurplus of the effluent flows into the top of digester D2 to keep this digester active. Thewater passes the fixed bed in down flow mode and is discharged finally.

The operation control of the pumps and the variation of the daily amount of bed andrecycled water happen by adjustable timers. The produced biogas is collected and ismeasured by gas counters. The digestion happens at ambient temperature (26-28 o C)

The following data were measured:

Daily amount of bed waste water and circulation rate Dissolved and total COD of fresh water and effluent PH in influent and effluent Daily gas production and methane concentration.

Furthermore from time to time the amount of incorporated sludge was determined. For this purpose this liquid was taken out step-by-step, whereby the liquid level in the digester was measured in the same time. The difference between the liquid volume taken out andthe theoretical liquid volume of a certain part of the digester allows the calculation of thefixed sludge volume.

In order to enrich and fix active bacteria in the digester with the aim to increase the performance of the digester a certain support material is used. The bacteria grow on thesurface in the form of a bio film. Because they are fixed, they cannot be washed out, evenif the digester has a high hydraulic load. Both digesters are filled to 90% with supportmaterial. The fixed bed consists of random packed, corrugated, cylindrical pipe sections.

The technical data of the support material are given in Table 7.

Table 7 Specific data of the support material

Producer Fraenkische Rohrweke Gmbh

Type Ewallporit

Material PVC

Diameter 50 Mm

Height 50 Mm

Spec. Surface 180 m 2 / m3

Empty space volume 95 %

Sludge Separation

Separation of sludge was carried out using the principle of dissolved-air-flotation alsocalled pressure-flotation.

Principally using continuously working separators or decanters can do the separation of suspended solids. Both aggregates are expensive and have a high demand for maintenanceand energy.


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Annex 1-6

The flotation technology seems to be suitable alternative, from interest are:

a. Amount of floatable solids,

b. Velocity of the flotation process

c. Concentration of the floated sludge

d. Balance of nutrients in sludge and liquid phaseDuring the trials the effluent of the oil mill from Pagar Marbau (PTPN II) was used. Theunit is equipped with 2-phase-separators. The wastewater was taken from the effluent of the oil skimmer.

The wastewater flow is split, 80% flows direct into a flotation basin, 20 % is pumped intoa vessel, where air is dissolved in the water under high pressure (6 bar). The gas-enrichedwater is given back to the flotation basin passing a nozzle located at the end of the inlet

pipe. After passing the nozzle the liquid is not under pressure anymore the dissolved gascannot keep in the water, small fine bubbles are formed. The gas bubbles connect to thesludge particles with the consequence that the particles float up and form a swimmingscum, which can be separated by a scraper.

As demonstrated in Figure 6 transparent measuring cylinder (1L) and a vessel with max pressure of a 2 bar was used for the experiment. In the beginning the cylinder was filledup to 80 % with waste water, the vessel was filled half with normal tap water and air

pumped in up to a pressure of 2 bar. After testing and optimisation of the bubble forming,the gas-enriched water was given into the cylinder at the bottom area until the cylinder was filled 100%. The tests were done with hot (60 o C) and cool (28 o C) wastewater.

A sedimentation test was done with identical wastewater and cylinder for comparison.Measured parameters were:

Concentration of suspended solids in the waste water Volume of floated sludge as function of time Dry matter of the floated sludge Volume of sludge as function of time Nutrient content of wastewater, sludge and liquid phase.


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Annex 1-7

Figure 6 System for flotation test

Performance of the Anaerobic Process

The digester D1 was started up in June 1998 and ran until August 1999 without any problems. During this time the COD-loading rate was increased step-by-step from 3.0 kgO2/(m3*d) up to 7.0 kg O 2/(m3*d), the hydraulic retention time could be shortened from 6.1days to 1.7 days. The detailed data of the experiment periods are given in Table 8, resultsof the evaluation in Table 9.

Table 8 Data of Digester D1 in up flow mode

Influent EffluentFlow

Rate pH COD-diss COD-tot pH COD-diss COD-tot

Gas

Prod.

CH4

Cont.Period

I/d - mg/l Mg/l - mg/l mg/l I/d %1 41 5.0 12,750 19,120 6.8 1,235 (2,800)* 514 64

2 108 4.4 11,560 15,300 6.7 1,168 1,581 (426)** 69

3 122 4.6 12,050 14,670 6.7 1,165 1,546 (504)** 69

4 145 4.5 10,050 12,100 6.7 1,070 1,330 831 64

* influenced by inoculums sludge** gas counter partly blocked

Table 9 Result evaluation for digester D1

Loading rate kg O 2/(m3*d) Efficiency %

Period Retention time d COD-diss COD-tot COD-diss COD-tot

1 6.1 2.1 3.2 90 -

2 2.3 5.0 6.7 90 90

3 2.1 5.9 7.2 90 89

4 1.7 5.9 7.0 90 89


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Annex 1-8

From September 1999 until March 2000 the experiments were continued with the digester D2 in down flow mode. The COD-loading rate could increase from 4.0 O 2/(m3*d) up to13.2 O 2/(m3*d); the minimal hydraulic retention time was 1.3 days. The detailed data of the experience run are shown in Table 10, the results of the evaluation in Table 11.

Table 10 Data Digester D2 down flow mode

Influent EffluentFlowRate pH COD-diss COD-tot pH COD-diss COD-tot

GasProd.

CH4Cont.Period

I/d - mg/l Mg/l - mg/l mg/l I/d %

1 76 4.9 12,200 14,900 6.9 769 1,278 552 66

2 118 4.6 11,500 14,500 6.9 675 1,200 820 65

3 176 4.6 11,970 15,700 6.8 1,195 2,418 924 64

4 192 4.4 13,300 17,250 6.6 1,570 3,140 1,250 62

Table 11 Result of evaluation for digester D2Loading rate kg O 2/(m

3*d) Efficiency %Period Retention time d

COD-diss COD-tot COD-diss COD-tot

1 3.3 3.7 4.5 94 -

2 2.1 5.4 6.8 94 92

3 1.4 8.1 11.0 90 84

4 1.3 510.2 13.2 88 82

It is obvious that the efficiency based on COD dissolved is in general higher than thecomparable efficiency based on COD-total. The reason is that there is nearly nodegradation of the suspended solids, because the retention time is too short for the morecomplex degradation process. Therefore it is more suitable to use the efficiency based onCOD-dissolved. To demonstrate the performance of the digesters, the performances of upand down flow operation are demonstrated for comparison in Figure 7.


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Annex 1-9

Figure 7 Efficiency as function of COD-loading rate based on COD-dissolvedDigester D1 has a constant removal efficiency of 90 % up to a loading rate of 6 O 2/(m3*d),which decrease to 89 %, when the loading rate reach 10 O 2/(m3*d). Experiments withhigher loading rates have not been tried yet.

The digesters were driven with original wastewater including Total Suspended Solids(TSS 1,000 5,000 mg/l). The sludge particles might have the consequence that they areenriched/concentrated in the digester and plug the fixed bed. In Figure 8 the measuredsludge profiles are shown. It can be seen, that the Digester (up flow) has the max sludgecontent in the bottom area and the minimum in the top. The reason is that particles with agood sedimentation characteristic are enriched in the bottom area and that they are partlyincorporated in the top, are washed out with the effluent. After 15 month operating time

the maximum volume of sludge is calculated with 30 % at the bottom area. A risk of plugging was not determinable.

In contrary the digester D2 (down flow) has the maximum sludge content in the top andthe minimum at the bottom. The opposite effect is working, settled sludge is washed outwith the effluent, and floated sludge is enriched in the top. After 15 months operatingtime in sequence according to the configuration shown in concentrated Figure 2 themaximum volume of incorporated sludge was 35 %. It happened during an experimentrun with high loading rate and high gas production that the fed sludge floated up andformed a strong swimming scum with the consequence of foam formation and plugging of the fixed bed (see Figure 8, line 6).


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Annex 1-10

Figure 8 Comparison of sludge profiles in digester D1 and D2The most important conclusions of the experiments are:

Fixed bed technology is suitable for the anaerobic treatment of POME A dissolved-COD-loading rate of 8 10 O 2/(m3*d) and COD-removal rate of

approximately 90 % is realistic parameters for dimensioning of a full-scale plant.

The specific gas production is around 560 l gas per kg COD-degraded with amethane content of 62 %

An up flow digester seems more suitable, when the wastewater content suspendedsolids, the down flow operation can be used for water without suspended solids.

Sludge Separation

In Figure 9 the velocity of flotation and sedimentation are shown for typical wastewater taken in Pagar Marbau. This parameter is important showing that retention time is better than older system.


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Annex 1-11

Figure 9 The velocity of flotation and sedimentationTable 12 Analytical Data

Dry matter DM Suspended solids (TSS) Unit

Waste water 21,400 5,000 mg/l

Floated sludge 32,900 mg/l

3.29 %

Liquid phase 13,590 mg/l

The essential results of the trial are summarized as follows: The total content of suspended solids can be separated by flotation without any

sediment

There is no difference in the flotation characteristic for cold and hot POME as longas the gas enriched water has ambient temperature

With a vessel pressure of 2 bar 20 % of total wastewater flow is needed as gasenriched liquid. It can be expected, that the demand on gas-enriched liquid willdecrease, when a pressure of 6 Bar is used.

The floated sludge has a DM content of 3.2 % in minimum after a flotation time of 60 minutes. It can be expected, that the velocity and the DM-content can beincrease with higher pressure in the vessel.

The results of flotation tests show that the flotation technology is an interesting alternativeto other separation technologies and should be investigated in more detail.

Nitrogen balance

For investigation of the mass balance of nitrogen samples were taken in the palm oil millin Pagar Marbau and Bah Jambi. The samples were collected direct from the effluent of


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Annex 1-12

the 2-phase-separators. A certain amount was separated with a centrifuge in laboratory.Table 13 presents the analysis of the original effluent, the sludge phase and liquid phase.

It can be seen, that the separation has no effect to the NH4-N and the phosphor concentration. These components are mainly dissolved in the liquid that cannot beenriched by separation of sludge.

Table 13 Nutrient content of POMEDM COD N-Kj NH4-N P Mass balance

g/l mg/l g/l g/l mg/l %

Pagar Marbau

Effluent separator 32.1 44.830 0.64 0.10 126 100

Sludge phase 72.7 - 1.70 0.17 137 23

Liquid phase 19.0 24.300 0.32 0.13 112 77

Bah Jambi

Effluent separator 42.21 66,350 0.76 0.27 138 100

Sludge phase 55.16 - 1.01 0.25 140 24

Lquid phase 27.2 37,500 0.38 0.14 124 76

The mass balance for Kjeldahl-N has the following result:

Table 14 Mass Balance of Kjeldahl-N

Sample Pagar Marbau Sample Bah Jambi

Effluent 100 % 100 %

Sludge phase 61 % 76 %

Liquid phase 39 % 24 %

More than 60 % of N-K can be eliminated by sludge separation from the wastewater. Thesludge phase has an N-K content of 1.0 1.7 g/l, concentration depend on the DM contentof the sludge, according to the N content the protein concentration is 6.25 10.6 g/kgsludge or 113 145 g/kgDM.

The N-load to waste water treatment plants can be reduced significantly The separated sludge has a high protein content, therefore it might be suitable to

use sludge as feed stuff or as addition to a composting process to save nitrogen and

to increase the nutrient content of the compost


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Annex 1-13

System Design

The POME treatment plant proposed herein is to process the POME generated from theCPO mill with the capacity of 60 ton FFB/h. With this capacity the following data may begenerated:

CPO Mill Capacity : 60 t FFB/h

Working time : 20 h/d

Amount of FFB : 1200 t/d

Specific amount of POME : 0.85 m 3/t FFB

Amount of POME : 3.86 m 3-POME/tonsCPO

Amount of POME : 1020 m 3/d

COD-concentration : 30,000 mg/l

Spec. COD-load : 25.5 kg O 2/(m3*d)

Total COD-load : 30,600 kg/d.

Sludge separationIn view to a new concept for POME treatment it is necessary to separate the fruit sludgefrom the wastewater, because:

a. The COD will be reduced (30 50 %)

b. The nitrogen content decreases (60 70 %)

c. The following treatment system has a smaller load and the operation conditions areoptimised.

Sludge elimination in front is also interesting in oil mills using a pond system, because theefficiency of the ponds will increase and the demand for maintenance will decrease.Furthermore a continuous separation of the fresh POME in front might be more suitablethan a de-sludging of the large ponds. The required technology for sludge separation iswell known and available in the market. The flotation technology looks suitable andmight be an interesting alternative to separators and decanters.

Anaerobic treatment

An aerobic treatment pre-treatment of POME can be done successfully with fixed beddigesters. To minimise the risk of plugging and foam formation the suspended sludge

particles should be eliminated in front. Approximately 90 % of the dissolved COD can bedegraded and transformed to useable biogas. According to the COD-concentration in theinfluent the COD content in the effluent ranges between 1,500 and 4,000 mg/l with a pHof 6.5 and higher. Consequently the effluent can be used for land application.

The dimension of the digester required to process the above mill is summarized asfollows:

COD-loading rate : 9.0 kg O 2/(m3*d)

Efficiency : 90 %

Gas production : 0.56 m 3 biogas/kg COD-degraded

Methane content : 62 %


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Annex 1-14

COD-effluent : 3,000 mg O 2/l

Required volume of the digester : 3,400 m 3 (active volume)

Hydraulic retention time : 3.3 d

Chosen volume : 4,000 m 3

Methane gas production : 15,400 m3

/dDiesel-equivalent : 9,548 l/d.

Besides the aspect of wastewater treatment the energy production might be have a highimportance for a palm oil mill. A specific electricity production of 26 kWh per ton FFBcan be expected, if all biogas is used to generate electricity with a gas engine. The specificelectricity demand of the factory is estimated to 15 17 kWh per ton FFB.

The calculation demonstrated that the digester volume for the process is 4000 m 3. Thisdigester will generate Methane gas as much as 15,400 m 3/d. The use of gas allows thesubstitutions of approximately 9,548 litres/day diesel fuels. This gas can also be utilised torun the boiler or drive the generating set to produce steam or electricity respectively. Asthe boiler is normally fuelled by the palm oil fruit wastes (e.g. mesocarp fibres and shells);it is recommended to use the gas for electricity generation.

For a new palm oil mill, the option to integrate biogas to the new factory will beeconomically interesting. The combined heat and power (CHP) generating plant may beapplicable for the process using gas engine. The gas engine should also allow the use of diesel to provide operational security for the factory. When the biogas is not available theCHP plant can be driven with diesel fuel.


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Annex 2-1

Annex 2 Financial and Economic Analyses

Financial and Economic Summary

Table 15 Summary of Technical and Financial Parameters

TECHNICAL

Install capacity kW 1,878Paracitic load % 6.00%Operation hours hours p.a 7,920Power generation kWh p.a. 13,981,334

REVENUE

Power salesSales price unit (med volatge) to HPP PLN USD cent/kWh 5Annual revenue USD 699,067

CER revenueCO2 emission reduction Ton CO2 p.a 70,953.00GHG abatement price USD/ton CO2 5Revenue USD 354,765

INVESTMENT

Equipment costPer kW USD/kW 1,500 Investment cost USD 2,817,000

Civil works USD 100,000 Other cost USD 60,000

2,977,000

OPERATION & MAINTENANCE

Fixed cost

Labour costPlant supervisor (3 persons) 1.00 USD p.a. 20,393 Skilled worker (6 persons) 0.90 USD p.a. 18,353 Unskilled worker (12 persons) 0.80 USD p.a. 16,314

USD p.a. 55,060 Maintenance cost USD p.a. 50,000 Other costs USD p.a. 18,000

123,060

Variable costMaterial 70% USD p.a. 15,400 Unskilled labour 25% USD p.a. 5,500 Others 5% USD p.a. 1,100

22,000

145,060

OTHERS

Exchange rate USD 1 IDR 8,500Discount factor 12%Inflation rate 7%


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Annex 2-2

Table 16 Weighted Average of Capital Cost

A Amount ($ '000) 2,342 - 312 156 312 3,122 B Weighting 75.0% 0.0% 10.0% 5.0% 10.0% 100.0%C Nominal cost 6.7% 6.7% 17.0% 7.0% 10.0%D Tax rate 40.0% 40.0% 30.0% 0.0% 0.0%E Tax adjusted normal cost

[Cx(1-D)] 4.0% 4.0% 11.9% 10.0% 10.0%F Inflation rate 7.0% 7.0% 7.0%G Real cost [(1+E)/(1+F)-1] 4.0% 4.0% 4.6% 2.8% 2.8%H Minimum rate 4.0% 4.0% 7.0% 7.0% 7.0%I Weighted component of WACC 3.0% 0.0% 0.7% 0.4% 0.7% 4.8%

WACC real 4.8%

ADB loan Foreignloans

Domes-ticloans

Govern-ment funds

Equityparticipatio

nTotal


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Annex 2-3

Table 17 Financial and Economic Price

(USD) (IDR'mil) (IDR'mil)

Revenue

Power sales 699,067 5,942 1.000 5,942 CER revenue 354,765 3,016 0.749 2,259

1,053,832 8,958 8,201

INVESTMENT COST

Equipment 2,817,000 23,945 0.930 22,263 Civil works 100,000 850 0.930 790 Other cost 60,000 510 0.930 474

Total 2,977,000 25,305 23,528

ANNUAL O&M COST

Fixed costLabour

Skilled labour 38,746 329 0.930 306 Unskilled labour 16,314 139 0.419 58

Maintenance cost 50,000 425 0.930 395 Other costs 18,000 153 0.930 142

Sub-total 123,060 1,046 902

Variable costMaterial 15,400 131 0.930 122 Unskilled labour 5,500 47 0.419 20 Others 1,100 9 0.930 9

Sub-total 22,000 187 150

Total 145,060 1,233 1,052

TOTAL COST 3,122,060 26,538 0.926 24,579

* economic price using domectic price numeraire

Financialprice Adjusment*

Economicprice

Financialprice


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Annex 2-4

Table 18 Financial Analysis

Power CER Total O&M Total

GWh IDR 'mil IDR 'mil IDR 'mil IDR 'mil IDR 'mil IDR 'mil IDR 'mil IDR 'mil

0 2005 0 - - - 25,305 - 25,305 (25,305) (25,305) 1 2006 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709 2 2007 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709 3 2008 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709 4 2009 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709 5 2010 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709 6 2011 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709 7 2012 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709 8 2013 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709 9 2014 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709

10 2015 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709 11 2016 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709 12 2017 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709 13 2018 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709

14 2019 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709 15 2020 13,981 5,942 3,016 8,958 - 1,233 1,233 7,725 4,709 16 2021 0 - - - - - - - - 17 2022 0 - - - - - - - - 18 2023 0 - - - - - - - - 19 2024 0 - - - - - - - - 20 2025 0 - - - - - - - -

PV @ 12.00% 85,022 36,134 18,338 54,472 22,593 7,498 30,091 24,381 6,043Per unit (IDR/kWh) 425.00 215.68 640.68 265.73 88.19 353.92 286.76 71.08

With CER revenue Without CER revenue

FIRR 29.92% 17%

FNPV 4.77% 53,608 23,252FNPV 29.92% (0) (7,603)FNPV @ 12.00% 24,381 6,043

Power sales

Revenue Cost

Net Benefitswith CER

Net Benefitswithout CER

Year Invest-ment


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Table 19 Economic Analysis

Power CER Total O&M Total

GWh IDR 'mil IDR 'mil IDR 'mil IDR 'mil IDR 'mil IDR 'mil IDR 'mil IDR 'mil

0 2005 0 - - - 23,528 - 23,528 (23,528) (23,528) 1 2006 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890 2 2007 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890 3 2008 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890 4 2009 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890 5 2010 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890 6 2011 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890 7 2012 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890 8 2013 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890 9 2014 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890

10 2015 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890 11 2016 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890 12 2017 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890

13 2018 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890 14 2019 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890 15 2020 13,981 5,942 2,259 8,201 1,052 1,052 7,149 4,890 16 2021 0 - - - - - - - 17 2022 0 - - - - - - - 18 2023 0 - - - - - - - 19 2024 0 - - - - - - - 20 2025 0 - - - - - - -

PV @ 12.00% 85,022 36,134 13,735 49,869 21,007 6,395 27,402 22,467 8,733Per unit (IDR/kWh) 425.00 161.54 586.54 247.07 75.22 322.29 264.25 102.71

With CER revenue Without CER revenue

EIRR 29.78% 19.32%ENPV @ 4.77% 71,978 35,506 ENPV @ 29.78% 0 (5,728) ENPV @ 12.00% 22,469 8,734

Power sales

Revenue Cost NetBenefits

with CERNet Benefitswithout CER

Year Invest-ment

Date post:	07-Apr-2018
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